Why Your Inner "Little Bitch" is Killing Your Investment Returns

Why Your Inner "Little Bitch" is Killing Your Investment Returns

Hey there, fellow investors! Schuyler Cristopher here, your friendly neighborhood finance guide, and today we're diving deep into a concept that might make you squirm a little. We're talking about the "Little Bitch" – that voice inside your head that sabotages your best intentions, especially when it comes to investing.

Now, before you think I'm being unnecessarily harsh, hear me out. This isn't about name-calling; it's about recognizing a powerful psychological force that can seriously impact your financial well-being. This term, borrowed from Sabri Suby's "Sell Like Crazy", perfectly describes the emotional turmoil that often leads to poor investment decisions.

The "Little Bitch" and the Psychology of Money

This inner saboteur thrives on the psychological biases that Morgan Housel brilliantly outlines in "The Psychology of Money".

• Fear of Loss: We're wired to feel the pain of loss more acutely than the pleasure of gain. The Little Bitch exploits this by amplifying the fear of a market downturn, making it feel like the end of the world.
• Greed and Envy: When the market is booming, greed kicks in. The Little Bitch whispers, "Buy! Buy! Buy! You're missing out on huge gains!" This can lead to chasing hot stocks and making impulsive decisions based on FOMO (fear of missing out).
• Impatience and Short-Term Thinking: The Little Bitch craves instant results. It struggles with the concept of delayed gratification, which is the cornerstone of long-term investing. This can lead to jumping in and out of investments, trying to time the market – a strategy that rarely works.

Taming the "Little Bitch": Building Your Investing Willpower

The good news is that you can learn to silence the Little Bitch and build your investing willpower. Here's how:

1. Acknowledge its Existence: The first step is recognizing that this inner saboteur exists. Don't judge yourself; simply accept that these emotions are normal.
2. Reframe Your Perspective: Instead of viewing market volatility as a "fine" for making a bad decision, view it as the "fee" for participating in a system that offers long-term growth. Remember, Disneyland tickets cost money, but you get a fun experience in return.
3. Focus on the Long Term: Remind yourself of your investment goals and time horizon. Print out a chart of the market's long-term upward trend and keep it visible. It's a powerful visual reminder that the market has always recovered from downturns.
4. Automate Your Investments: Set up automatic contributions to your investment accounts. This removes the temptation to make impulsive decisions based on emotion.
5. Educate Yourself: The more you understand about investing, the less scary it becomes. Read books, follow reputable financial blogs, and learn about the psychology of investing.
6. Seek Professional Advice: If you're struggling, consider working with a fee-only financial advisor. They can help you create a plan that aligns with your goals and risk tolerance.

Remember, investing is a marathon, not a sprint. Taming the Little Bitch and building your willpower will allow you to stay the course, weather the inevitable storms, and achieve your financial goals.

So, the next time the market takes a dip and the Little Bitch starts whispering, take a deep breath, remember your long-term goals, and tell that inner saboteur to shut the hell up. You’ve got this!