Some time ago, I read a blogpost by Seth Godin. In this article, Seth ranks the hierarchy of success in the following order of importance:
Seth may have something here.
Culturally, we are obsessed with execution and my workplace is an example. Use this word instead of that word in this communication memo. Use this software solution not that one. “We’re doing it all wrong.”
Execution, while important is not the most important factor to realize success. The same goes with our personal finances.
Execution is a by-product of knowing what to execute on. Knowing what to do comes from a good strategy or plan. A solid plan comes from having clear goals to reach for, goals that are realistic and measurable. This also includes re-evaluating goals over time as needs change. You can see the relationships here so I won’t go on…
I suspect most investors are obsessed with products, picking the right Exchange Traded Fund (ETF), stock, mutual fund or what have you. I know I used to think this way. I now believe this is clearly the wrong place to be obsessed. You can’t see the forest for the trees. If this is you, I suggest you change your ways now.
If you’re going to be consumed by anything when it comes to your finances, get the right attitude first and determine your goals shortly thereafter. Picking the “right” products (that work for you) becomes a relatively simple exercise after that.
You can find more interesting stuff from this best selling author here.
What’s your take on the importance attitude has when it comes to money management?