“Your emotions are the slaves to your thoughts, and you are the slave to your emotions.” – Elizabeth Gilbert (Eat, Pray, Love)
Contrary to the belief that ignoring or suppressing our emotions is vital to being a better investor, it’s essential to acknowledge and learn from our emotions. Emotions hold valuable information and can help us interpret our lifetime’s accumulated wisdom. By understanding and embracing our emotions, we can make better financial decisions and ultimately live in our wealthspace.
At WellsFaber, we acknowledge the interconnected nature of emotions and thoughts when making well-informed financial planning decisions. Inspired by the wisdom found in Elizabeth Gilbert’s “Eat, Pray, Love,” we recognise that mastering emotions (not ignoring or suppressing them) is essential to achieving success. Financial planning goes beyond numbers and figures; it’s about living the life you want and being prepared for life’s uncertainties.
We aim to help you explore different strategies to help you navigate your emotions effectively in financial planning, enabling you to function at a higher, more fulfilling level.
Here are three strategies to learn from our emotions in financial planning:
Reflect and ask: “What am I feeling, and why am I feeling it?”
When making financial decisions, it’s helpful to be aware of our emotions and understand their underlying causes. This self-reflection can help us identify potential biases or misguided beliefs that might affect our decision-making.
For example, if you’re feeling anxious about investing in a particular stock, take a moment to assess the source of your anxiety. It could result from past experiences or concerns about the current market conditions. By understanding the root of our emotions, we can make more informed decisions that align with our financial goals.
Be specific: Get granular on defining the emotions you are feeling.
Accurately defining our emotions is essential to avoid making hasty or irrational decisions. For instance, you might feel frustrated with your financial progress, but upon further reflection, you might discover that you feel overwhelmed or disappointed. Accurately identifying our emotions can help us pinpoint areas in our financial plan that may need adjustments, leading to better decision-making and overall satisfaction with our financial progress.
Intuition vs Impulse: Learn to distinguish between intuition and impulse.
Intuition is a powerful tool often arising from our emotions and past experiences, and it can help us make better decisions in various aspects of our lives, including financial planning. However, it’s essential to differentiate between intuition and impulse.
Immediate emotions often drive impulsive decisions and can lead to regrettable outcomes. On the other hand, intuition is a more subtle feeling that arises from our cumulative life experiences and wisdom. By learning to distinguish between the two, we can tap into our intuition to make well-informed financial decisions while avoiding impulsive actions that could derail our financial plan.
Understanding and embracing our emotions plays a significant role in making well-informed decisions for our lifestyle financial planning. We can navigate the financial planning more effectively by reflecting on our feelings and emotions, defining them accurately, and distinguishing between intuition and impulse.
At WellsFaber, we are committed to helping you thrive and live in your wealthspace, providing you with the ongoing support you need to achieve financial freedom and peace of mind.