D’OH!-Why Do I Do Dumb Things?

By Craig Verdi, CFP®

“For I have the desire to do what is good, but I cannot carry it out”

– Apostle Paul, Romans 7:18 NIV

Not carrying out what we want to do. Obviously not a new problem. To be a good investor we must execute. Sometimes, many times, we must do what is right, and not what we feel like doing.

There are three major qualities that I have observed that make successful investors. Successful investors don’t make three fortunes and lose three fortunes. I am talking about sustaining and growing long term wealth. Quick riches and losses are for entrepreneurs, inventors and professional entertainers and athletes. If you believe you can make it all in one shot, you still need these qualities to hang onto it. When you have money, everyone else wants it and has a lot of reasons to get you to give it to them.

There are many other minor qualities that are helpful, but if you have these three, your success is all but certain. The three qualities are this:

  1. The ability to postpone gratification in all areas of life. Take what you have earned and are ready for, not what you think you have to have NOW.
  2. A realistic world view. This is just a willingness to look at what has happened and is happening and to act on those facts. You must have an open and flexible way of thinking.
  3. You must blame no one other than yourself at all times

I don’t have all those qualities all the time. No one has them completely. But they are the qualities that I know I need to have. I aspire to have these qualities and I work toward these with the tools I have learned.

I have been in the investment and financial planning business for almost 30 years. I have been interested in investment psychology from the beginning. I have always wondered why people behave in ways that are counterproductive to their own purposes and true selves.

There is a basic premise here. We each have within us two selves at all times. One is the person we are and the other is the person we aspire to be. The things you desire to be, I believe, represent your true self. I believe that if you desire to behave a certain way but don’t, you can assume that the desire, the aspiration to do right is your true self. Why do we desire to act one way, yet continue to act in ways that are not in our best interest?

To me that became a fascinating question about myself and about my clients. It baffled the Apostle Paul 2000 years ago. It is a question I hope to answer as we go through the principles of “Mindful Money” over the next year.

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