6 Ways To Combat Wealth Myths
The first step to overcoming myths, obviously, is to become aware that they exist, to identify them, and to raise our conscious awareness of how to deal with any financial teaching that we encounter.
The formula for overcoming money myths is offered in six steps:
1. Ask the right questions, such as: Who has a vested interest in what’s being proposed to you: Is this really in alignment with my best interests? What level of control do I have with this proposition? What are the opportunity costs of this approach?
2. Know your interests. Analyze all of the implications of a proposed investment, and see how they align with your interests, values, and your vision of your ideal life. When we have precise visions of what our lives are about, and a clear sense of our Soul Purpose, we can see through any proposal that is not aligned with principle and our purposes.
3. Understand the “value proposition.” You must weigh every financial option on several merits. If you’re unable to see how value is being created, the chances are high that you’re dealing with a myth. Before you rush, under pressure, to act on a hot stock tip, determine exactly how value is being created, and how it will be sustained.
4. Apply the teaching universally, in as many contexts as possible. If something is clearly wrong and ridiculous in one context, the chances are good that it will be ridiculous in any other context. An excellent way to test if a financial teaching is a myth or not is to apply it to any other area of your life and see if it holds true. For example, would you parent a child the way you deal with a 401K? Imagine raising a child by just throwing money at them, feeding them systematically, letting daycare have almost full control over them, and not thinking much about how they are performing until they’re fully raised and it’s too late to do anything about it if things have turned out badly. Of course, it wouldn’t work out very well (but it would be okay since everyone else is raising their kids that way too).
5. Identify the impact that, living the teaching will have on the fulfillment of your “Soul Purpose.” The ultimate end of every one of our decisions-financial and otherwise – should be to get us closer to finding and living our Soul Purpose. Our Soul Purpose is the reason that we were born. It is the thing that brings us the most joy and creates the most value for others. It is the development of our full potential. It is what causes us to reach far beyond the mediocrity of social agreements. It is what gets us beyond a normal life to live extraordinarily.
6. Commit to always seeking every educational opportunity possible throughout your entire life. One of the best ways to cultivate the ability to see through myths, recognize them for what they are, and then to break through them is to be constantly increasing our knowledge. The more we know, the more content we have. The more complete our knowledge is, the better informed are our decisions. For example, the more an entrepreneur knows about historical cycles, her market, her product and/or service, her customers and how to run her business, the less risk she is exposed to and the more profitable she can be. Ignorance is perhaps the highest risk of all.
June 3rd, 2009 at 4:07 pm
I really enjoyed reading #4. It’s amazing when you change the context of something how little sense it makes. That is a great analogy.