Are Your Perceptions (about Investing) Harming You Financially?

Try these on.Our perceptions directly impact how we make decisions. When it comes to investments and other elements of financial life, however, these perceptions can actually harm our ability to accomplish goals. We perceive that the stock market is risky and fixed income is safe; We perceive that real estate only goes up in price; We perceive inflation is a threat and therefore investing in gold is a good idea.


Often, much of our initial work with clients revolves around “un-learning”. That is, helping shed light on myths or perceptions they may hold as truths that are not actually true. Some of our ideas about money come from our upbringing. Most of it is part of our DNA, our genetic makeup. Think about your siblings or your children and the distinct differences from one to the other on financial matters despite being raised the same.


Just because we are “hardwired” a certain way does not mean all is lost. We simply have to recognize these pre-dispositions and be aware of how this might impact ongoing financial decisions. A good first step is to recognize what we control and conversely what we don’t. We cannot control the markets or tax rates or inflation but we can control our expectations, values and perceptions.


Think about the proverbial visage of “pushing water up a hill”. Gravity is what makes this task difficult and we can’t control gravity no matter how hard we try. The key is to understand that, and focus on our perception of what getting the water up the hill step by step will be like.


Remember our formula, “Beliefs (of which perceptions are a part) + Actions= Results. Don’t let your perceptions become an obstacle to progress.

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