The Stories We Tell Ourselves

This past weekend I participated in what has become a well over 30-year ritual for me of watching the University of Nebraska play football. Unfortunately, I also had to listen to what has also become another unfortunate and regrettable ritual as well. That being reminded by the color commentator on television that for over 7 years NU has struggled to win close one score games. “Yes, Mr. Announcer we know this! The kids on the field today, were not even in high school when this streak started!” I’ll be frank, I don’t believe in curses the way most people do, but after many a Nebraska loss, I’ve sat staring into the abyss wondering how what I just witnessed unfolded!

This all got me thinking about how the stories we tell ourselves and allow ourselves to hear have a certain power in our lives. My kids get incredibly frustrated because I am constantly asking them to rephrase a statement they have made or question they are asking. Language is powerful. I can get into theological implications of that statement, but I think everyone undoubtedly senses this, even if they are merely on the “power of positive thinking train”, vibes what have you. We all understand our thoughts, words and actions are all intricately linked. First, we think inaccurate or untrue thoughts, we verbalize them and then act on them. Believe it or not, I picked up on this really early in life working with my dad and playing sports. At every turn in life, it has played out, the military and business notwithstanding.

It is even more relevant to how one approaches their portfolio and investing for the future. There are stories we can tell ourselves which are not only unhelpful but also which do not apply to our current situation! Many people approach investing and are armed with a rucksack full mythical stories told to them over the course of their lives. These stories, however, are typically misunderstandings which are then applied to situations that are not similar comparisons. Behind nearly all of this is the idea that we are gambling and somehow could lose everything. After a period of time, it’s as if we don’t even hear or comprehend the gravity of what we are telling ourselves. The myth becomes fact, and we don’t even pay attention to what is happening.

One of the myths I’ve run across over time is that: “My family just isn’t good with money.” This one hurts on many levels because it typically is another way of saying many things without saying them. Typically, when you dig in and do some investigating, the result of a skewed balance sheet had more to do with undisciplined behavior than being bad with money. The money was simply telling of hundreds and maybe even thousands of micro decisions made in previous years. I’ve run across people who make well over 7 figures and have a 5-figure net worth. Conversely, I’ve come across people who earn relatively low 6 figures and have well over 7 figure net worth. The difference is in the choices and disciplines of the individual. Time and opportunity met them both and measured them differently. No amount of market volatility or poor timing can overcome addictive habits and depreciating toys. But I’ve also witnessed the opposite to be true as well! Conversely, no amount of market volatility and poor timing can break the will of someone determined to become financially independent. The person who is disciplined understands that they cannot control market cycles and situations, also tends to be the person who understands they can control their spending, saving, working and lifestyle habits. In a word, these people are content. They are content and at peace with the fact that there are factors beyond their control which may affect their plan at the margins, but no matter what the situation, they are going to make corresponding counter decisions which leave them stronger with time. Slowly and surely, they use their current situation to move closer towards their goal of independence. These are the same people who also realize that independence has more to do with their vision and goals in life, than anything outside their control. The story they tell themselves isn’t that they are victims. Far from it, they are capable, creative, and bound for a result. These people are the ones who understand that they are owners of small portions of great companies who earn profits and share a portion of those profits with them as shareholders.

Profits are the thing which these “independence bound” investors focus on because they are sure and a more accurate indicator of success than market sentiment at a given moment. To expand on this further, let’s use for examples sake, a well-known coffee company as an example. The mature investor mentioned above knows that their investment in this well-known coffee company is earning a profit on EVERY transaction! For every dollar of profit or earnings that the company brings in, they are in turn capturing a portion of that profit in the form of a dividend that is paid directly to them every quarter. This may sound simple, but it is profound. This decision didn’t take any special knowledge or insight, rather it took the discipline to either read a balance sheet or partner with someone who can read it on your behalf.

The stories we tell ourselves are important because they can compete with facts, we know to be true that haven’t quite made their way to the “belief section of our soul.” Furthermore, if you are like me, you must remind yourself of those beliefs early and often. An investor’s creed if you will! Rather than allowing our investment beliefs to be formed by the anecdotes of others, what if we formed our investment beliefs by age old truths which have passed the test of time? What if we passed on these truths to the next generation? If you are looking for a great starting point, I recommend you check out “There’s No Free Lunch” and branch out from there to your own personal investment policy statement outlining not only why you invest, but what you invest in and for what purpose. Who knows, maybe you’ll change the stories your family and friends tell for the better!

If the above stands out to you, please consider the stories you are telling yourself today. Are they real? Are they true? Partner with someone who is determined to help you achieve your vision in life. Partner with someone who will hold you accountable to think and see clearly. It is a small investment to make for the freedom and clarity it brings.

Thank you again for reading this week. Please continue to reach out with questions as you have them at [email protected] . As always remember, I’m wishing you continued Truth, Beauty and Goodness on the road ahead! ?

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