Have You Done Your Homework?

I was prepared to finish this week's blog on tips to save money (by far the most popular request). 

But then I came across a blog post from Seth Godin and what he wrote is so simple, yet so profound and applicable that I had to stop the presses and share. 

Feels Risky

The gulf between "risky" and "feels risky" is huge. And it's getting bigger.

It turns out that value creation lives in this gap. The things that most people won't do (because it feels risky) are in fact not risky at all.

If your compass for forward motion involves avoiding things that feel risky, it pays to get significantly better informed about what actually is risky.

When I was a wee-pup financial advisor, it was nerve-racking investing clients' money.   What if the market tanked right after you put it in?  It "felt risky". 

So I tried to be "smart" about it and invest when the market had clearly pulled back.   The problem is sometimes the market doesn't pullback for very long stretches (like the last 9 months). 

With experience and an unquenchable thirst for knowledge, I eventually learned what is actually risky is being out of the market, not potentially stumbling out of the blocks.  It's a long race, and a bad start is inconsequential.  The true risk is delaying your start.   

That's just an example of how Seth's post applies to me.  Until I had the wisdom and experience, I was making decisions based on what "felt risky". 

"Risky" vs. "feels risky" isn't just relevant to financial planning. 

It's really about making the time get educated so you make decisions from a place of strength and knowledge, not emotions and guesswork.

So ask yourself the next time you make a decision (financial or otherwise), are you making it based on the due diligence you conducted and a confident amount of knowledge - or is your decision based on hearsay, your neighbor's advice and that newspaper article you read last week?