Don’t Be The Bird On The Road – Guest Post
Life is about knowing our limitations. In nature, it is an obvious fact that birds do not run particularly well, they fly. When they do try to run, the consequences can be deadly. This thought filled my mind as I swerved to avoid hitting the carcass of a large dead bird in the road. As I regained control of my car, I began to think how did a bird get hit? Doesn’t he have wings? As often happens, I began to parallel this event and the resulting questions in my mind to investing.
Human beings, like the bird on the road, are designed to exist and operate in a certain environment. Birds are designed to fly and live perched high above the ground. As I observed, when they deviate from that natural environment, bad things can happen. Humans are no different. Deviation from our natural comfort zone can have negative consequences.
Straying away from our investment comfort zone also results in unfortunate events. Most people start out with an investing plan that naturally suits them. Whether that plan is too hold an asset for a specific period of time or until a specific profit target is reached, the plan’s objectives and risks fit their lifestyle and comfort level. Unfortunately, much like that bird, life tempts us to venture outside of our predetermined plan.
Perhaps, the dead bird on the road was tempted to land on the ground by a particularly delicious smelling animal carcass or perhaps it was lured in by fellow birds that had beaten him to the feast. As investors, we can be lured away from our investing plan by the smell of higher returns or a group of friends talking about the hot stock they just invested in. Although these temptations may smell like easy money, the plan must always come first.
The fact is, temptations are everywhere in the investing world. From the talking heads telling you to buy the next great stock or the desire to hold on to an asset after your goal has been met in the hope of making even more money, we must exercise great self-control to stay on track. As humans, we have to realize that the lure of more money or quicker gains is a real threat to our financial well-being. The key to avoiding those threats is to have a solid plan and stick to it. Therefore, the next time the sweet smell of temptation makes its way to you, remember the bird on the road and stay up on your perch. Follow your plan and avoid becoming another casualty on the road to wealth.
Rusty Holcombe is a financial advisor and founder of Holcombe Financial. He has recently published his first book, You Should Only Have to Get Rich Once, designed to educate people about how to preserve their nest egg and make it work for them during retirement.