WARNING: Your Ego Is Not Your Amigo
Those that have “followed” me for a while will probably know that I am a very emotional person. Perhaps, not as much as the characters of Latin melodramas series, but still, emotions have taken control of my rational mind for several times. If you want a proof of that, just click here to check my portfolio diversification and you will quickly understand! While I know there’s nothing wrong with being emotional, I deeply hate myself when I can’t control it, leading me into a wrong-taking decision. As I dream about being a good investor someday – like the real ones that actually understand what they are buying – I must improve my emotional part, with the expectation of not making the same mistakes I once made again (it wouldn’t be the first time I make the same mistake twice – help please!). Like many, in other to improve this, I read self-developments books, meditate (sometimes) and exercise – that includes sex! Yep, I am luckily not married yet 😉
So, on my last read, Ego is the enemy written by Ryan Holiday I’ve learnt something very important about where a part of my negative emotions come from, the unproductive results thereafter and how to rely on confidence, not ego. In the past I would possibly write down on a paper the main insights of the book, but… wait a minute! I know have a blog! So, why not to post it online? If my words can influence at least one person, I will double my results, getting a 100% ROW (return on words) J. That’s an easy investment decision, isn’t it? (Hopefully it will influence someone though!)
Your ego is not your amigo, but…
…the enemy of what you want and what you already have: Of mastering something, of creative insight, of working as a team with others, of building loyalty, of retaining your success
Wherever you are, ego is too
During our lifetime, we find ourselves at one of three stages. We aspire to become financially free -working hard and spending spare time to increase our cash flow (planning, learning, side hustling, blogging, making our little start-up business and so on). Then, we have achieved success, perhaps we will reach financial freedom sooner than expected, perhaps we made a business that made us millionaires, or perhaps we have just reached retirement comfortably. Or we have failed, our little business or investing decisions broke us apart, which is likely to happen to me, I think.
Most of us are in these stages – we aspire until we succeed, we succeed until we fail or aspire to more, we fail until we aspire again. Ego is present in every step, being the enemy of building wealth, of maintaining it and build more, and of recovering if we are broke.
This post will only focus on the first part of the book – Aspire, the phase where I – and probably you- am/are now.
In this phase, we tend to be ambitious, set goals and dream big. We must practice seeing ourselves with a little distance, practising the ability to get out of our own head. It’s easy to be emotionally invested with our own work, what is rare is humility, diligence and self-awareness. We must act and live small in order to accomplish what we seek. We should be action and education focused, and forget about validation, recognitions or status – that means following minimalism, spending money on things we need for a living, instead of things we need to keep our ego and social status at that level that make us feel we are someone, but broke us apart internally at the same time. For instance, most of my colleagues think I haven’t got a damn £ just because I drive an old Opel Corsa from 2002 that is falling into pieces. It serves my needs for a daily living while helps me to save more money to archive my goals quicker. What others think about what my status is bothers me nothing, and it shouldn’t bother you neither.
We create the impression that silence is a sign of weakness. So, we talk as though our life depends on it. In the reality, silence is strength – particularly early on in any journey. Why? Because after spending so much time thinking, explaining, and talking about a task, we start to feel that we’ve gotten closer to archiving it, when in the reality we are just going backwards. Have you ever experienced this sort of meeting when people talk about the great things they’ve done in the past and their accomplishments, but after that they do little?
To be or to do
Ego tell us that we have to be someone, chasing fame, studying difficult master degrees, constantly searching for promotions, large salaries or awesome job titles to show on our CVs and Linkedin profiles. Investors controlled by ego want to be the ones that beat the market, to be right on their investing decisions and to be financially free -or richer- sooner than the neighbours, leading us to the cliff – that’s what ‘ego the devil’ does. How many analyst/investors predict the market direction and state it quickly afterwards if they were right about the sentiment? Isn’t it just for recognition?
So, what about if we focus on what we want to do, on what we love to do, on what we enjoy doing or learning, on something that adds meaning and purpose in our lives, instead of recognition? What about if we accept our mistakes, learn from them and act before ego sentences us to misery?
Don’t be passionate
Believe it or not, passion can also be you enemy. It typically masks a weakness. Passion is a poor substitute for discipline, for mastery, for strength, purpose and perseverance.
I didn’t want to believe this, because as I said above I am a very emotional person, and always thought that it’s helped me to move on rather than the opposite. However, when I look back at the past, I realise that whatever I have archived on the way has been because of its purpose and realism. A few years ago, I was so passionate about producing music that I would only sleep 4 hours per day and even skip meals. Was there a purpose behind that? None, fail, restart.
Passionate day traders believing to be investors can spend 20 hours a day in front of their computers trading passionately, thinking they can become rich quickly to end up controlled by their own passionate emotions, which equals losing money.
Purpose is about pursuing something outside yourself as opposed to pleasuring yourself.
Realism is perspective and planning our journeys.
Follow the canvas strategy
Greatness comes from humble beginnings, it comes from grunt work. It means you’re the least important person in the room – until you change that with results.
Building up your networking may seem a thing to do for extrovert people, but there are some steps introverts, including me, can bear in mind to help expand our contact lists – this post from Caveman @ Ditch the Cave, runs through some practical tips.
So essentially, helping yourself by helping others, that’s what the canvas strategy is all. Making the effort to eliminate short-term gratification for a longer term pay-off – just like investing, isn’t it? Whereas everyone is after getting credit and being respected, we can forget credit! Bye-Bye! Let the others take their credit on credit, while we defer and take interest
Get out of your own head
The more creative we become, the easier it is to step out of our journey – the one that guides us. Our imagination, which can be a great asset, it is also dangerous if it runs wild (again, check my portfolio). Combine it with deep passion and you will get lost in the excitement until we step onto a land mine, ready to knock us out first round. How can we predict or plan our financial future while being slaves of our emotions and irrational mind? How can we stay hungry and aware? How can we appreciate the present moment? We are just in a bubble of unrealisable dreams that we strongly believe in, just to realise that there’s no way we will get that far. Living clearly and presently takes courage. We shouldn’t live in the haze of the abstract but life with the tangible and real, even if it’s uncomfortable. There’s no one to perform for, there’s just work to be done and lessons to be learned, in all that is around us.
The danger of early pride
Pride, that great feeling we all get after an accomplishment or a success. Like ego, pride blunts our best weapon we need to own in order to truly succeed – our mind. For a beginner investor like me it is also a toxin to avoid. As an example, on my first portfolio update , I stated proudly how my vanguard ISA outperformed the S&P 500 in 2018. Pride smiled at my cleverness and genius, as though what I’ve exhibited was merely a hint of what ought to come! In reality, I was just lucky, not clever…
We must prepare for pride and kill it early – or it will kill what we aspire to. We must be on guard against that wild self-confidence and self-obsession. It is the fighters who should be our peers – not the proud and the accomplished
If during your first year of investing you did well, calm down, or you will next lose more than you got earlier, which is likely what will h
Where we decide to put our energy decides what we’ll accomplish. That’s easy to say but not so easy to do. What does our ego want from work? It wants the time we spend planning, attending conferences, watching tutorials, reading blogs or books, blog posting, chatting with impressed friends or sharing cool stuff on social media to count as an accomplished success. It wants to do the fun stuff that gets attention, credit or glory. Let’s admit it, we’ve all been here at some point…
Are we making an investment in ourselves instead of our ego? That’s the million dollar question…
If you like this topic and want to read further then I suggest you read
Catherine Robson’s article on “Why ego is an investor’s worst enemy”, which ends as follows:
As personal investors, keeping our ego in check, remaining students of investment markets and hedging our bets with genuine diversification might just be the best way to navigate the challenging times in which we find ourselves.
Now is your go, has EGO ever made you chose a bad investing or personal decision?
This post contains Amazon affiliate links. If you purchase something from their website after clicking, I will get a commission. However, I plan to donate any blog income troughout 2019. More on this here.
MY PROGRESS TOWARDS ONE MILLION
THE DONATION MILESTONE
"Being financially competitive can literally derail you from the goals you have set for yourself. It causes many people who are currently struggling in their personal financial journey to blame others for the hurdles they must overcome"