The pandemic has made us more focused on our retirement savings, income stability and short-term cash flow than ever before. These are important parts of your financial plan, so take the time to consider all the options before rushing into change.
Many of life’s choices fall into two categories:
■ Option A: Exciting and complex and quick, but the action rarely works.
■ Option B: Boring and simple and slow, but it works nearly all the time.
I have been thinking a lot lately about why we are so intrigued by option A.
The list is endless. Trying to sell at the top of the stock market or buy at the bottom, day trading, raising venture capital and seven-day diets. If you can find a way to make some things exciting and complex and superfast, you can sell it to people even when the evidence is clear that it works only rarely.
Compare these options with things like benefiting from compound interest slowly over time, buying and holding low-cost diversified investments, building a business using the business’s own profits, eating healthy and exercising. They work — every time. But few people choose them over the exciting option.
There are plenty of reasons we pick option A over option B. It’s got me thinking about the quiet power of incremental change. Incremental change is about taking small, gradual steps instead of making big sweeping changes.
Let me give you an example from an email exchange I had with a reader about my recent column on doing scary things. This person wants, more than anything, to publish a just-completed novel. But how do you get the attention of a big publishing house?
Now, pursuing an introduction to a big-name publisher in the hope of getting a book contract sounds exciting. Negotiating the big New York publishing industry is complicated. But it almost never works, especially for fiction writers.
I suggested a different approach. Send a personal email to 10, 50 or even 100 people you know and tell them about the novel, why you wrote it and how much you love it. Then, ask them to read it and provide feedback and tell them that they are free to share the book too.
It’s boring and simple, and if you keep at it, there is a good chance it will work if the book is good. I bet you need only one guess to know what reply I received: “Is there anyone you can introduce me to?”
And don’t even get me started on the entire industry built around selling the dream of making quick money. You can trade options, gamble on currencies or jump into penny stocks and get rich. All while sitting in your basement, wearing just your underwear. Why wouldn’t you do that? Well, because it doesn’t work.
Sorry, that is not correct. Let me be more precise. It works just often enough for someone to claim it works and sell it to you. But it probably won’t work for you.
You know what will work? Small actions repeated consistently over a very long period of time. Incremental change is short-term boring, but long-term exciting.
Here is one trick to help you keep picking option B: remember to stop every once in a while and look back at where you started. We often get so focused on the goal that is still way over the horizon that we forget to turn around to see how far we’ve come.
Every day, I make it a point to look back and notice how far I have come. Some days, the distance I have come is clear, while other days I see I still have room to improve. But keeping track of this incremental change helps reinforce why I’m making short-term boring choices. Because at some point, I’ll look back and see how far I have come and short-term boring will become long-term exciting.
Kevin Smith is President of KMS Wealth Management, Inc. and has partnered with FRSA to offer members a retirement option through TAG Retirement Program. More information about this program can be found on FRSA’s website, www.floridaroof.com under the Member’s Login section. If you have additional questions, please contact Kevin directly at 407-923-8724 or by email at kevin@kmswm.com or visit his website at www.kmswm.com.
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