Unless you live under a rock, it's hard to ignore how we seem to move from one crisis to the next, only to have the most immediate crisis resolved with minutes to spare. Remember when the government was going to shut down? You had to endure endless chatter about the impact of the shutdown on your life. But, by the time you woke up the next morning, it was over, after a suspense-filled, last-minute deal averted what had begun to seem like sure disaster, thanks to all of the minute-by-minute updates.
At its height, the chatter around a shutdown verged on comical. Venture Beat warned that initial public offerings would be delayed. But the bright spot for the day was that the Cherry Blossom Parade would go on, even if there was a shutdown.
I know that a shutdown would have hit federal employees directly (much like the more recent crisis of "The Sequester"), so I understand that that particular crisis wasn't a joke to everyone. However, there are a few things to remember:
- The shutdown didn't happen.
- There was almost nothing any of us could have done on that Friday afternoon to change the outcome.
- Surprise, surprise -- there was something to worry about the next day and the day after.
It's amazing how often we fall into this trap of worrying about things that are simply not problems yet. Most of the problems we face are not even really problems at the time we're tying ourselves up in knots. Often these "problems" serve only to call up regret about how we responded to a real problem in the past or worry about something that has a small chance of happening in the future. But none of these things are within our control. So why waste the time?
Because emotion plays such a huge role in our financial behavior, it's critical that we not act on irrational fears about the crisis du jour. History has shown us that the best way to meet financial goals is to have a plan, get to work. and avoid reacting to each and every one of the latest crises.
A version of this post appeared previously at The New York Times.
Carl Richards is a financial planner and the director of investor education for the BAM ALLIANCE, a community of more than 130 independent wealth management firms throughout the United States. Visit Behavior Gap for more of Carl's sketches and writings.
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