‘Scout’ and ‘Soldier’ – Two Mental Models to Engage Change and Ensure Your Family’s Financial Future

Fish or cut bait? Red or white wine? Be a soldier or a scout?

It all depends.

We journey through life making daily decisions that hopefully lead to what we really want.

Some choices are rote and necessary, like eating, hygiene and sleep. But even these daily decisions steer us toward a future of our own making.

Strategic decisions are another matter. They can be life-altering. What school we attend. Who we marry. Who we associate with on a daily basis. The employment we seek and the geography in which we reside.

There are risks, rewards, and an inevitable shifting of our mindset based on where we live, who we are connected with, our lifestyle choices and, most importantly, how we reason, what we believe, and where our overall self-awareness is anchored.

One of the most critical mental aspects to be aware of: Do we think as a soldier or a scout? A recent article in Experience Life magazine explores the topic of how we approach life. Is our mental model more the soldier’s or more the scout’s?

Numbers of you may recall my military background starting at West Point, followed by serving as an infantry officer in the United States Army. What you may not know: Over the years, I commanded two different reconnaissance platoons, at the battalion and brigade level, at Fort Wainwright, Alaska.

Yes, it was very cold!

Infantry soldiers are taught, first and foremost, how to be aggressively effective, weapons-focused, and dedicated to completing their mission at all costs. That focus and determination come with a rigid mindset to persevere until the very end, if necessary.

Scouts, on the other hand, are required not to engage directly with the enemy, but rather to observe, probe, gather intelligence—all with an acute sense of curiosity, caution and controlled action.

We must have both soldiers and scouts for a military to gain the upper hand and win wars.

And so it is with us. We must inculcate both a soldier’s and a scout’s mindset at different moments in our lives. Sometimes we even change from one to another within minutes or seconds.

When we were young our primary job was learning how to develop into an adult, to soldier through various tasks at home and school. We were, at the same time, full of curiosity about everything around us and eager for new experiences. We scouted our surroundings. Mom and Dad kept a watchful eye out for our “scout,” mindful of certain greater risks than merely towing the line as a soldier.

Our childhood: inevitably a hybrid mental model. Sometimes we were a soldier, sometimes we were a scout.

That is the rub. When to employ each mindset.

“Money is my military, each dollar a soldier. I never send my money into battle unprepared and undefended. I send it to conquer and take currency prisoner and bring it back to me.”

—Kevin O’Leary

We see this everywhere in our life. We soldier on, based on certain beliefs, even though we have biases and instilled behaviors that we may not be aware of that quite frankly get in the way of our soldiering. Indeed, some long-standing myths may continue to hold considerable power over our families.

In the late 1990s many Baby Boomers (born between 1946-1964) sought to catch that hot new dot-com IPO (Initial Public Offering of a new company stock) that might yield a 10 to 100 times growth on their investment.

Well, for others of us, that was far too aggressive and speculative. Instead, we bought the popular stock market index, the S&P 500, inside our 401(k) and watched it jump 20-plus percent every year over the late ‘90s.

All of us were soldiering—putting away as much as possible in our 401(k), with some folks catching the dot-com wave to even higher returns and faster- growing portfolios. What a ride!

But somewhere in the recesses of our mind, our scout was reminding us of “irrational exuberance” and questioning whether value investing was really dead? Increasingly we became a bit uncomfortable, a bit anxious. But, enough of that! My portfolio is booming and life is great!

Surely you know the rest of the story. The dot-com bubble burst in 2001 and brought down the S&P 500 more than 49%. Even worse, the tech-laden NASDAQ where all the dot-com “action” occurred fell 77%! Many fortunes were lost—surely avoidable with more scouts at the helm.

Long before the stock market collapsed, the scouts kept cautioning “it’s not different this time,” “value is not dead.” But legions of investors were wildly ditching asset allocation and diversification: “Let’s put all of our eggs in one basket (dot-com and technology) and watch that basket!”

Alas, that snappy phrase proved far more of a slogan than a strategy. It is all soldier and no scout.

There’s a necessary balance to be vigilantly kept between a soldiering and a scouting mindset.

In the investment marketplace we need both. Recently we have watched an unsettling trend of the newest minted generation repeating history with blinders on (soldier mindset). With the nation’s slow but steady COVID recovery, they’re seemingly being enticed toward similar dot-com and real estate-type bubbles.

Yes, we do take advantage of those bull market charges—while remaining wary of too much exposure that may blow up one’s lifestyle and one’s peace of mind.

Our biases are always with us. They can be a crutch, a crucible, or a caution light reminding us to be careful and most importantly aware.

Awareness—especially self-awareness—is a healthy antidote to sickening blunders.

You can’t read the label if you’re sitting inside the jar.

Only by consciously and intentionally exploring outside our comfortable environment can we scout out the facts and insights of others regarding the important issue of our money.

Intellectual curiosity leads to awareness that leads to perceiving circumstances differently so that an optimal decision can be made.

Mere facts are actually not as important as a quality strategic decision reached through wise discernment of the landscape in front of us.

The late ‘90s dot-com experience is being repeated today by the newest investing millennial generation (born between 1982 and 2000). Once again, the S&P 500 seems to have eclipsed most stock market indices of the past 10 years and appears to be the place to invest. But when we look under today’s digital hood at similarities and differences, there are only a handful of tech and E-commerce stocks contributing to the bulk of the return.

So, is it really different this time around? Either way, does it really matter?

While it’s almost always different—yes—it matters! What remains the same is to not be caught up in the flavor of the day.

Boomers learned the hard way—after the dot-com crash and the great financial recession (2008–2009)—about the imperative to stay aware of the stock market’s pratfalls. Their failing to do so extended their already long careers five to ten years longer, just when they were beginning to think about retirement.

Could it have been avoided? With much more scout and far less soldier?

“There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy,” said Shakespeare’s Hamlet. Down through history, inadequate information, greedy passions and wildly

excessive hubris have created bubbles: the Dutch Tulipmania (1634-1638); France’s Mississippi Bubble (1718-1720); the British South Sea Bubble (1720); the Bull Market of the Roaring Twenties (1924-1929); and Japan’s “Bubble Economy” of the 1980s.

At the peak of the tulip craze in 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled artisan. One amusing story recounts a sailor mistaking a merchant’s valuable tulip bulb for an onion and grabbing it to eat. His “breakfast” would have fed his whole ship’s crew for a year. (He supposedly went to jail.)

What’s the takeaway here? Perhaps, the more things change, the more they remain the same.

Market frenzies will always occur. Both the scout and the soldier have critical roles to play in anticipating and managing change.

As we age, we start turning off the work income spigot and turning on the investment spigot. We want to spend more time in scout mode. Very few people, once retired, want to reverse course.

Our perception is our reality. Our wisdom, prudent actions, and intentionality of thought and follow- through are our weapons of choice as we join the more mature crowd.

Gone are the days of muscling through it, nose to the grindstone, simply soldiering on.

Do we soldier as we age? Oh, sure we do. It’s still our primary mindset of living. Even though we now may not have that childlike wonderment we see in our grandchildren, we still have a curious bent and a thirst for both knowledge and decision-making.

More importantly, our world expands as we age. With our family, at some point we transition from “us” to “them.” Children and grandchildren are now making decisions. They are us.

Our role steadily evolves more toward a scout. – A scout who from time to time offers a few sage words to those who may want to listen.

At this stage of life, we are more leader than follower. And, naturally, we’re keenly monitored by the younger generation! Sometimes skeptical, and even stubborn to downright recalcitrant, they watch our every move looking for chinks in the armor, crumbling buttresses and neglected moats!

The younger generation gazes at us, amazed at how darn old we are! Meanwhile, we want to spend time teaching about our ups and downs, sharing revealing stories about wondrous wins and painful losses, and what we’ve discovered over those many years.

Rich lives. Full lives. Lives worth examining. Through good multigenerational communication, our children and grandchildren can begin to set hierarchy aside and develop a peer sense of mutuality of purpose and perspective—emulating their elders where appropriate.

As the saying goes, “time waits for no one.” As elders’ money continues to pile up, one is comforted and fearful at the same time. We know we will be okay. But how about our children and grandchildren?

With our scout’s mental model, what’s our next “us” move for “them”?

How do we now deploy our money, which may require our soldiering on through another down stock market?

Yes, we’ve been here before. History repeats itself. Yes, we’ve gained valuable new experience every single time.

But what do we do now? How does today’s scout decide what to invest in? A new tech company, cryptocurrency, an NFT (non-fungible token), a special “deal” offered to us by well-meaning friends and associates?

Do we buy the latest investment because it provides a great current tax benefit—only to later discover that short-term soldier thinking has seeped into our scouting analysis and compromised our long-term investment strategy?

When thinking back to my Army recon days, scouting was long-term-benefit focused. Many times in training, we could have captured a few soldiers or taken out a small unit for a short-term result. However, the battalion and brigade commanders needed solid intel to draw up their future battle plans and devise the most effective way to engage with the enemy.

In 1965, the American rock band the Byrds had a mega hit with their rework of Pete Seeger’s song, “Turn! Turn! Turn!” The lyrics, in part:

“To everything (turn, turn, turn)

There is a season (turn, turn, turn)

And a time to every purpose, under heaven….”


Life is about change (turn, turn, turn).

As soldiers and scouts, we instinctively know we must seek to anticipate and manage it as family stewards.

Change is inevitable.

(Well, except from a vending machine.)

“Change your thinking, change your life.”

And what about one’s life?

Life is like underwear. Change is good.

As an absolute constant, change is inescapable. By embracing it through continual updating, adaptation and renewal, we align our aspirations with worthy long-term strategies both for ourselves and our families.

To be sure, the risk markets, stocks or bonds, are all about long-term strategies. These strategies, along with asset allocation and diversification, are there to make it through good and bad times with the bulk of our wealth intact.

What better lesson is there for inquisitive younger generations to observe about us and our money!



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.

© 2022 Coyle Financial Counsel, Inc



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