“Studies show, decisions made with both a rational and emotional perspective give balanced and well-reasoned decisions.”
By Dini Harris, Harris Financial Services
The economy, for better or worse, is a constantly changing environment. While researching some statistics this week, I came across some interesting parallels between the qualities and habits of successful investors and the qualities and habits found in successful marriages. Looking at these two groups side by side brought me back to the basics, the simple truths and foundations upon which these successful people build their future, whether in finance, business, or personal relationships. Personal financial management and investing can be like relationships; there are honeymoon periods and times when you have to put in the hard work. In early 2020, investors were on a cloud, and then the world was in turmoil, faced with a pandemic. We had experienced several years of continued success and naturally can come to expect eternal bliss. Suddenly the world and our lives changed and will continue to change as things like health, politics, and general unrest continue to rock the boat. Regardless of these outside forces, like a marriage, we are all in this for the long haul. So now the work begins. We are invested (so to speak) in the attainment of our goals. So, here are 5 Principals to consider to get the most from this relationship.
It is always easier to build long-lasting relationships when there are shared interests, hobbies, and values. Finding investments based around these same ideas (called “buy what you know”) can be very profitable and have led to some of our best investment ideas over the years.
2. Be critical of outside noise
Like extended families and in-laws, the financial news is full of opinions and (sometimes self-serving) advice. While it is good to listen to others for guidance and counsel, weigh this information against your own convictions for compatibility.
3. Know your goal
Everything changes in life. Whether it be marriage, kids, college, or your career, all of these things affect your financial goals. Review your goals often and keep us updated as your life changes.
4. Refrain from reacting emotionally
Studies show, decisions made with both a rational and emotional perspective give balanced and well-reasoned decisions. Often times when acting without this perspective we can end up in the doghouse. When investing, reacting emotionally tends to place investors on the wrong side of the curve in the market cycle.
5. Commitment and Patience
Lastly I leave you with this: Have the discipline to stay the course. No great marriage or relationship was created overnight. In the end we are all striving to form strong and resilient relationships.