6 Money Truths
- There are certain simple truths in money and life that are often overlooked.
- These truths aren’t ones you’ll learn in school, but instead gain through experience and life lessons.
- Consider these truths and allow them to challenge biases you may have developed over the years.
Occam’s razor is a concept that, when faced with multiple possibilities, the simplest explanation is the one most likely to be correct. Applying the principle of Occam’s razor to money matters, there are some simple truths that are good to keep in mind. Some of these truths may be found in a recent CNBC article, “The 12 most overlooked truths of money and life.”
First is the idea that presidential elections have a major effect on the markets. This is generally not true. Going back to World War II, the majority of elections did not have an effect on the markets. This is important context to keep in mind as we head into November.
Second, saying “I don’t know” is an honest and admirable answer. Admitting you don’t know something opens you up to learning more about decisions that affect your money.
Third, there’s an inverse relationship between experience and humility. As we gain more and more experience, we realize we know less than we might have thought, which leads to greater humility. We begin to understand that things are constantly changing and that there’s a lot we don’t know.
Fourth, remember the hardships you went through to gain the wealth that you have, as those hardships will likely reappear throughout your lifetime. We continue to see failures, even if they’re less devastating as we become more established. Learn from those failures and they’ll help prepare you the next time there’s a pandemic or other trying event.
Fifth, self-knowledge is overrated. Nobel Laureate Daniel Kahneman would tell you that this is indeed an issue. We tend to think we know everything we need to know, when in fact we know very little. This leads to holding biases that affect our decisions in life, including money decisions. It’s important to stay open-minded and converse with those who hold different points of view.
Sixth, passion is more powerful than profit motive. When you’re passionate, focused, and intentional about what you’re doing, you can move mountains. However, if you’re solely focused on profits, you’re driven by agendas that likely don’t have a greater purpose attached to them.
Give these truths some thought and see if any of them apply to you, especially during this turbulent year. Until next time, enjoy.
Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business Battlefield. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
Learn more about The Coyle Process, approach designed to get your arms around the big picture, so you can make informed financial decisions. Ask Gary about The Coyle Process and schedule a complimentary consultation and start living the Good Life Managed Well™.
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