What drives your financial decisions? Is it Greed? Fear?
We know that that drives the casino business in Las Vegas, and it’s what keeps those gamblers coming back in record numbers year after year. It’s what allows casino owners to completely tear down and rebuild their billion-dollar facilities every ten years. There’s an adage: “The worst thing that can happen to a person visiting a Las Vegas casino for the first time is, WINNING!”
It’s what keeps many people putting too much of their assets in the hands of Wall St. What I’m saying when I say, ‘too much of their assets’ I mean too much of their important money; Risking more than makes sense for their financial situation. A person’s financial situation includes several things. For instance, age, health, amount of debt, Total dollar amount of assets, and how liquid those assets are. How much secure money do they have? Family dynamics. Those are just a few; I’m sure there are more. What’s troubling is that often a couple near or in retirement is in good shape, but they want MORE (Greed), and I’ve seen the market do irreparable harm to their finances, forcing one or both spouses to go back to work.
Greed: It’s one of the seven deadly sins.
Just like in Las Vegas, it’s ok to “PLAY”; play’ means you’re not SERIOUS- you’re Playing. You are not risking money that is important to your future.
Let’s talk about “Fear.”
Fear of what? “Fear” of MISSING OUT! “Everyone” is doing it.” Or, EVERYONE is getting RICH except us”. “We’ve got to hurry”! Maybe your golf buddy brags about all of the money that he’s making in the stock market. Funny, they never talk about how much money they’ve lost in Las Vegas, either.
Lastly, Common Sense.
If this one must be explained, well, I’m not sure I have the time or space for that. Also, I’m not sure I can make that understandable if it’s not intuitive. But, I will say that having a financial PLAN that considers your age, health, debt, liquidity, and how much GUARANTEED money a couple will have in retirement- THAT shows common sense.
Knowing the difference between “Play” money and “Important” money also demonstrates common sense.