3 Surefire Ways to Out-Invest the Joneses

How many times have you heard it? ”To reach your objectives, you should have a plan”? Study after study after study reconfirms how much more successful are those who have a written plan versus those who don’t. Yet, chances are, you’re one of the 95% of people who don’t have one. Are you satisfied with the results you’ve achieved to date? Or are you like most Americans who feel that everything is relative and so long as you are keeping up with your neighbors, the “Joneses,” then you must be doing well? I sometimes refer to the Joneses as ”The Wildebeasts,” and you know what lions and crocodiles do to wildebeast.

The one big problem with not having your own plan is that it victimizes you by making you vulnerable to everyone else’s ideas, especially the ideas of those individuals who are good at selling their ideas. Of course, these are people who have no clue about who you are at your root or where you may be going in your life. Here’s a personal example. Often when I’m out socializing, when people find out I’m a financial advisor, they hit me with a couple of questions. The questions go something like this: ”What investments are you recommending these days with the market tanking like it is?” or ”My account is losing money, what should I be investing in?” or ”What kind of performance are you getting for your clients?” Does this sound familiar to you?

Before I had a clear view for my life and a plan for how my money fit into and served my life’s purpose, I suppose I asked many of these exact same questions. But once clear on my direction and committed to my written plan, the need for arbitrary, chaotic input was eliminated. I invite you to do the same.

Let me give you a bit of context to frame my perspective. Imagine yourself for a minute walking up to a Wal-mart greeter and asking ”What should I buy while I’m here today to save some money?” Or next time you’re in an airport, scamper up to the Visitors Kiosk and ask the concierge, ”What’s the best airline for me to fly”?

Don’t these questions sound a little ridiculous? Of course they do. Why? Because you know you do your best shopping when you write a shopping list in advance. Would you dare leave for the airport on an important trip without knowing your destination and having pre-purchased your ticket? No way. So, is it any wonder then why the majority of Americans have such poor financial report cards? They have not determined their destination; therefore, there is no travel plan or ticket to outline their route to travel.

Here are three ways to make sure that you do better than your neighbors, the Wildebeasts.

1. Decide on a direction for your life and write it down. At it’s core, what is your life’s purpose? In other words, if you were in Dallas at the airport, would you be flying east to Savannah or west to San Diego? In the absence of a sense of direction, everything is by accident and nothing is on purpose. Winners live life on purpose. Have a plan.
2. Jettison the notion that you can get rich quick. Acknowledge to yourself that there are no free lunches and one reaps in general proportion to what one sows. Any and all attempts to bypass or circumvent these principles have proven futile again and again throughout mankind. Nature has consistently found a way to reward those who have made the appropriate investment of time, effort, and resources. Regardless of the level of wealth you seek – financial security, financial independence, or financial abundance; you must make the appropriate deposits to be in position to someday make the reciprocal withdrawals. Execute Your Plan…not your neighbors.
3. READ. It’s true…”Readers are leaders”. According to an Associated Press survey last year, nearly thirty percent of Americans read not a single book in 2007. On the other hand, Nielsen Media Research points out that the average household has more TV sets than people. As a result, Americans watch an average of 4 hours and 35 minutes of television each day. Remember the oft-quoted advice about computers that went something like ”Garbage in… Garbage out.” Keep that quote in mind the next time you’re watching Cramer scream at you to buy or sell some stock through your TV set. Never stop learning and developing yourself and your financial IQ.