Great finances start with great attitudes
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:
- Attitude
- Approach
- Goals
- Strategy
- Tactics
- Execution
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.
What’s your take on the importance attitude has when it comes to money management?
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
I have a feeling many peoples wrong attitudes stem from their surroundings. I think too many people pay attention to the doom and gloom of the media without looking at what is really going on around them!
For example, I know many people who still believe the economy is terrible and that people investing in stocks are losing money or that the market is going to collapse anytime now. These people need to look at what the numbers are really telling us (not what the media is selling). Earnings for companies are at all time highs. Stock valuations, while not bargains, are not excessively high either.
We need to readjust our attitudes to be positive, long term, fact driven thinkers. And avoid the media!
Attitude is SO IMPORTANT in almost everything you do, finances included. I agree with Ben – Godin is great for easy to follow, easy to understand, and practical advice. People who act like a victim to their finances usually are the worst money managers.
I hear ya Daisy. Attitude in life, is pretty much everything. Although I always try and look forward and be positive, get/keep my head on straight, it’s not easy. I’m working on it.
Godin always seems to come through with easy to understand advice that makes sense. Nice post.
I think many of the investors that have struggled the last 5 or 6 years and missed out on big stock gains because they had the wrong attitude. It’s best to have a long-term optimistic outlook, especially after a large crash but many have stuck with doom & gloom to their own detriment.
Thanks for the comment Ben. Having a long-term optimistic attitude and then the behaviours to match, is critical to investing success.
This process is the same for just about anything. That’s why most people try the fad diets, succeed for a bit, and then gain everything back and more. When you ignore the first 5 steps, the 6th one is doomed to fail.
So true JC and very good analogy.
Mark: excellent, (excellent!) post. That is all.
High praise! Hope you’re having a great (long) weekend with family.