Information Anxiety? Cognitive Overload? Think About Your Thinking!
The earth is flat. Elvis and JFK are still alive. Man never landed on the moon.
“Poppycock!” we say. Nonsense and balderdash. Surely the vast majority of us don’t believe these to be true!
Yet these statements are supported by volumes of “information” making claim to their absolute truth and factual verification.
So how do we have a rational conversation, or even begin to counter these statements’ absurd assertions? Incredulously, the “information” defending the truth of these statements is overwhelming if one checks the information thread through various posts, bulletins, advertisements, books and other information services.
The really insidious consequence of this: the slow twisting of reality and eventual poisoning of our minds when consuming volumes of this sort of disinformation, conspiracy theories, and distorted reality.
Since 2010, the amount of information added to the internet daily has increased 40 fold to an estimated 2.5 quintillion (add 18 zeros!) bytes of data.
We are swimming, even drowning, in information. But information is only processed data, expressed in letters, numbers or symbols. Either true or false. To make sense of data, it must be developed into Knowledge. Information is NOT Knowledge.
Knowledge is perception gained through learning and experience about people, places, events, ideas, issues, ways of doing things — gathered through diligent discovery, close questioning, and open-minded perceiving.
To reach Knowledge’s wisdom requires information to be inspected from various angles and contexts through multiple experiences, to establish its veracity and value.
Various notables also have weighed in on this critical difference: “There are three kinds of lies: lies, damned lies and statistics” (British PM Benjamin Disraeli). “A lie can travel halfway around the world while the truth is putting on its shoes” (Mark Twain).
We like to be informed. And we want to be clear about important issues—our health, money, family…and even that horrid eight-letter word, politics.
We make decisions, often daily, about our money and our health because of the major life consequences inextricably linked to them.
More information is not necessarily better information. More information can lead to over choice, frustration, confusion, and ultimately inaction when timely action is called for and imperative.
We face two very important inflection points when making important and impactful decisions: First, having knowledge about the issue. Second, knowing how to think about our thinking about the issue.
Sure, some decisions only require knowledge. There is a new tax law change. How does it apply to me? Is my portfolio structured to address inflation? Will changes to the estate tax laws negatively affect me and require any action on my part?
“Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”
At other times, though, it’s the FOMO (fear of missing out) anxiety that creates an itch at the back of our brains urging us to scratch it just to make sure it is a real itch.
The “itch” in the early ‘90s was buying hot biotech stocks, then the highly touted dot-com stocks in the late ‘90s, followed by real estate! real estate! real estate! in the early 2000s. Of late, CBD stocks, cryptocurrencies (Bitcoin, Ethereum, Dogecoin), electric auto and truck stocks like Tesla and Rivian, and for the not faint of heart, the fast-moving day trader plays like GameStop are tempting us all to scratch that itch.
Doomsday market prognosticators foretell the coming abyss of “Dow 1,000,” some proclaiming the only safe haven is gold, silver, some other commodity, or another market sector. They put out massive volumes of information to support their claims. But dig a little deeper and one finds their true agenda.
But who has the time for all this research?
This is where “thinking about your thinking” is key to pulling you out of the depths of mayhem, mystery and myopic thinking.
What is thinking about your thinking?
Napoleon Hill wrote the book “Think and Grow Rich!” in 1937. It’s counted as one of the top 100 books of the 20th century. Hill interviewed many of the wealthiest Americans of the time, primarily entrepreneurs, who started and grew what are today many of our major industrial businesses. When you boil down the essence of the book, it is about thinking. In particular, thinking about how you think about money—attracting, growing, and developing a powerful money mindset.
Reading this, many of you will recognize the two money game analogies we posit to you when thinking about your money. They are the Get Rich game and the Stay Rich game. Yeah, I know. It’s cute.
The Get Rich Game has rules such as saving 20% of your gross pay annually and diversifying and allocating your portfolio to primarily equity positions, along with reducing the impact of taxes and limiting the desire to deploy money for wants versus needs, plus other rules of the game to follow.
The Stay Rich Game has a different set of rules. Such as allocating several years of cash flow needs and wants into low-volatile cash and bonds, and allocating one’s portfolio to weather future financial storms. Also, structuring your assets to limit the damage to your portfolio, and minimizing your income taxes along with minimizing estate taxes, and so forth and so on.
The key is first to know which game you are playing. Most of us play the Get Rich Game during our working years. It’s a long period of time typically stretching out over 40 income-producing years. It’s very difficult sometimes to determine that next crucial transition point when one no longer needs nor wants nor is required to continue playing the Get Rich game.
Just ask any member of the Baby Boomer generation (born 1946 – 1964) who was planning on retiring in the late 2000s. Suddenly, along came the Great Financial Recession (2008 – 2009). The stock market topped out in October 2007. It took almost six years for it to reach new market highs in 2013. In 2007, anyone thinking of retiring, and at that time who was still playing the Get Rich Game, needed to reallocate their portfolio (switch to the Stay Rich Game). Over the ensuing 18 months, the S&P 500 saw an approximate 57% drop.
For many people, their misunderstanding or lack of knowledge about which game they were playing required them to work another five to ten years. Definitely NOT a desired lifestyle at the end of a long work career!
Switching from the Get Rich game to the Stay Rich game requires thinking about your thinking. One’s mindset must adjust from primarily growing assets to preserving as well as growing them. We know this deep down. But do we address it adequately?
It’s about how to address that brain itch, how to deal with FOMO, how to not be tempted to jump into the Get Rich game when you have already embarked on the Stay Rich game, whether you are aware of it or not.
It’s about how to understand the context in which knowledge can help think about a concern, an opportunity, a frustration, and all the other emotional issues that come with family dynamics, money, health…and You.
The primary reason our advisors and our team can help you think about your thinking is precisely because…we are NOT You.
You may be wondering who I go to about my money. There are several advisors—financial, tax, legal, and others who help me think about my own thinking. It’s the same for me as for you.
No matter our level of knowledge about money, we all need an outside source of reason, understanding,
and wise support and engagement to help us make continual smart money decisions.
You can’t read the label of the bottle you’re already in.
You and I share the “curse of knowledge.” Eager and impatient for the broad sweeping landscape, we’re unable to see the forest for the trees, even though we may be an expert on every deciduous and evergreen species.
While we can certainly observe and comment on the bottle labels of those around us, that alone doesn’t fully help others crystallize their understanding and confidence about their money. Reading the label and recognizing the type, shape, and contents of the bottle is just the first step.
Coaxing someone out of their proverbial bottle— encouraging them to emerge, see a much wider horizon, and grasp the potential value of money-related decisions—is quite a different story. To borrow the “tortoise and hare” analogy, tortoises must believe there is a trusted relationship with their advisors, that they can move ahead with confidence grounded in wise knowledge.
We are complex beings. One-offs. N = 1. We want to be recognized and treated as such. This is very culturally American. It’s in our bones, our Constitution and our Bill of Rights.
Information today is overwhelming, continuous, ubiquitous and even crushing at times. It was far simpler 50 years ago to make decisions; there was much less noise.
Today’s information overload—also known as infobesity, infoxication, information pollution and information explosion—is having a detrimental effect on many human activities. Cognitive studies demonstrate that we humans can process only limited information before the quality of our decisions begins to deteriorate. Covid-19 is not our only pandemic!
Our increased information anxiety derives from an ever-mounting volume of junk e-mail, messaging, social media, internet crowdsourcing, the echo chambers of cable news, and the Wild, Wild West of partisan bloggers and podcasters.—From the spread of misinformation, divisive content, and digital algorithm-selected stories and promotions.
In a past, simpler era, humorist Will Rogers joked: “All I know is just what I read in the papers, and that’s an alibi for my ignorance.”
Certainly he recognized that journalism was just “the first draft of history.” Phew! What he would surely think of today’s communications cacophony!
We know we need to limit, filter, sieve and sort out the data before making an important decision. But is that really the first step?
Actually, thinking about your thinking is crucial Step One. Prudent decisions first must be simplified before attempting to move forward. We humans can’t make optimal judgments from a complex situation cluttered with a myriad of thoughts and choices of action. We can only grow effectively from a place of simplicity.
Getting to simplicity and clarity often requires a partnership. “Every writer needs an editor,” an axiom insists. Successful duos in various sectors: the Wright brothers, James Watson and Francis Crick, John Lennon and Paul McCartney, Bill Gates and Paul Allen, Steve Jobs and Steve Wozniak, Venus and Serena Williams, Bobby Orr and Phil Esposito.
Assume you get my point about advisors helping clients defeat complexity and inertia. Two together can be far better than one alone: It takes two to tango, both sides to build a bridge, and always two options to consider: Make progress or make excuses.
Never, never fall victim to allowing information “to be the bully that pushes knowledge around.”
An old proverb: “If you want to go fast, go alone. If you want to go far, go together.”
Our money is definitely no trivial matter. Cutting through the endless misinformation noise, to be “far from the madding crowd” and its frenzied actions, to escape insistent “must do” agendas requires a courageous act:
Believe in yourself. Break from limitations. Ask yourself what you really want. Practice goal-setting, focused visualization, positive thinking.
Don’t get waylaid by the impossible challenge of querying every single data point. Drill down on only what really matters. Simplify. Keep it plain, forthright, no-nonsense. Consult with your advisor as a professional partner.
Think about your thinking.
It’s critical to have a methodology about thinking that helps you overcome fears and hang-ups, that enables you to take counsel with yourself, that blocks out extraneous chatter and babble, and lets you focus on what truly matters and makes a difference in your life.
Legions of the most highly successful entrepreneurs, past and present, have emphasized just how critical “thinking about their thinking” was to creating, growing and sustaining their businesses.
“Thinking is the hardest work there is, which is probably the reason why so few engage in it.” (Henry Ford).
“Keep calm and think different.” (Steve Jobs).
“If we think long term, we can accomplish things that we couldn’t otherwise accomplish.” (Jeff Bezos).
Think. Act. But think carefully before you act. To avoid unintended consequences!
The ill-thought-out introduction of rabbits into Australia and New Zealand for food caused an explosive reproduction of these now feral pests. Kudzu, introduced to the U.S. as an ornamental plant to prevent soil erosion, has since displaced many native species and overwhelmed much Southern terrain. The British Raj in India, concerned about the number of venomous cobras in Delhi, offered a bounty for every dead one—thereby incentivizing people to begin breeding cobras for income; result—the cobra population soared!
The moral of this tale: There always will be “experts” out there frantically anxious to “ready, fire, aim.” You, however, must calmly keep your own counsel. Especially around money matters. Especially money!
Think. While others excitedly run amok with wildly inappropriate “solutions” —Think. Think.
“Think left and think right And think low and think high. Oh, the thinks you can think up If only you try!” (Dr. Seuss)
This newsletter is designed to provide our friends and clients with information regarding the various subject matters covered. It is not designed to take the place of legal, accounting, or other professional advice. If expert assistance is required, the services of a competent professional should be sought.
© 2021 Coyle Financial Counsel, Inc