No Pain, No Gain: The Hard Truth about Wealth

As behavioural finance continues to bloom, more and more behavioural economists appear on LinkedIn. Because the science is so young, and the discipline so new, upon seeing these professionals, I’m sure most will ask themselves: so what do they actually do?

An interview with Dr. Daniel Crosby recently came across my newsfeed, in which he explained that the essential core of his work was reminding investors of the behavioral principles they should follow in order to maximize their returns. Technical analysis attempts to predict future market activity as best as possible through rigorous, mathematical study of the charts representing the markets. Fundamental analysis will look at the actual companies, and how the current state of each one could possibly affect future market activity. Behavioural analysis will look at the psychological factors that affected the decisions which consequently affected the markets.

Dr. Crosby isn’t a financial adviser; he’s a financial coach. An adviser recommends; a coach drills.

And it’s not just the investment bankers who need the coaching!

Dale Patridge, lifestyle entrepreneur and author of People Over Profit, recently published an article, contrasting his debt-ridden life in 2010 to the 6 figures that he currently earns on a monthly basis. If for every $1 earned in Canada, $1.67 is owed, I can safely say that the majority of Canadians are more similar to Dale 1.0 than they are to the upgraded, 2015 Partridge model.

So what was Dale’s secret? He simply accepted, and swallowed, the hard truth about building wealth when his mentor sent him an email, writing: “Dale, after talking about your financial goals I need to be real with you… You’re a fool. You’re acting like the poor and expecting to be wealthy. You hide behind excuses and think money is a mind game. Dale… money is a behavior game. You need to change your behavior. And fast.”

In our modern age, we’ll often hear of ‘goal setting’, but most forget that along with goals come systems in order to achieve those goals.

So you have someone’s before and after picture to motivate you to lose weight? Well that’s certainly a noble goal. What type of exercise and diet will you be following in order to achieve that goal? Because improvising a new work-out plan every morning won’t get you very far, and you’ll end up discouraged when you don’t see the results you expect.

It’s the same thing with financial goals.

And make sure that your goals are gradual and realistic. Wanting to be able to bench press 800 lbs tomorrow is not attainable if you’ve never lifted a weight in your life. Go to the gym, and speak with a personal trainer about your goal, and then start building a system that will get you there.

Money is not a mind game. It’s a behaviour game.