Emotional Reactions vs. Mind Power
Declaratively, many understood the idea that investments are made in the long run and that this way they have the highest chances to earn a lot of money from investments.
In practice, however, people tremble if the stock market drops by 15% over a few weeks and are tempted to sell everything and forget about everything the stock market means.
Much of the education I try to do with people in the community is to think long-term.
I understand the emotion behind it: "I worked for this money and now I see how 15% of it has evaporated in 2 weeks."
All kinds of emotions come over people: fear of losing money, fear of personal safety, insecurity in their reasoning, etc.
Many of the stock market's corrections come from negative events that feel like "the world is ending." Just a few examples:
2008 - we run out of jobs, go bankrupt, starve to death;
2010 - ends with the EU, the countries will go bankrupt;
2020 - the virus kills us all;
2022 - the war is coming to us
And so on….
But what can save you is your mental resilience.
You can't deal with emotions, in the sense that you can stop/cancel them. You will feel them anyway. It is important to rationalize them.
That means not trusting your current emotional reactions, but your mind.
There is a war inside every man every day. Let us have no doubt.
No matter how popular are the flower power philosophies of positive thinking, there is a constant struggle within us between reason and emotional drives.
We must choose reason, not these types of emotions.
Beware, I mean those instinctive emotions of fear, panic, greed, and laziness; I am not referring to more elaborate emotions: love, empathy, etc.
Let's not confuse.
Now, back to the long-term idea. Why is this idea so hated, internally, and emotionally?
Well, simply because the immediate benefit is not felt emotionally, but only rationally.
Only rationally can you understand that in the long run your investments today will bring you prosperity in 10 years.
On an emotional level, you feel that today you lost 15% of the money you could have had in your account or bought something with them.
Only by reasoning, that is, by questioning and discussing within our minds those emotions, can we diminish their power.
I mean, that's the only way you can get over those emotions - take a step back and talk to them in your mind.
What applies to investment applies to any area of your life.
In all aspects of life, we have this struggle between reason and all kinds of emotional drives.
- To have a fulfilled relationship, you have to control your impulses;
- To build a successful business, you need to control your drive;
- To raise a healthy and balanced child, you need to control your drive;
- To build everything good and sustainable in your life, you must master your impulses.
People who have a good life are those who have learned to control their emotions and use the power of reason.
The stakes of this practical education: how to control your emotions in investments + long-term vision is much higher than the idea that they make a big wallet and become financially independent.
At stake are your vision and your way of being and acting in many other aspects of life.
That psychology that gives you results in real life is not learned by reading tons of psychology and personal development books.
NO, not at all.
That psychology that helps you in real life is based on a little bit of theory and a lot, a lot of practice in real life.
Good luck implementing!
P.S. If you like to read while drinking coffee, you can offer me a coffee too.