By Nick Sapienza, CFP
As Published in The Irrelevant Investor

The last few years reminded us that it’s more important to know how it feels to lose money than to make it. The only way to develop respect for risk is to experience financial pain. Once you’ve been burnt, you can develop a healthy anxiety around your personal finances.

Such is the case for a friend of mine. I’ll call him Rich. He’s known to be a worrier for much of his life. At first, he worried about the right things, like what he spent, saved, and even where he lived. Simple, manageable, and firmly within his control. His focus on financial efficiency served him well and allowed him to retire earlier and more comfortably than planned. He won the game.

When you dream of being in that position, you probably imagine all your worries falling by the wayside. Not for Rich. Now, the thought of losing it is what keeps him up at night. There’s nothing constructive about his obsessions. It’s always about things that are completely out of his control.

Rich’s focus on the wrong things not only gives them power, but leaves the right things under-attended. He understands that bear markets are part of investing, yet he can’t embrace their inevitability. His success hinges on his willingness and ability to withstand discomfort. Financially, he’s able, but he’s not willing. Throw out the spreadsheets.

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z - Cover Image: Worry About the Right Things