The ‘Peer Pressure’ card-
It is often said that you are the average of the 5 people that you spend the most time with. If you wish to up your game, you need to up your game regarding your friendships. If you wish to become more outgoing, you need to find more outgoing friends. If you are fearful later in life that all your peers are disappearing because of disability and death, but you wish to remain active and physically engaged, you need to start hanging around with younger people now. If you wish to think outside the box, you need to find different thinkers. The unfortunate thing is that peer pressure comes from whomever we spend the most time with.
When it comes to financial decisions, where do you go? Do you sometimes “hang around the water cooler” asking those passing by about what they would do in a particular situation? You may receive some interesting information, but you will also receive opinions based on the same information because you’re hanging around like-minded people.
This is one of the reasons that I don’t work on my own automobile. It’s why I don’t fix my own air conditioner, my plumbing, or my electrical because I know that there are people who are smarter than me and can work on wiring without electrocuting themselves, people who can work on plumbing without causing a flood in the basement (or even worse, in the 2nd story bathroom). I need people who are specialized in certain areas, things that I know I can’t do proficiently.
We are often affected by those around us. If we share our ideas, opinions, or belief systems, sometimes people will put us in our place, whether or not that is a good or bad place. We need to be able to think for ourselves. We need to be able to grow ourselves. We need to be able to think about other possibilities. If you always do what you’ve always done, you’ll always get what you’ve always gotten.
When you look at the recommendations blasted on mass media about financial advice, you need to remember that mass media is made for the “masses”. It is not necessarily for your own, individual life. It’s not for your own, individual situation. When someone gives you an opinion on what you should do, whether it’s for a 401K, Wills and trusts, life insurance, Roth IRAs, mutual funds, or ETFs - they are bringing to the table the limited view of what they have experienced or and that they probably received from someone else.
This is why you should research and find a qualified professional to discuss these matters. Additionally, you have to be careful when discussing your decisions with a family member or a friend because you will have peer pressure from these people too, about things they would or wouldn’t do. When family or friends give me advice, I always like to ask them what information their opinion is based on. Likewise, people will often ask me questions at a party about what I would do based on what the market is doing at the moment. They’re always disappointed by the answer I give, which is that “I don't know”. It depends upon a person’s specific situation. I don’t know the right choice for someone with whom I’ve never sat down with. First, I need to know what their tax return says. I need to know what their 401K looks like. I need to know what their Roth IRA looks like and how they are positioned. I need to know what their Will says and who their beneficiaries are. Every situation is unique.
So, be careful. You never willingly play this card, but this card will often play you. If you would like more information about how things may play out for your own, individual situation, then perhaps it’s time to schedule your Financialoscopy®.
