Yo-yo financial management
Is your financial planning like an yo-yo?
I have a tip for you👇
I see people investing for different reasons. Too often however I've noticed that their motivation is to avoid something unpleasant. Some examples: Don't want to depend on pension when I am older, I don't want to work till I am old, I don't want to become a burden for my children, I don't want to be employed, I am afraid of inflation, I don't want to end up like X etc Sometimes I do get something that sounds positive like I want to be independent and when I ask why is that important or what would that get for him/her the answer reveals that they don't want X or Y (ie. Another away from motivation).
They are all good reasons.
And they are not good motivators.
📌Like with anything else, when our motivation comes from wanting to run away from an undesired outcome we face several risks:
↪We don't feel good about doing this and it can be even stressful. It becomes something we do because we have to do. We feel obliged rather than genuinely willing to do it.
↪We often have negative internal representations associated to this, meaning that we associate it unscounsciously with bad images, bad feelings etc. Try it out: what comes to your mind when you think about your investment objectives? What do you see? What do you hear? How do you feel?just like you are not conscious of your heart beating, most likely you don't realise any of these unțil you consciously stop to think about them.
↪We risk loosing motivation once we have made enough progress on avoiding what we wanted to avoid. Gradually we start saving less or making poorer investment decisions until we backtrack on our progress enough for the "away-from" motivation to kick in again. Hence the yo-yo effect.
↪Even if you know what we want to avoid you might not be careful enough in defining what you do want. This can lead to lack of focus/strategy and no real direction. I can tell you that I don't want to go to holiday in Russia...is that of any help in properly determining what a good holiday option is for me?
↪ We are easily disturbed by cyclical turns in our investments because the undesired outcome haunts us unsconsiously.
👉Overall, it's better for your inner peace and for your finances to find ways of rewiring your mind to focus on what you want to build with your investments. It's a process that requires introspection and is doable and worthwhile.