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In life and finances, we need to take risks if we are going to grow. The question is how much risk and furthermore, I believe the better question to ponder is what kind of lens are you viewing your perceived risk through. I’ve learned in life that I need to get into the center of the room and in order to do that I need to be perceiving the situation without any biases clouding my lens.
The Center of the Room
When I was learning to do a headstand, someone told me I’d never learn by practicing up against a wall. This particular instructor told me that I needed to get into the center of the room. So, I did.
I created a safe place in my family room away from all objects. I practiced and fell over many times.
Each time I fell I got back up. Additionally, I’d tweak something until I could finally keep my body balanced on my head confidently. Furthermore, I was strengthening my core daily with exercises which always makes inversions more probable. Success in most things requires behind the scenes, not so glamorous work.
When I finally got it, I was ecstatic! I taught myself how to do something hard and I did by falling.
I recognized the value of the statement made to me about getting in the center of the room. We’ll never really learn until the training wheels are off, or the wall is not there. Part of the learning comes through the falling and failing. Falling doesn’t feel good, even if we’ve lined the room with pillows, and so we adjust and practice until we fall no more. The fall is the motivation to get it right.
Failing hurts our pride. As a result, we can choose to walk away or continue to figure out the best path to success. Failing teaches us how not to do something.
Skinning our Knees
For all that I’ve been through, I’ve skinned my knees many times. I’m a calloused person. Someone asked me recently if I could go back and do it all over again, would I? Do I really want to lose all the knowledge, experience, wisdom, and self-awareness I’ve gained? I mean it’d be cool to go back and have another shot at life but I also really dig the woman I’ve become. The short answer is no.
I would imagine most parents struggle in finding the balance between wanting to protect their children and yet learning to give them room to take calculated risks. There is value in experiencing the consequences of our actions but of course, no parent wants to see their kid suffer so you pad your houses and let them go.
At some point, they’re gonna need to skin their knees, though, yes? You’ll put a helmet on them and take off those training wheels. They’ll fall down but with your foresight to protect their heads, they’ll get back up with skinned knees and keep going. They’ll figure it out ‘cus falling hurts.
Avoid the Cliff
I’m a 46-year-old single woman on the journey of saving towards financial independence. That’s a lofty goal but certainly not the hardest thing I’ve worked towards. Additionally, I got sober 9 years ago from drug addiction/alcoholism and that was probably the hardest thing I’ve done yet. Furthermore, I finished digging my way out of debt at the end of 2017.
When I was in the throes of addiction, I lived on the edge and gambled with my life and sanity. I was so afraid of the center of the room, that I mistook a cliff as a way to get into the center of the room. Drinking and drugging gave me false confidence to jump in. I put myself in a lot of dangerous situations. Sure, I came out stronger, but I know many people who have died out there.
This is not the center of the room that I’m talking about. Make sure you center of the room is not near a cliff.
Cleaning our Risk Tolerance Lenses for Life
There could be arguments made that my risk tolerance is higher than the average person because of what I’ve walked through. Conversely, one might say my appetite for risk should be small now that I’m sober and living an intentional life with eyes wide open.
I’d argue my appetite for risk is just right.
I’m not afraid because I’ve been giving a second chance in life. However, I also want to preserve this chance I’ve been given. Because of that, I’ve taken (and continue to take) the time to understand the root issues which lead me into a life of addiction. I now understand the clouded lenses I’ve viewed the world through since I was a little girl. Furthermore, I clean those lenses daily as best I can so that I can see things purely and for what they really are.
Am I perfect of that? Heck no and I’ve written an article called, Lost in Translation revealing how I can still sometimes react out of the wounds of my past.
I’d argue we all do this to some varying degree or another. Our job, if we want to get better in life, is to uncover what is clouding our lenses and clean them up.
I believe our formative years shape how we view the world. Additionally, our risk tolerance is formed. We all have tainted perspectives of the world based on the situations we come from. However, the beauty of growing up is that we can choose to change and widen our perspectives. This is not easy but nothing worth achieving is easy. Here are some action steps to take in an effort to widen your perspective:
- Travel the world and see how other people groups do life
- Educate ourselves and get lost in books
- Work and meet people – invariably your weakness and strengths will be revealed
- Volunteer with people less fortunate than you – that’ll shift your gratitude
- My personal favorite is to take a personal inventory of all past relationships and resentments. This is crucial in understanding the role you typically play. If you want a step-by-step approach I wrote an article on reconciling with your past.
Cleaning our Risk Tolerance Lenses for Finances
Why do I write so much on the other side of things? Because I believe who we are and how we operate in life affects how we deal with our finances. I call it leftovers. We may think something doesn’t affect another area of our lives…but it does. It’s all intertwined and if you get to the root of why you spend too much, save too little, or refuse to negotiate for a higher salary, you’ll find gold.
As I’ve identified for me, my crutches were drinking & drugging. For others, crutches could be shopping and/or comparing/keeping up with the Joneses.
Find the root issue ⇒ heal & reconcile ⇒ change your mindset ⇒ take control of your life and your finances.
As soon as you have cleaned your lenses, you can focus on your appropriate financial risk tolerance and get in the center of the room.
And it can start with knowledge gathering. If you are reading this blog, you are probably already doing that.
The next step is to participate in the conversation. If you are reading blogs but not commenting, I propose you start. Ask questions and risk looking stupid. I guarantee there are others who have the same questions but are too afraid to ask. Ask, learn, and grow.
Getting in The Center of The FI Room
I’m learning that if I truly want to achieve Financial Independence (FI), I need to get into the center of the conversation. There are so many people further along than I that I can glean from so I put myself in the center of the FI room and ask how they’ve done it. I ask for the details.
Accountability is a key to success for a great many things and certainly a financial success. If you have a spouse or a partner, you’ve already got an accountability partner built in. However, it may serve you two to have an outsider view of your financial situation for an unbiased perspective.
If you are single, like me there are numerous ways to gain accountability – financially savvy friends, an advisor with fiduciary responsibility, and/or putting it out there for others to critique. I do this by blogging about my journey. I’ve been corrected and/or challenged several times. I’m all the better for it.
Choose your financial investment strategy and dive in. No one can tell you what your investment strategy is but you can learn how others are doing it and then take action.
My advice is to not get stuck too long in the analysis phase or you may develop paralysis by analysis. At some point, you’ll need to start putting a plan into action. Don’t worry, things can be tweaked along the way as you learn more
The center of the room can seem scary and especially if you are viewing it through tainted lenses. Take the time now to clean your perspective by reconciling with your past. We’ve all got one and so I say it a worthy experiment for all.
Understand the difference between the center of the room and a cliff. Don’t confuse the center of the room for a cliff and fail to take action. Conversely, don’t mistake a cliff for a center of the room and take foolish action.
What can you do today to get into the center of the room?