The Cure for the Silent Killer

Each and every day, countless hours of banter about world events and personal finance fill the media. Very little (if any) coverage, however, is given to a lurking silent killer. No, not cancer, heart disease, or obesity. As Professor Ralph Keeney at Duke says, “our inability to make smart choices.”

Intentions vs. Actions

All of us attempt to make good decisions, but are usually ill equipped to battle the self-destructive behaviors that can sabotage financial independence. Good intentions often don’t translate into real action.

We worked with a client several years ago that would come in for his review meetings all enthusiastic about saving. He would often write a check for his brokerage account right then. His stated intention was to save most of his bonus each quarter. But year after year, the only quarter that he actually saved was when he was here. When we discussed this with him, he was adamant that he was saving every quarter until we provided a summary of actual savings over several years. At some level, he was deluding himself into believing he was making good progress towards his savings goals, when in reality he was not.

To a very large extent, decision-making is a battle between our short-term “impulsive self” and our long-term “patient self.” Short-term impulses can endanger long-term rational choices.

With the advent of technology that makes keeping track of account balances easy, some investors have mistaken this knowledge for action. Just seeing your brokerage account balance doesn’t make you do something for your long-term interests. In fact, some evidence has started to surface suggesting that technology distractions cause us to procrastinate.

What are Your Goals?

You see, what is missing from the instant society we live in is our personal sense of purpose and our values. We aren’t motivated to save because we don’t have truly personal goals. Instead we have warmed over platitudes that have little meaning to us. This is precisely where we can bring value…by creating a financial vision aligned with what matters most to you alongside concrete action steps.

Our inability to make smart choices is often rooted in fear (False Evidence Appearing Real.) Fear can destroy otherwise sound financial plans. Fear leads to procrastination and “second guessing” our choices. Avoiding poor decisions starts with real clarity and focus on what is most meaningful to you.

Ready to take the first step? Ready for a real conversation?

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