Daniel Pink, best-selling author of The Power of Regret: Looking Backward Moves Us Forward joins Fool.com contributor Chris Hill in this video from Motley Fool Live, recorded on Jan. 26. They discuss what Pink calls "foundation regrets" and "boldness regrets," and how they relate to your financial health and stability.
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Chris Hill: Two of the biggest regrets when it comes to investing are, I should have bought this stock earlier or I should not have sold this stock. The reason we don't buy the young upstart, unprofitable company is because of the risk factor involved in it. The reason we sell that young unprofitable upstart company after it's gained 30 percent in the year, it's like this isn't good. It's playing it safe instead of being bold.
Daniel Pink: I think in many ways, these four core regrets go to not only the how we invest, but to some extent, why we invest. A good example of it, which you see over and over again. I think anybody who is listening to this probably doesn't have many in this first category of foundation regrets, but foundation regrets are, if boldness regrets are if only I'd taken the chance, foundation regrets are if only I done the work. What that means is people who regret not studying hard enough in school. A lot of those, smoking. Huge numbers of people regret smoking, not taking care of their health, and not saving money. One of the things that comes out with; obviously Fools know this, is the power of compounding interest in both a literal and [laughs] metaphorical sense.
Foundation regrets are these things where you make small decisions early that seem to have no huge consequence, but over time, they accumulate and then they become unstoppable. I have one guy who I found very pointed, he said, "I regret not saving money diligently ever since I started working." He's 43. "It's nearly crushing every day to think how hard I've worked over the last 25 years, but financially, I have nothing to show for it." What does that tell us though? I think it's something Fool investors understand is that an element of a good life is stability, we want to have some kind of stable platform. When our lives are unstable, when our lives are chaotic and unpredictable, that drains our ability to lead a satisfying life.
Foundation regrets are a challenging one because the nature of regret requires some kind of agency on the part of the person who has the regret. They have to regard as your fault, not someone else's fault. But with foundation regrets, it can be challenging. It's harder to say that if you graduate from college burden with massive student loans. It's harder to do well in university if you went to a secondary school that wasn't very good. With foundation regards we have to be a little bit careful of agency but they are really important, and having that stable foundation is extraordinarily important to people.