Remain Calm When Making Money Decisions
- 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.
If you’d like to read more on this topic, here are a few of our past Coyle Blog posts that you might enjoy:
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 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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