Podcast Ep. 6: Letting Go
Invest In Your Life Podcast
Episode 6: Letting Go
How on earth can "letting go" help better your financial life? The same way it helps better your life in general. In this episode, I discuss how letting go is an essential and crucial part of any real investment strategy. I also discuss how the resistance to letting go manifests itself in different ways in behavioral finance and get into how not letting go cost some folks I know hundreds of thousands of dollars.
So are you clinging to something in your financial life? It may be what's holding you back.
Full Episode Transcription:
00:00 Okay, welcome to the Invest In Your Life Podcast, the show where we explore the connection between personal growth and personal finance. My name is Patrick King, and in each episode we'll talk about what you can do to live a life that's truly rich. Don't take this the wrong way, but I am not giving you advice. I only give advice to clients who have hired me to be their fiduciary financial advisor. If you're not one of those folks, then just consider this to be helpful tips and information and be sure to consult with your financial advisor, your attorney, your CPA, your witch doctor, or your mom before you try this at home. What's up? People got a good episode for you today. This time the topic is letting go. Letting go. What does that have to do with a better life, financially or otherwise? We'll get into that. But first, let's have our gratitude.
01:29 All right, so my gratitude this week, like these meal services, Green Chef, and then Instacart where I could just have someone bring me groceries from the grocery store. It's crazy. Uh, start with green chef a. It's kind of what I'm doing right now. Uh, it is, I think, uh, was it? Hello? Fresh is another one. They bought this green chef plays it because all of sudden the right amount of food shows up. There's nothing wasted just delivered to your door. I really actually enjoy the cooking part. You know, there's, there are times where I wish I could just throw it in the microwave and go, but when I'm actually putting the ingredients in the pan, in the oven and all that stuff, it just tastes so much better. And a, and an instacart on that into things. You know, I'm, I'm, I'm busy. Like I run a business so my time's worth a certain amount per hour and it just makes sense for me to have someone bring me my groceries sometimes. You know, not all the time I do enjoy going to the grocery store, but, but yeah. So that's my gratitude. Like what kind of crazy time do we live in where you can punch something on your computer in so much shows up with your groceries, are the right amount of food every week. Just shows up on your doorstep waiting to go. It's crazy. It's really cool. All right. It's a, I dunno, it's silly, but I'm grateful for that. That's the gratitude for this week.
03:06 Okay. Okay. The topic does, you are, let's get into it. Letting go. Letting go. Yeah. All right. So what does letting go have to do with your financial life or your life in general? Really all this could be applied to life on a bigger scale other than just your financial life. Uh, yeah. Yeah. No matter what your investment strategy is, there's a certain amount of letting go that's required in order for you to execute that strategy successfully required. Yeah. I mean, it's just the s the folks that are out there that say, hey, we can do this because of this. When it comes to investments, it just cracks me up. Like we're not in control folks. It just absolutely cracks me up. You know, especially when you tune in to the financial news when they say, Hey, the markets did this because of, or you know, the markets are down on news of x or the markets rallied because of why those factors, they may have actually played a part, but they, there's not, there's not a one to one correlation on any of this folks.
04:29 And sometimes the markets don't need a reason to move all at all. People need is a reason to freak out or get overly greedy and the things can move real quick. Right? And so part of actually having your strategy is knowing that you're not in control of what the markets can do. Sometimes it's understanding that over the short term and that the markets can be irrational, but over the long term, things tend to even out. And that's a good way to start your investing, you know? So long-term investing always involves some form of letting go when it comes to the market over the short term. You know, there's a quote that Warren Buffet, uh, of, of Warren Buffett, is it a quote he said? Or, anyway, it's a Warren Buffett quote and it goes something like, if you cannot control your emotions, you cannot control your money. And if you're going to control your emotions, you need to let go of that idea of control when it comes to investing the markets, stock markets, bond markets, domestic, international, that idea that we have control is what's going to get you emotional, get you irrational and have you do something that's not wise. It's going to get you out of your strategy. Yeah. And then it, you know, with take it a step further, you know, when you talk about financial plans,
06:14 When I'm working with clients and I'm like, okay, how do we do all these things that you want to do in your life? How do we make sure that you check off these boxes before you check out?
06:25 You know, we planned for you to have a long life, but guess what? None of us are guaranteed another day. We're just not. And you know, it's, it was, it would suck if that happens, but that's the truth. So it was time to start moving on those dreams. Those goals, those things you want to do before you check out. Give me a shout out. Let's figure out a way to do them.
06:52 Yeah, letting go. Letting go. It creeps up in behavioral finance a lot. So there are a few things I'm going to throw out here. Uh, where where we're letting go or not letting go creeps up and it causes people to do unwise thing was with their money. You the first is anchoring. Anchoring. Yeah. If you, gosh, I just, I remember working with some Coca Cola people here in Atlanta back before the financial crisis. A lot of people wanted to wait until their coke stock gets to, I think it was like 90 bucks a share before they exercise a bunch of ox options. So they had this, this anchor point of a share price that they were emotionally tied to before they wanted to cash in. Instead of having a strategy to start taking money off the table methodically over time, they wanted to make a call. Well guess what? The financial crisis happened. Did it ever get to 90 or whatever it was? Of course not. And while the financial crisis was happening, those options expired and poof gone. So yeah, letting go of that idea of I need it to be, this could have saved them or could have, it could have gained them money from those options. Loss aversion is another one where we're afraid to lose more, then we're excited to gain. And it's like a factor of three to one. So psychologists have figured out that
08:38 a $100 loss, the amplitude of emotion is about the same as a $300 gain. So to say that again, the emotional equivalent of a $300 gain is a $100 loss. And that crazy that you would have to, you would have to win three times as much to feel as him like have the same emotional impact as a loss of one third of that gain.
09:15 So we anchored to these numbers quite a bit. And then the last one I want to throw out as sunk costs. Do you ever like signed up for, let's say our bought tickets to a concert or a ballgame or something, and then something came up where you couldn't go and you'd just tortured, tortured yourself over that money. There are nonrefundable, well, guess what? Sunk costs. It shouldn't effect your behavior going forward, but it's hard not to get wrapped around the axle around that money. This is one more way we're letting go, can free your mind and let you make the right and rational decision. And I'm gonna leave you with a, with one more quote on this. And I love this one. And this is from the Buddha. You can only lose what you claim to love that. Okay. That's the topic. Does your today
10:32 alright? Ordering off the menu this week. I'll literally ordered off the menu this week. Yeah, I'm still, uh, still on this weight loss kick. And, uh, so yeah, this is not a big one. I just ordered nope, no bond for this grilled chicken sandwich at the tree house here in Atlanta. Treehouses cool, man. Oh, it's, it's kind of old school. Definitely casual outdoor. Uh, yeah. So I really wanted that, that uh, that sandwich, I just didn't, didn't need the bond, so I know that's kind of a lame one, but man, that was good. All right, that's enough of that for this week
11:23 Q and. A. Let me hear you questions. What's your gaff for me? Hit me up at Patrick at invest in your life, podcast.com or visit, invest in your life, podcast.com and send me a message there. I want to know what you think of letting go. What's something you feel like you need to let go of, whether it's in your financial life or, or in another part of your life. What are some things that you're cleaning two, if you've got your hand grasp around something that you're clinging to, you can't hold on to the next thing. So yeah, hit me up. Would love to hear from you.
12:14 Pura Vida. For my Pura Vida this week. Yes. March Madness. I mean, I have to say I'm not a huge, huge basketball fan. Uh, I'm a Clemson Fan, so football season is our time and man, I love my Tigers, but you know, we're just, we just haven't been that good in basketball. Uh, so we get a heartbroken a lot there, but it's all right. My, uh, my amazing girlfriend is a Kentucky Fan, so we have been into the march madness and it's really kind of amazing that, you know, okay, yes, it's sports. Yes. You know, there are lots of issues around the athletes and the NCAA and, and all the money and the gambling and stuff that goes through it, but it's really kind of a unique scenario that brings us Americans together in a weird, weird way. People play Hooky from work, you know, people are cheering for teams that they have no idea where the college actually is. Yeah. We got into it this weekend, so it was fun to get out and cheer for some crazy teams with some crazy mascots and yeah, just, it's just kind of neat, fun living life. I don’t know. That's a, that's, that's what I got. It's a, it's my Pura Vida for this week. Uh, what, what would you like to hear and these kind of in this section here, what's, what's poor of Eaton mean for you? What is pure live in mean for you? Hit me up.
14:01 Okay. Thank you so much folks for listening. It's been a fun episode for me. I hope you actually got some mad of it. Oh my goodness. I'm Patrick King. Thanks for listening. And until next time, peace. Thank you for joining me today. To find out more and get access to my free financial resources visit, invest in your life, podcast.com
14:35 The thoughts and opinions expressed here are my own and or for general information only. They are not intended to be recommendations or specific advice for anybody. I'm not a doctor or a licensed therapist. So please consult with your healthcare provider if you had any issues regarding your physical or mental health. Any investment performance that's referenced here is historical and of course has no guarantee of future results. Last but not least, the Easter Bunny isn’t real.