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Are you searching for the next good idea?

Welcome to this month’s newsletter. This month, I would like share my views on why it seems so hard for us to make good use of old information we already know has produced results, and why instead we seem so keen to focus on looking for “new ideas” that have not yet been tested.

Very often we find ourselves searching for new ideas on how, when and what to invest in. Very few people seem capable of getting hold of one good idea and making it work to perfection before starting to look for and test out the next idea. Yet very often the people who can stick to the one good idea and make it work turn out to be the winners more often than not.

I have spent some time over the years observing this phenomenon, and have wondered why it seems to be against human nature to stick with using a good workable idea instead of constantly chasing new ones. Here are some of the potential reasons:

  • When we first find a workable idea, it has usually been working for someone else. (Providing of course that it’s not a lie). If it has not yet been tested in our own circumstances, it may not be the right fit for our strengths and weaknesses;

  • While we’re testing out this new idea, we are actually learning to adjust ourselves to become someone else in the hope that this idea may actually work for us. Common sense tells us that it is highly unusual that our personal characteristics and circumstances would be the same as the person who has made this idea workable for him or her, hence we may not achieve a very desirable outcome during this testing phase of such an idea;

  • Since the idea might not seem to work to our expectations during the initial testing phase, we may jump to the conclusion that this idea simply doesn’t work, or we have been deceived by this idea or the person who claims to have made this idea work;

  • Instead of refining our own circumstances and improving our own ability to make this idea work for us, most of us simply take the easier path of looking for another new idea, in the hope that the next idea will be easier or a better fit than this one;

  • After losing focus on the initial idea and partially moving on to the next idea, it is not hard to imagine the initial idea now has even less chance to work, which then reinforces our conclusion that perhaps the initial idea was a stupid one;

  • We then move fully into the testing phase of the second idea, which again has also worked for someone else. The cycle repeats itself until the second idea fades away and the third new one appears in the horizon.

For example, you may decide to start a pizza shop because your uncle has run a successful pizza shop. Then, after a few years hard work, your pizza shop doesn’t meet your expectation (which you most likely benchmark against your uncle’s pizza shop). You then start losing interest in your pizza shop and instead start looking for a cleaning business because your cousin has done well with one.

In this example, it is not too hard to see that you are not the same as your uncle. Even if your uncle came to run your shop in your location with your ownership structure and staff, possibly even he could fail in your pizza shop. But if you put your heart and soul into your pizza shop and continuously improve every little detail of your shop, you are likely to make it work. Then of course you wouldn’t need another idea like running a cleaning business.

Another rule of thumb is that regardless of how wonderful an idea may be, usually only 10% of people trying that idea are able to make it financially rewarding for them. 20% of people generally fail miserably at it and 70% get stuck at a break even point.

So unless you happen to be exceptionally talented with any particular idea or happen to have the right fit for it, most people need to work hard and stay very dedicated for a long time to become that top 10%. Hard work and dedication are not part of the mental preparation we do when we are looking for a new idea. Somehow we seem to think that a new idea means less work and faster results, but this is so far from the truth most of the time.

I have found that repeating the same thing over and over again, can often reveal new meanings to it and allow me to find new insights. For example, reading the same book again at different ages or attending the same seminar and workshop multiple times can reveal new understandings. The strangest thing I have done recently was watching one of my own presentations that I recorded many years ago. Watching it, I discovered I should have persisted with some of the things I said myself in those presentations.

I can almost say that out of the 10 different ways I know how to get a good financial return on property investing, I have gained the largest financial reward by just focussing on one or two of them and making them work to perfection. Experience has taught me that this works better than spreading my energy and resources across the whole 10 different ways in the hope of some of them may work for me.

For example, some of the ‘old ideas’ that we may not have perfected yet:

  • Managing our expenses well;

  • Improving our income;

  • Investing whenever we can safely do so;

  • Having a personal financial trainer to hold us accountable;

  • Educating ourselves financially;

  • Repeating what we know works;

  • Setting goals and following a plan;

  • Reviewing our finances regularly.

Pretty boring stuff, I know. But if we’re doing any of these at 70% of what we know as perfection, then improving 10% of these “old ideas” could dramatically improve our financially positions.

Until next month, happy investing.

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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
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