Real Estate Investor Magazine South Africa November 2014 | Page 66
LESSONS
BY Vangile Makwakwa
How to Deal with
Financial Disappointment
Play the game of life
F
or the longest time my fear of disappointment
turned me into a spectator of life. I figured
out early on the way to never get hurt is to
never play the game of life. I learned it was safer to
play to lose instead, of playing to win.
Of course this had a negative impact on my
finances, let alone investments. Who wants to
experience the pain of losing money?
Impact on investment behaviour
According to Mellers (2001), our emotions - particularly
disappointment - about the outcome of a decision, have
the power to influence our decisions; people will make
decisions that help them avoid disappointment.
1. Procrastinating on financial decisions
Procrastination on making financial decisions can also
stem from past disappointments that lead to action
paralysis in the present moment.
Dealing with disappointment
If you’re an investor, you will eventually experience
disappointment. That’s a fact. Things won’t always go the
way you envisioned and you’ll need to know how to deal
with disappointment.
1. Detach from the outcome
When you detach from outcome you accept that the only
person you can control is you. You can control the actions
you take, but you can’t control the market, because that
depends on so many variables, most of which are out of
your control.
2. Have a plan B
As soon as you make the decision to do something ask
yourself these 2 questions:
2. Risk-averse investment
• What’s the worst that can happen if this doesn’t go as
planned?
• What other actions can I take?
Research shows that disappointment makes people risk
averse. To protect yourself you invest in safe stock, save
more money, spend less and never take risks with your
career or business.
These questions help you plan for the worst but also help
you change your perspective if the outcome doesn’t go as
planned. Knowing that you have financial options can
make you feel empowered.
3. Become a miser
3. Separate the facts from the story
You’re more focused on saving than investing. Your fear
of money outweighs your desire to make money. If you
made a lot of money in the past, lost it and experienced a
lot of disappointment because of the loss, you’ll make the
decision never to experience disappointment again by
holding onto money more tightly.
Understand that your interpretation of the facts is what
leads to disappointment. The more you refuse to accept the
facts as they are, the more disappointed you’ll feel.
4. Increased debt
Continuous disappointment about money can leave us
feeling hopeless, like nothing will ever work out, which
demotivates us from budgeting or taking constructive
financial action.
66
November 2014 SA Real Estate Investor
I’ve come to understand that it’s not life’s events
that hurt us, but the way that we choose to
interpret these events. Life just happens - it’s when
we believe it should unfold differently that we feel
disappointed.
RESOURCES
Wealthy-money.com
www.reimag.co.za