Carl Richards, Author, The Behavior Gap, shares the psychological trick that instantly reduces financial worry.
Transcript:
CAROLINE WOODS: Carl, you’ve spent your career helping people recognize the gap between what we should do with our money and what we actually do with our money. What’s your tried and true financial advice that’s withstood the test of time about what we should actually do?
CARL RICHARDS: It’s such it’s such a good question because the challenge is getting clear about what actually matters to you. So many of us are basing our financial decisions, our investment decisions, our financial planning decisions around other people’s goals. And this has only gotten harder since we’ve got the comparison machine, Instagram, telling us all the time what our goal should be. So I think the best thing you can do is just take a beat, right? Can you take a minute and figure out, is this my goal? Is this My mom’s goal? Is this my brother in law’s goal? Like, whose goal is this that I’m investing or saving or planning my money for.
CAROLINE WOODS: What about if I know my goals. And I’m not comparing them to other people’s. I know what I want to achieve and maybe I don’t track the market. So I’m not necessarily in tune with volatility or the gains or the highs or the bounce off the lows, but maybe I’m still overwhelmed by finances. What would you tell me in that situation or someone in that situation?
CARL RICHARDS: Yeah, whenever. And this is some of the work from complexity theory. Whenever things feel complex. Right just try. Whenever things feel risky, uncertain, complex, make them simpler. Right, so if I felt overwhelmed, I would be looking around. Let’s first get clear about things that actually matter, right? Chances are, whenever we feel overwhelmed, we’re probably worried about some things that actually don’t matter. Those are the easy things to cross off the list. Right I remember a client of mine years ago, older lady. Her her favorite hobby was knitting. She called me in the late 90s because she was worried about a skirmish in the Middle East. I mean, our investments were super safe. The skirmish in the Middle East matters to some people, but it didn’t matter to her in living in rural Utah. Right you don’t need to worry about that. The second thing I would do is think about things that you can’t control. Like anything I can’t control. I can remove from my list of worrying about. Right if I can’t control currency or what somebody may or may not announce about tariffs. It’s not something I can worry about, except to the degree that I make decisions about my portfolio. So get rid of the things that don’t matter. Get rid of worrying about things that you can’t control. That’s what they’re saying.
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