Today, I logged into our Personal Capital account to look at how much money we’ve lost after the recent market downturn, and it was about what I was expected.
We’re down about $110,000 from the highs of the market earlier in the year.
And, there are two ways to react to something like this:
- Negative: “Oh, damn! We’ve lost around 8% of our entire net worth in just the last month! This sucks, man. Maybe we are too heavily invested in the market.”, or
- Positive: “Wow! It’s down a bunch, but we also haven’t lost any money this entire year. We’re still happy and healthy, and the market can do whatever it wants.”
I much prefer the positive. It makes enduring these market blips much easier and helps to put things into perspective.
It’s not always easy to think positive. Believe it, it’s not.
But, it’s also an extremely powerful mental exercise that pays benefits in the way that we live virtually every minute of our lives.
Just look at Amy and me at the last FinCon. Happy people!
The lesson my dad taught me as a kid
Throughout my life, my dad has been an amazing teacher. He’s a veteran of the Navy and, through his experience living within that level of structure, he’s developed an incredibly practical view of the world.
The lesson he taught me went something like this:
If you set out in life expecting bad things to happen, then bad things will probably happen. If you expect good things to happen, then by in large, you’ll probably wind up pretty damn successful.
Our minds, though subconscious queues, pick out things in life that we expect to be “true”. Once we form a conclusion, we mentally validate that conclusion through an incredibly sophisticated level of bias.
Bias that we don’t even know is there.
And throughout my years on this earth, I learned something important – something so fundamental and basic that it has literally re-shaped the way I look at life.
The truth of the matter is simple: There is very little luck in this world.
Everyone living in the United States (or, quite frankly, any first world nation) carries with them a hell of a lot more control over their lives than they may think – or even want. People’s lives are a direct result of what they put into them.
It may be convenient or easy on the psyche to blame failures on “bad luck”, but there is almost always something that we could have done to change the outcome.
My dad is a perfect example. He came from a relatively poor family. His family never had a lot of money. His dad (my grandfather) was also a spender, and he struggled with money his entire life.
Naturally, my grandfather didn’t teach my dad positive financial practices. In fact, it was precisely the opposite. He had every reason (and opportunity) to follow his my grandfather’s footsteps.
But, he didn’t.
How does thinking positive make us successful? Consider this…
The magic of the placebo effect
Think about how large pharmaceutical companies test their drugs on the public. One group of people is given the real drug, while the other group is given what essentially amounts to a fake one – why?
Because when people expect a certain outcome, it usually happens.
If you’re testing a pre-workout energy pill, you will probably feel more energized before working out because you expect it to work.
For a weight loss pill, you will probably find spots around your arms or waist that just “look thinner“. It does not matter whether weight was truly lost or energy was gained – at least from a physiological perspective.
If you feel more energized, it does not matter whether that energy came from the drug or from your head. In the end, more energy is more energy.
People make themselves believe in the expected outcome. X is supposed to happen, so in your mind, X probably will happen. Whether the outcome is positive or negative, it works the same.
The lesson that my dad taught me so many years ago has guided how I look at my life. Amazingly, if I expect to have a shitty day at the office, I generally will. If I anticipate that I will add another 10 pounds to my bench press in a month, then come hell or high water, it happens.
I don’t know if this can be called the secret to life or not, but it’s pretty darn amazing. I love being able to simply use my mind to think positive thoughts, and then nice things happen in my life.
Expect what you want, and you’ll get what you expect.
Think positive, but follow through
The moral of this story isn’t some fluffy idea to just
No, that’s not the point.
Instead, thinking positive is a way of life, and it’s the foundation of forcing yourself to be successful. With a powerful mindset that’s seeded in positive thoughts, you minimize those
At achieving financial independence. Even early retirement.
It doesn’t give you a free ride. But, it helps propel you forward. In other words, like’s kinda like those e-bikes.
Equipped with a motor, biking becomes a much more rapid method of transportation. But without giving it a little gas, those motors aren’t helping. In fact, they are just adding additional weight.
You still gotta push the throttle a bit to provide that boost.
Those of us with motors on our bikes will probably get their faster. Easier. And, we will be less exhausted at the finish line, too.
This is especially true when the market drops.
But, we also understand that markets run in cycles. Corrections are healthy. Ups and downs are a natural part of doing business. If everything was always good, we’d never appreciate what we have.
And, it wouldn’t match the realities of life, either. Struggles make us stronger.
Market volatility keeps us honest. And, that honestly could save us from losing our life savings if and when things get really bad.
Tell me: How do you think positive in your life? Do you have any tips or tricks to help those positive juices flow?