Don’t Surround Yourself with Yourself.

 

As many of you know, I had a first class seat on the epic meltdown of financial markets and mortgage markets specifically, in 2008 and 2009. I worked for arguably one of the best mortgage managers in the world, and witnessed the work of a steady hand in chaotic markets.

But that’s a story for another time.

This story is about people who worked in that company. Because no matter how smart you are, or the resources at your fingertips, unless you can manage your behavior, you can’t successfully manage your personal finances.

In this case, many made big bets on our employee stock options. People failed at the simple principle of diversification. Don’t put all your eggs in one basket. Especially your retirement and your job. From 2007 to 2009, that stock went from $140 to $20. Retirement and lofty dreams were postponed. Today, that stock trades at $35, never benefitting from the incredible bull run of the last decade.

Some of the smartest people I know, who are supposed to know better, got hung up on emotion. It can happen to anyone. You. Me. Them.

Managing your behavior is the hardest part of managing your personal finances. There’s a reason budgets and diets are equally dreaded.

Either you separate yourself from your emotions, or your emotions will separate you from your money.

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