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Remain Calm When Making Money Decisions

Key Takeaways

  • Dealing with money can be an emotional process.
  • We can only make good decisions when we’re in a calm state.
  • Being in a calm state allows us to be more effective and utilize slow thinking.

Count to ten. It’s something parents often say to their kids, “Calm down and count to ten.” The hope is that by the time you’ve counted to ten, you’re sang-froid – in other words, you’re calm and have regained your composure. It’s only in this state that we can be reasonable, make good progress, and make good decisions.

When we’re anxious, overly emotional, or angry, it’s very difficult to make good decisions. And when we’re dealing with money, there can be a lot of emotions involved. Throw in the ups and downs of the markets, and you may find yourself feeling overwhelmed. Those emotions may cause you to take the wrong action, or no action at all, and you can lose a lot of money really quickly.

In all areas of life, not just in money, being calm helps us be most effective in making decisions and acting upon those decisions. Perhaps someone close to you has a major health issue to face. Or you may find that a family member requires an enormous amount of help from you. Countless things happen in our lives that may cause panic and be stressful to us, but it’s being levelheaded that will help us the most in these situations.

When we’re in a calm state of being, we’re doing what Daniel Kahneman refers to as slow thinking, as opposed to fast, reactive thinking. When we do slow thinking, we typically end up making better decisions.

It doesn’t help to run around with your hair on fire during a crisis. Can you? Sure – it’s going to happen. You’re human, after all. But what’s important is what you do next. Count to ten, get back to that sang-froid state, and think clearly. Being in that calm state of mind will help simplify things and make it easier to make good decisions. Until next time, enjoy.

Gary

If you’d like to read more on this topic, here are a few of our past Coyle Blog posts that you might enjoy:

Fast Thinking VS Slow Thinking

Fast VS Slow Thinking: Emphasis on the Latter Makes All the Difference

 


 

Gary Klaben serves as a Financial Advisor, and visionary for Coyle Financial Counsel. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business BattlefieldWhether 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™.

www.coylefinancial.com
847-441-5644 | coyle@coylefinancial.com

We value your comments and opinions, but due to regulatory restrictions, we cannot accept comments directly onto our blog.  We welcome your comments via e-mail and look forward to hearing from you.

All information is from sources deemed reliable, but no warranty is made to its accuracy or completeness.   This material is being provided for informational or educational purposes only, and does not take into account the investment objectives or financial situation of any client or prospective client.  The information is not intended as investment advice, and is not a recommendation to buy, sell, or invest in any particular investment or market segment.  Those seeking information regarding their particular investment needs should contact a financial professional.  Coyle, our employees, or our clients, may or may not be invested in any individual securities or market segments discussed in this material.  The opinions expressed were current as of the date of posting but are subject to change without notice due to market, political, or economic conditions. All investments involve risk, including loss of principal.  Past performance is not a guarantee of future results.

Copyright © 2022 Coyle Financial Counsel.  All rights reserved.

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