How to Master Your Emotions and Make Good Investment Decisions
- Is the glass half full or half empty? Whether you’re an optimist or a pessimist, your tendency could be hindering your ability to achieve career success and attain a rich life.
- If it is, Mark Ford explains how you can move forward.
Boldness in taking on new business opportunities is considered a virtue by many… and timidity a vice.
I’m not so sure.
When I am bold, I often gamely invest my time and money into projects that are foolish, unnecessary, and/or unlikely to succeed. When I am feeling timid, I shy away from good and likely opportunities.
Emotional tendencies matter. If you know your basic nature, you’ll be able to make better business and investment decisions by taking contravening measures against your dominant mood.
But how do you figure out such a thing?
Determining Your Basic Nature
Are you fundamentally an optimist or a pessimist? Answering the following questions should help you find out.
- When offered investment or business opportunities, are you instantly and positively excited?
- Do you often take on projects that you regret later on?
- Do you enjoy meeting new people, seeing new sights and going on adventures?
- When talking about a new business or investment with friends or colleagues, do you tend to exaggerate the benefits and profit potential?
- Do you often take on social obligations you later regret?
If you answered yes to three or more of the questions above, I would call you generally optimistic. You may even be overly optimistic.
Now answer these five questions.
- Do you feel that, generally speaking, you have more challenges and obligations than you can properly handle?
- In social situations, do you find yourself often thinking about business obligations or problems? Do you have difficulty staying in the “here and now”?
- Would you rate your boss and colleagues negatively?
- Do you often feel anxious or even sad about going on business trips or attending business functions?
- Do you fantasize about retiring or quitting your job and getting another one?
If you answered yes to three or more of these last five questions, you might have pessimistic tendencies. If you answered yes to all five, you are probably overly pessimistic.
Admittedly, this is not a scientific test. But optimism and pessimism aren’t really scientific terms.
And as I said above, emotional tendencies matter when it comes to business decisions. To push back against your dominant mood, here is what I recommend doing…
Optimists, Curb Your Enthusiasm
Understand that there is a part of your brain that is not operating efficiently. That is the part that, in other people, causes doubt and fear.
Be happy that you have a frame of mind that gives you the feeling that you can accomplish just about anything, but promise yourself that you’ll run all your important impulses through an outside filter.
Don’t sign any contracts or agree to any business deals without running them by a trusted lawyer and accountant first. Tell your advisors that their job is to spot the problems and to be tough on you when you try to dismiss them with quick rhetoric. (That’s what you’ll want to do when they toss a pail of cold water on your fire.)
Don’t buy anything expensive on the spot. Don’t hire anyone on the spot. Don’t fire anyone on the spot. Don’t take a job on the spot.
Don’t send out “reactive” emails on the spot. Wait 24 hours, and then either delete or modify the email. If, in reading the email 24 hours later, you get angry again and want to send it out unchanged, hold off for another 24 hours. Don’t send out that first email under any circumstances. You will regret it.
Don’t ever say anything in an email about anyone unless you wouldn’t mind them reading it… because they surely will. The same rule applies to anything written in letters or spoken on the phone or in person.
Pessimists, Fill Your Glass a Bit More
Accept the fact that you have some deficiency in your brain chemistry. Recognize that your instinctive tendency to see the dark side can sometimes limit your success by dampening your enthusiasm or the enthusiasm of others.
Be happy that you have a natural ability to detect the potential problems in every situation. Use that talent to assess the risks and problems inherent in any major venture you undertake.
Make it a habit to always say something positive before you say whatever it is that’s on your mind.
After you get through writing your daily task list, spend five or 10 minutes visualizing every task. Imagine yourself happily achieving the objective. Even if you find the job odious and the person you are doing it with repugnant, find some way to imagine actually enjoying the experience.
This may seem like advice that borders on the silly – it certainly did to me when I first tried it – but you’ll be amazed at how well it works.
Practice smiling in the mirror. Do this as often as you can stomach it. And then do it some more. Again, this advice may seem ludicrous… but it will work.
When talking on the phone, smile. The person on the other end is cueing off the energy from your voice. If you want him to respond enthusiastically to your ideas, you need to breathe that enthusiasm into the tone of your voice.
Every time you see someone for the first time, greet him or her with a firm handshake, a smile and a confident “eye lock.”
Recognize What Mood You Are In
You may find that your mood swings between optimism and pessimism. If you are like me, that swing can be very large.
After going through a rather deep depression some time ago, I began to chart my mental state in terms of how I felt, what I thought about and what sort of functionality I had.
At the bottom of the scale, I felt suicidal, had repetitively negative thoughts, and could not get out of bed or even carry on a conversation. At the top of the scale, I was euphoric. I loved everyone and everything I encountered.
By logging my moods, I discovered that when I was below a 6, I made bad decisions. I shied away from every challenge or opportunity, including many that could do me nothing but good.
When I was above an 8, I often made bad decisions in the other direction. I would take on almost any new project or invest in any new business opportunity.
Nowadays, I follow a rule that keeps me in good stead. I never make business or investment decisions unless I’m in the 6 to 8 range.
You don’t have to use my system to get the same effect. Simply recognize that if you have significant mood swings, you should defer decisions when you are feeling especially good or bad.
In other words, say yes to new opportunities only when you are not being swayed by your emotions. Whether optimistic, pessimistic or something in between, recognize that whatever your goals are, you’ll have a better chance of achieving them if you approach them with a level mood.
About Mark Ford
Mark Morgan Ford is a lifelong practitioner of writing, teaching, entrepreneurship, martial arts and philanthropy. He has written more than two dozen books on business, entrepreneurship and wealth building (several of which were New York Times and Wall Street Journal bestsellers). As an entrepreneur, he has been involved in dozens of multimillion-dollar businesses, including one whose revenues exceeded $100 million and another that broke the billion-dollar mark. And as a real estate investor, he has been involved in more than a hundred projects and developments, from single-family homes to apartment buildings, office buildings and resort communities. He shares the lessons learned from his decades as an entrepreneur and investor with readers of Manward Digest.