Choose your "Hard"

August 7, 2022

Before getting into the article itself, I have a confession to make: My wife is a personal trainer, and we have a gym at home, yet I haven’t worked out in at least a month. No one is immune to the forces of inertia. Now that I got that off my shoulders, let’s talk about life.

Life is hard. Losing is hard. Being good enough to win is hard. Easy buttons don’t exist in reality. Every day we make decisions that impact us for months/years to come: What we eat for breakfast/lunch/dinner, whether we go to the gym or watch TV, make time for friends or decide to “stay in.” In the moment, these choices don’t seem consequential… but compounded over time, they have a significant impact on our health, happiness, and financial wellbeing.

In the investment business, we like to talk about the benefits of compounding as if they don’t exist in every facet of daily life. It is not that compounding is a foreign idea, it’s that the good type of compounding takes time and requires discipline to make hard decisions over and over again, while the bad type seems to happen without even trying.  

It’s not your fault that it seems hard to make sound decisions. Technology evolves at a rapid pace and our brains (and decision-making processes) simply can’t keep up. We are literally not wired to choose healthy over unhealthy, running vs. sitting on the couch, or investing vs. spending. Interested in going down a rabbit hole on the flaws of human decision making and how that plays into money? I recorded a podcast with Dr. Daniel Crosby touching on this very subject: Frank Garcia, CFA & Dr. Daniel Crosby: Your Brain on Money: How to Make Better Financial Decisions

So how do we overcome this: If we aren’t good at making hard decisions, what do we do?

Automate: More than ever before, technology can be your friend. Want to eat healthier? Order groceries from home to avoid the compulsive purchases at the store and/or grabbing a "snack" on the way home (Taco Bell being my personal "snack" of choice). Want to get out more? Schedule time to exercise/be with friends on your calendar and hold yourself (reasonably) accountable to these events. Want to save more? Establish automated transfers to your savings/investing accounts and set category spending limits on your credit cards. Want to ignore the trials and tribulations of stock market volatility? Set guidelines for how often you look at your investment accounts and app time limits if you look at things on your phone too much. If we know we are inclined to make bad decisions, automate your life in such a way that you end up making fewer decisions and thus mitigate the possibility of making bad choices.

Moderate: Going from 0 to 100 is a surefire way to make sure you don’t accomplish anything in a sustainable manner. If you are not currently saving money, try saving a small amount daily/weekly. If you want to increase your savings, don’t go from saving 2% of your income to 50%. Try going from 2% to 5% as a start. Just like we tend to do “Yo-Yo dieting” we also tend to do “Yo-Yo finance” where you save like crazy, then spend it all in an “I can’t take it anymore” binge. Moderation is key, getting 1% better each and every week will lead to incredible changes (or as we say in the investment world, compounding) over time. Slow and steady will always win the race.

Forgive: The best way to be disappointed in your progress is to expect perfection. Experts make things look easy because of the amount of practice they put into their craft. Guess what? Those same experts make mistakes too! Just like I can’t go from not exercising for a month to running a marathon, most people can’t go from bad savings habits to great savings habits overnight. It takes time, you will have some missteps, but the goal is to keep the ball rolling in the right direction.

It's hard to develop good habits... but equally hard to live with the consequences of bad ones. You don't get to avoid "hard" but do have a choice about which hard you experience. As for me, I’ve scheduled my workouts for the next month. I’ll probably miss a few days and will try forgiving myself. Let’s see if I can follow my own advice.


This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.

Frankly Finances is a registered investment advisor with the state of Florida and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration does not imply a certain level of skill or training. Please refer to our Form ADV Part 2A disclosure brochure for additional information regarding the qualifications and business practices of Frankly Finances.

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