I’ll be honest, I was wondering what I would write about this month. Then along came Steve Smith.
If you don’t know, he was the Australian men’s cricket captain. Some would say that he held the second most important position in Australia.
After the Queen and before their PM presumably?
That’s the PM that decided to have a plebiscite on whether his Government should enact some basic human rights. Seems odd he needed to ask.
Just recently, Steve Smith decided to cheat. He then doubled down by getting the junior member of his team to cheat for him. And doubled down once more when he lied about the “tape” which was in fact sandpaper.
Next to no-one will particularly remember the PM’s idiocy.
On the other hand, Steve Smith will, forever and a day, be known as a cheat.
What was he thinking?
Some would say he wasn’t. I say he was thinking too much. With a mind that was racing as he tried to actively think about what to do and why.
Every decision we make is emotional (not logical), that’s the process and it’s short term by nature, it’s in the moment.
If needs be we will justify it logically, after the fact, for eternity which is of course the long term.
“I fancy that bit of cake” says emotion. “I ate it because I’m hungry” says logic.
It’s really important that our emotions are in decent shape if we expect to make good decisions.
When we’re not at our best, our emotions are running high, we’re dog tired, we’re rushing around, we’re stressed, the chances of wonky decisions increases.
It’s simply not possible to have good ideas and decisions without a clear, tranquil mind.
Think about it – what “state” are you in when you have your very best, most useful thoughts?
Steve Smith can’t have had a clear mind to have decided cheating was the answer.
And our state of mind is what we need to be aware of when it comes to looking after money.
It’s so easy to get sucked into the short term and make stupid decisions without taking into account the long term consequences.
To take the news (short term) and turn it into “this time it’s different” (long term) – it never is.
To lose faith in a carefully put together financial plan and investment strategy.
Some of the articles we published this month below follow this theme: the short term decision to save money on insurance and the long term effect if disaster strikes or the short term “safety” of some investments vs the long term destruction of inflation.
Yet it is so easy to avoid making bad decisions.
Simply check that your mind is tranquil and clear. If not proceed with extreme caution or, ideally, not at all.
Don’t be like Steve.
Have a terrific April.