How to unlearn what you know about money

Via No More Practice Education

This article was written by Vanessa Stoykov, group chief executive of evolution media group.

 

As the creator of No More Practice Education and founder of our production house, evolution media group, I have long seen the challenges of a technical industry, like financial services, in finding a commonality and way of communicating with people that is interesting, short-form, and easy to digest.

I have also seen the challenges people, myself included, have around knowing what to do to build their wealth for the long term, while paying for the necessities along the way, and having some fun.

By spending the last 23 years in financial services, I have had the opportunity to learn from some of the sharpest minds around money and investing. To get the best out of this knowledge, I came to the realisation that I had to unlearn a lot of things I thought I knew.

As a new contributor to Morningstar, I will be sharing my journey with you – about what I needed to unlearn about money to really grow my wealth. I will also be talking to interesting people from all walks of life about what they had to unlearn to get where they are today.

This week’s lesson covers availability bias, which really means believing the information you have at hand–even if it’s not the right information to make a decision upon.

This is as true in life, as it is in investing. However, with the advent of the media and its sensationalised version of events, I do believe it has become harder to ignore the information.

I remember watching the news around the time the GFC was happening and my heart rate increasing as it really felt as if the world was ending. So too when Trump was elected.

However, it wasn’t, and it didn’t. If you believe the alarmist information at hand you may never truly invest for the long term again.

So how do you cut out the noise, and stay focussed on the bigger picture?

For a start, I believe in setting a strategy with a quality financial adviser – one that lasts the distance of your long-term financial goals. You need to understand the strategy and more importantly, stick to it.

That’s it. Don’t question it, regret it, or second guess it. If you believe in the ability of that strategy to create the long-term wealth you need, then hold steady.

Sounds easy, right? But it’s harder than it sounds. Staying the course is like sailing the ocean – it’s never all smooth seas.

I have gotten to the point where I ignore large chunks of the news. Not because I don’t care, rather because I care a lot.

Don’t believe what everyone is saying. Get great advice and stick to your strategy. Cutting out the noise, and deciding not to waste emotional energy on worrying about the day to day, is a classic lesson to unlearn.

While it’s not the only one, in this day and age, it’s a big one.

ENDS

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