Archives for the month of: June, 2008

bridge

photo by Pro-Zak

I was first introduced to the practice of positive self talk while training for a marathon. When facing the notion of a 26.2-mile run in one go, you get to a point where you realize your brain needs some training in addition to your legs, heart and lungs. I don't know that I would've finished without first realizing and then preparing for this.

The idea is that you control your actions or reactions through your own thoughts. So with running, rather than allow your brain to focus on the pain you may be feeling at mile 20, you take charge and lift your thoughts to a more positive space so that your body will lose focus on the negative and muster the ability to charge forward under extreme exhaustion (remember: we're talking 4+ hours of uninterrupted running at this point).

It's no secret (there is a pun here) that this concept works in all sorts of facets of life. That's the whole jist behind the Oprah-backed "The Secret" sensation of recent years. Visualize the positive and make it a reality... though "The Secret" is criticized for its focus on material things like money.

As I move forward in my life and my career, I see this in action more and more. In order for me to do anything, I must first visualize what it is I want to do, then clear out all the hurdles and set them aside for another slide, another time. Only then can I start taking the steps I need to take to get where I want to go.

So why am I talking about this now? Even though I've learned how this works, I find myself tucking it away in my mind and have to remind myself of it. Yesterday, I was in the middle of a 5-mile run and found myself focusing on how tired I felt, how I didn't feel in optimal shape. Then something turned my attention to the fact that I was thinking these things, which were distracting me from actually enjoying my run. So I flipped it around and instead starting thinking how great it feels to run, how I am lucky to be able to run, how I know I can complete this run based on past performance. And suddenly I was rounding the corner to home.

photo by drowning.amanda

photo by drowning.amanda

My head is in personal finance right now so I’ve been doing a lot of reading, thinking, meeting with folks in the space. It’s made me think about my own situation and whether I feel I’ve done OK or a horrible job. The fact that I’m 31 and not in debt (other than my school loans, which are manageable by common standards) signals to me that I’ve done OK.

Am I a millionaire? No. In fact, I don’t even own a home… which leads me to the point of this post:

What is the biggest money mistake you’ve made in your life? Or another way to phrase this is, What is the biggest money mistake you averted in your life?

I had lunch with a financial advisor in San Francisco last week, who told me that almost across the board a huge differentiator between those who are doing OK with money midlife and those who are staring at some major problems is the car. Did you buy a new BMW as a reward for graduating college? Chances are, that was your first mistake which led you down a path of financial problems into your 30s. Compare these folks to those who skipped the new car and you see an entirely different money situation.

The sad truth to personal finance is that we are all on our own to make decisions and plot out our paths to retirement. Yet we see now as in the case with the mortgage market implosion that when a whole group of people make poor financial decisions it can impact our financial markets and drag the economy down.

Why then do we not see more focus on this in school? Why was I never offered a class on how to plan my retirement? Why is there no resource or call to action for me to take control and understand this myself? Finance is personal, yet our decisions, collectively, can have widespread social ramifications.

It’s time to start a personal finance educational movement. And I don’t mean sharing stock tips with your neighbor over the back fence. I mean, let’s collectively share knowledge with each other about the ramifications of poor decisions, how to spot them, how to climb out of a hole if you’re in one, and how to prepare for the future no matter how much money you make now.