Nurturing Your Realism

By FirstWave Financial

Not long ago we began using Your WealthConfidence Scorecard to increase awareness of the eight mindsets that contribute to improved WealthConfidence.  These mindsets are gratitude, open-mindedness, cooperation, respectfulness, abundance mentality, connectedness, optimism, and realism.

WealthConfidence is dynamic, it ebbs and flows depending on what is happening in our individual situations and the overall environment. In light of current events, your WealthConfidence may be taking a real blow.  Recognizing this, it is even more important to nurture the mindsets that contribute to improved WealthConfidence so that you continue to make smart decisions about your money and enjoy the financial future you have in mind for yourself and your family.

The mindset to nurture today is realism.

Re·al·ism(noun) the attitude or practice of accepting a situation as it is and being prepared to deal with it accordingly.

Sometimes, accepting a situation is easy – like the weather. You may not like it when it rains for days, but there is obviously nothing you can do to change the weather. You can either accept it and adjust your actions accordingly or not accept it and be even more miserable.  But at other times, acceptance might be your second choice. Your first response to a situation may be to attempt to exert your influence over some person, place, or thing to bring them in line with your expectations. It is only when that doesn’t work do you accept the situation.  This can use up a lot of your energy and damage your WealthConfidence.

It has been said that expectations are the yardstick of disappointments. This is most true of unrealistic expectations. If Your WealthConfidence is dependent on you winning the lottery or making a 15% rate of return every year on your money, you’re going to be disappointed because these expectations are unrealistic.

A version of the serenity prayer written in 1932 by American theologian Reinhold Niebuhr says, “God, grant us the serenity to accept the things we cannot change, courage to change the things we can, and wisdom to know the difference.”

While there are many things about the financial world you cannot control, there are plenty you can. You can invest your money in a low-cost, globally diversified portfolio to help capture market returns instead of gambling with it through market timing or concentrated investing. You can develop the discipline of saving on a regular basis and not use high-interest rate debt. You can avoid conspicuous consumption and instead allow compound interest to exponentially magnify your pile of money, so you will one day have what you need to stop working, if you so desire. 

If you are more realistic about your expectations as to income, investment returns, living expenses, how long you plan to work, etc., your expected future results in your WealthPlan will be more accurate and your likelihood of achieving them will be increased. You’ll be able to make decisions, confident about the effect they will have on your future, increasing your WealthConfidence.

We are grateful to be connected to you and appreciate the trust and respect that we share.  Please feel welcome to contact us for any and all reasons as we get through this time together.

You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.