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
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:
- The ability to postpone gratification in all areas of life. Take what you have earned and are ready for, not what you think you must have NOW.
- 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.
- You must always blame no one other than yourself.
Further you need to be able to accurately judge if you are doing them or not! A spouse or good friend can help you to determine this.
I have been in the investment and financial planning business for over 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 best interests.
Good decisions come from experience. Experience comes from making bad decisions. Mark Twain
There is a basic premise here. We each have within us two selves. One is the person we are, and the other is the person we aspire to be. I believe that if you desire to behave in a good way, but don’t, the person you are is winning out over the higher motives to do right.
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.
Next time we will explore the first of 6 basic thinking errors we make that keep us from functioning in our own best interest.
See you soon,
Craig Verdi