KEY POINTS:
What risk do we face if we let fear get the better of us when it comes to money?
Emotions impair judgment; so emotional people often buy when they are blindly elated or greedy and sell when they're fearful or depressed, and pay the price. Immediate gratification can cost dearly. With financial wisdom, you can make profits no matter what the market does. It is not so much what the market does on the outside that counts any way. It is more about the vision and longer term strategies you set and stick to that have been wisely and patiently guided and decided from within.
So, how do you manage your financial emotions and neutralise these calamitous extremes?
The key is not to get elated if you make money and not to get depressed if you don't. But just keep saving, investing and gradually earning the right to handle ever greater levels of risk and reward. What helps you create that stability is the ever-growing base of your untouched, but continuously growing, immortality account. An immortality account is the account you save into before making any other expenditure, that lasts more than a life time. It is this stabilising account that cushions the swings. Why the term immortality? Because it is wiser to have money at the end of your life than life at the end of your money.
How can I avoid making emotional decisions when it comes to money and start making objective and strategic decisions instead?
Set up an immortality account as a first and foremost priority. Just keep dollar cost averaging monthly deposits into the account and take advantage of the swings in the market. Secondly, whenever you're faced with a challenging financial decision induced by the outer market volatility, remember your long-term vision and cause. Review and either stay with your strategies or refine them. It is smart to focus on long-term financial objectives more than the immediate market swings. Let your inspiring vision override your despairing fear and let your inner wisdom rule your next outer action. This is how you override your financial fear and build an account that could leave a legacy.
