Keep Money in Your Wallet by Keeping Your Emotions in Check
The worst possible scenario when making decisions is allowing decisions that impact your finances to be influenced by emotions. Some of the most financially savvy individuals adhere to the business precept that emotions have no place in the workplace.
When it comes to investments, the only path forward is the one that starts with a clear head, free of emotional distraction and preoccupation. In real estate investing for example, many details are overlooked when the decision maker is in an emotional state. These overlooked details lead to costly errors and omissions.
Make Logic the Key to Financial Insight
Though it may seem contrary to human nature, emotional decisions nearly always lack rational, logical thinking. Emotions run high and low and are rarely absolute. Financial decisions require far vision in order to exact maximum benefit. Logic and common sense go hand in hand with making decisions.
Warren Buffet’s cold, hard decision making is based on his propensity for maintaining logic and common sense. He often presents the picture of his decisions with such astute clarity, logic and common-sense factors sail over the heads of his competitors. As a result of his lack of emotion when making financial decisions, his choices are mostly always on the mark with a stunning display of accuracy. Suze Orman is another of today’s popular financial wizards. She typifies the same emotionless decision making as Warren Buffet in her financial advice to others.
How Emotional Decisions Poorly Impact Long Term Finances
Perhaps, the best examples of emotional decisions that poorly impact long term finances are seen most often by real estate professionals. There are numerous complexities involved in buying and selling real property. Yet, many individuals buy and sell their real property based on emotional decisions, only to be disillusioned later when their return on investment doesn’t meet their expectations.
Real estate professionals today find that buyers and sellers of real property lack the proper education and skills required to make sound decisions. So, they purchase a “dream home” or “dream office building” without considering the impact of increases in municipal taxes. Emotional decisions poorly impact long term finances by decreasing financial stability as financial investments fluctuate.
My Crying Wallet – The sound of your wallet crying can be avoided. There are myriad opportunities to study financial management of your funds to avoid long term instability.