Intuition is not a magical fairy that can save you in a crisis. Many of us let our lives lurch from one disaster to another, but prevention is always better than cure.
Brian had a heart-attack at the tender age of 48.
Lucky for him it was a mild one. But it was enough to lay him out for a couple of months, and enough to be the wake up call he needed.
Brian had been living the good life… if you’re definition of ‘good’ comes from Playboy rather than Mormon Monthly. Lot’s of rich food. Long lunches and late nights. Beer, wine and a whiskey before bed.
It’s the kind of lifestyle that catches up with you eventually. Luckily it wasn’t the angel of death that caught up with him. It was the minor demon of arm-pain and passing out on the office floor.
“I was a bull-headed idiot,” Brian said. “I thought I’d be fine. I wasn’t till I was talking to the doctor at the hospital. He looked through all my stats – cholesterol readings and all that – and he asked me if my affairs where in order.
“Are my affairs in order? Well no actually! There’s 50 years of living I’ve been planning to get around to.”
So Brian’s life took a lurch to the left. He quit smoking and drinking. Replaced steak and chip lunches with salads. Started walking, and then jogging. From there it’s a slippery slope to Yoga. By 55 he looked better than he did when he was 40 (which admittedly wasn’t great.)
Many of us let lurches like this define the trajectories of our lives. Rather than the gentle bends and curves of a river, our lives follow the lurches and stumbles of a drunken man’s walk.
I guess we’re basically lazy organisms. It’s not until a situation gets pushed to a crisis point that we actually find the motivation to do something about it. Brian had to end up in hospital before he realised he needed to do something about his diet.
But now that our life is in crisis, we need to pull some emergency manoeuvres. We finally decide we can’t stomach our abusive boss’ outburst anymore, and we quit our jobs, without anything to fall back on. The marriage deteriorates day by day, animosity builds, until one day you pack a single suitcase and leave.
Trouble is, emergency manoeuvres are difficult to pull off smoothly. Imagine you’re driving towards a wall that’s 1km away. Right now, if you turn the wheel very slightly, you’re going to dodge that wall easily. Same as at 500m. But the longer we leave it, the harder it gets. 20m? 10m? …5m?
And you see the same story play out in people’s financial lives. It’s not until debt reaches back-breaking levels that we decide we need to do something about it. It’s not until 5 years out from retirement that you realise you need to start saving. It’s not until you realise that you haven’t spent any quality time with your kids this week, that you think you need to get some passive income plays happening.
But just as swerving to avoid a wall at 5m takes major skill, changing the course of your life in the middle of a crisis is a major challenge. If we’re in crisis, then we probably have no time to research options or think through decisions. Emotions are probably running high. You probably don’t have the space or resources to find a new direction you’re happy with.
That wall’s getting closer.
And in crisis mode we find ourselves attracted to hail-mary solutions. This is one of the quirks of human psychology. When things are going bad, we become more drawn to long-shot, quick-fix solutions.
Then, a personal crisis and an appetite for long-shots and quick-fixes is like blood in the water for shonksters, shysters and sharks. Stock-trading software that returns 10% a month GUARANTEED. A diamond mine start-up in the African Republic of Nooneeverheardof. A foreign currency trading system that lets you outwit the 1000s FX professionals who trade currency for a living.
And if we’re in crisis, then we’re not making good decisions. Fear clouds our judgement. You wouldn’t normally trust this guy who claims to be a millionaire trader but drives a 1985 Daihatsu Charade, but you just want it – need it – to be true.
Your intuition fails you. Or more to the point, you can’t access your intuition, because fear and desperation is making you clutch at straws. And intuition is rarely that helpful in financial matters anyway.
Studies show that intuition – the brain’s seemingly magical ability to associatively pull together lots of information very quickly and just ‘know’ the answer – only works if you have the relevant experience to draw on. If you’ve been a fire-fighter for 30 years and you suddenly get a sense that the floor’s about to collapse, there’s a good chance you’re right.
If you don’t know the difference between stocks and bonds, and suddenly you’re asked to chose between stocks in a junior miner in Zimbabwe, or bonds from the Kazakhstani Government, you’re intuition will have nothing useful to tell you.
(I could leave space for that intuition that’s better labelled ‘mystical guidance’. But if it exists, I’m sure it only happens in moments of peaceful clarity, not in a crisis. Nor would I want to bank on suddenly developing that skill now they’re about to repossess your car.)
If it’s one thing you get from me, I hope it’s the idea that there’s no shortcuts in this game. There’s no substitute for putting the time and energy in research and skilling up.
So what’s my point? It’s very hard to make good decisions in the middle of a crisis. The best way to avoid those sharks who prey on the desperate is to not let yourself get desperate.
Just don’t let it reach a crisis point.
Take the long view of your life. See the road you’re on. If you don’t like where’s it taking you, change course. It’s easy if you do it now.
Take responsibility for your life, and take it now.