What Game Are You Playing?
Understanding the financial "game" you're playing is crucial to achieving your goals—it's about aligning your actions with your unique aspirations, not someone else's.
As The Psychology of Money , by Morgan Housel shows, knowing your own time horizon and resisting the influence of others’ financial decisions is key to long-term success. Ready to define your game?
“Being swayed by people playing a different game can also throw off how you think you’re supposed to spend your money. So much consumer spending, particularly in developed countries, is socially driven: subtly influenced by people you admire, and done because you subtly want people to admire you.
But while we can see how much money other people spend on cars, homes, clothes, and vacations, we don’t get to see their goals, worries or aspirations. A young lawyer aiming to be a partner at a prestigious law firm might need to maintain an appearance that I, a writer who can work in sweatpants, have no need for. But when his purchases set my own expectations, I’m wandering down a path of potential disappointment because I’m spending the money without the career boost he’s getting. We might not even have different styles. We’re just playing a different game. It took me years to figure this out.
A takeaway here is that few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games than you are.
The main thing I can recommend is going out of your way to identify what game you’re playing. It’s surprising how few of us do. We call everyone investing money “investors” like they’re basketball players, all playing the same game with the same rules. When you realize how wrong the notion is you see how vital it is to simply identify what game you’re playing…years ago I wrote out ‘“I am a passive investor optimistic in the world’s ability to generate real economic growth and I’m confident that over the next 30 years that growth will accrue to my investments.’” That might sound quaint, but once you write that mission statement down you realize everything that’s unrelated to it- what the market did this year, or whether we’ll have a recession next yearis part of a game I’m not playing. So I don’t pay attention to it, and am in no danger of being persuaded by it.” (The Psychology of Money, Chapter 16, Page 173, Housel)
This is the importance of having a financial plan. We ask again, what game are you playing?
Speak with a financial advisor cost free today if you need assistance defining your game.