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Playing it Safe, or, the Cost of Being Average

Average people like to play it safe when it comes to their money. They will say things like “the stock market is equivalent to gambling” or “real estate is too complicated.”

On some level, risk aversion is a good thing. It keeps you both in line and out of trouble. But the downside of playing it safe includes:
  • Missed opportunities
  • Playing the blame game during a financial setback
  • Getting in when others are long gone
  • Never trying at all
Such a good quote: “You miss 100% of the shots you don't take.” - Wayne Gretzky

Playing it safe is a general term, but what does it mean for your personal finances? It boils down to taking zero to low risks in financially un-savvy money moves.

The extent of this varies person to person, given your knowledge of personal finance. You may decide to hide your money under a mattress instead of putting it in the bank (this might be actually a worse than average money move). Or, you may decide to dump all your money into a handful of mutual funds in your company's 401K and consider that as good enough.

Basically, if you know you are doing something on autopilot or at the lowest risk threshold, it’s playing it safe.

I’m no saint, either. I, too, relapse into an average person mentality. Last week, I spent a few nights looking up and comparing “high yield checking accounts.” I was fixated on this task because 2.2% interest is way better than 2% interest, and that’s better than nothing, right? Oh so wrong. Meanwhile, the stocks in one of my investment accounts has a 12% return YTD and another one is returning close to 8%.

It would’ve made more sense to focus on stock analysis and managing my investment portfolio instead of looking at measly 2%-ish rates for checking accounts that often have ludicrous requirements or restrictions.

Here’s some ways to get out of financial average-ness and complacency:
  • Get out of your comfort zone
  • Seek out learning opportunities
  • Identify one or more money-savvy role models whose journeys you admire. Ask yourself, “How did she/he do it? How can I apply that to my situation?”
  • Focus on your own strengths and utilize/pivot your skills to your advantage
  • Learn from others who have the experience and learn from their successes and mistakes
  • Avoid listening to people who have no experience yet love to give advice
  • Take small steps so you don’t get overwhelmed
  • Consistently improve (avoid going on autopilot)

Many of those points can apply to more than your financial life, but the key is to gain knowledge and take initiative. Changing your mindset and routines might not be something that you can do immediately, but be open to the idea that there is more out there. When you're ready, just take a little step. And another one, and another one. These steps can add up for you and your financial well-being.

I'm currently investing time into learning about real estate investments (REITs, tax lien certificates, investment properties, etc.) and seeing what I can do in this space. How do you avoid being average with your money? Let me know in the comments!


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