Welcome to this month’s newsletter.
I’d like to talk about something that can be hidden from our conscious thinking, but which may ultimately define the outcome of our actions, (including the outcome of our investments). That "something" is a hidden assumption or decision we’ve made without ever consciously recognising we made it.
Confused? Let me explain.
Let me use the mortgage industry as an example, as I have worked with a lot of mortgage brokers in the industry over the past decade and know the market fairly well.
- I have seen mortgage brokers with virtually identical experience working in exactly the same environment and witnessed only a small percentage of them doing very well, while the rest struggle to keep their sales up.
- I have noticed that one of the main differences between them is that the struggling mortgage brokers are not necessarily less skilful, but they have somehow decided that their business is being affected because "lenders are being difficult right now, or all our valuations are coming in low, or the quality of our clients is bad, etc".
- Of course these brokers didn’t come to these decisions without some factual basis. Like most professionals, they started their careers with high hopes that things would work out fine for them. But over the years they have run into a number of challenging situations and gradually they started to make "hidden decisions" that things just can’t be done easily in the mortgage industry.
- The challenging bit to realise is that once these struggling mortgage brokers make up their mind about how hard things are for them, they tend to attract situations that confirm "lenders are being difficult right now, or all our valuations are coming in low, or the quality of our clients is bad, etc". This phenomenon seems to be a simple survival mechanism for our minds that asserts our need to be right in our conclusions, regardless of what it may cost us.
- Generally I have found that the mortgage brokers who are doing well are usually either newcomers to the industry who have yet to make these "decisions", or are top performing mortgage brokers who refuse to let the environment change their assumptions or operating basis.
- It is also almost impossible to convince a struggling mortgage broker to see that the problems actually come from themselves, not the environment. This is because the survival mechanism of their mind refuses to let them look at the fact that there are other mortgage brokers out there doing very well under the same circumstances.
- The end result is that these struggling mortgage brokers tend to have a miserable career from the day they start making these "assumptions", and no one in the world can save them – apart from themselves.
As I certainly don’t want to seem like I’m having a go at mortgage brokers I can assure you the phenomenon doesn’t just happen to them. It can happen to just about anyone in any industry, for example:
- A financial planner who started out with good sales conversions for a while then began to go downhill until they now remain stuck at a miserable level;
- A property consultant or real estate agent who started out with good sales volume but then began to go downhill until they now remain stuck at a miserable level;
- An individual performer such as a presenter or a singer, who started out with large audiences but then began to go downhill until they now remain stuck at a miserable level;
- A boss, leader or manager who started out with strong leadership and a goal to grow the size of their organization, then began to go downhill until they now remain stuck at a miserable level;
- A marketer who started out with lots of generated leads but then began to go downhill until they now remain stuck at a miserable level;
- A partner or spouse who started out with a strong relationship then began to go downhill until they now remain stuck at a miserable level;
- A share trader or a property investor who started out with a strong performance then began to go downhill until they now remain stuck at a miserable level;
I hope that, as you have been reading this, that you may have observed a pattern here with regard to the 2 Stages of any activity in life:
- Stage 1: at the beginning, we all start out hopeful. We often have hidden assumptions about how things can be done, and that they can be done easily. Interestingly enough, we discover that more things can be done easily than not during this period. In fact, during this period, we may find it hard to understand why the majority of people in our industry are not doing what we’re doing so successfully and we feel very good about ourselves.
- Stage 2: Somewhere along the process, we are hit with problems and disappointments as we get more "experience". These challenges somehow reshape our hidden assumptions without us really recognising this process going on. There is a point where we start deciding that "things just can’t be done, or can’t be done that easily" and we start accepting a lower quality reality. Interestingly enough, things then become a lot harder to get done and the environment becomes a lot harder to handle. This is the point of no return for most people. They simply start going downhill from here.
If we measure the above 2 Stages by both mindset and experience, we can say:
- Stage 1: we have a better mindset + LESS experience;
- Stage 2: we have a worse mindset + MORE experience;
Comparing these 2 Stages, we find Stage 1 often delivers a better outcome even with less experience.
Just about everybody goes through these 2 Stages in this sequence and ends up getting stuck at Stage 2. For everyone who has experienced this I would suggest moving to the next and final Stage:
- Stage 3: we have a better mindset AND more experience;
In whatever we do, we will get more experience whether we like it or not. The key here is not to let your negative experiences affect your mindset. For example:
- As a mortgage broker:
- Regardless of how many times the lenders are difficult, try to focus on the times that lenders did give you a speedy approval, and remain optimistic that this will be the case for your next application;
- Regardless of how many times a valuation comes in low, try to focus on the times that the valuers did give your clients a good valuation, and remain optimistic that this will be the case for your next valuation;
- Regardless of how many times you run into clients who do not qualify for a loan, try to focus on the times you dealt with top quality clients, and remain optimistic that the next client will be a good quality one;
- As a financial planner, regardless of how many clients say NO to your service or don’t appreciate your advice, try to focus on those times when your clients did say YES to your service and really appreciated your help, and remain optimistic that this will be the case for your next appointment;
- As a property consultant or real estate agent, regardless of how many potential buyers say NO to the properties you offer them, you focus on the times when your prospects said YES to your properties or liked your properties, and remain optimistic that this will be the case for your next prospect;
- As an individual performer, such as a presenter or singer, regardless of how many people dislike your performance, try to focus on the ones that do like your performance, and remain optimistic that your next audience will also like your performance;
- As a boss, leader or manager, regardless of how many people may have deserted you as a leader, you focus on the people who still stay with you, and remain hopeful that the next person you hire will stay with you;
- As a spouse or partner, regardless of how many disappointments you may have experienced from the other person, you focus on the unexpected good things that the other person has done for you, and remain optimistic that it will happen again next time;
- As a marketer, regardless of how many failed attempts you have made to generate leads, you focus on the times you did successfully generate more leads than you expected, and remain optimistic that your next marketing campaign is going to be a great success;
- As a share trader or a property investor, regardless of how many times you have lost money, you focus on the times you made good money, and remain optimistic that this will happen again next time.
When I say focus on what can be done and remain hopeful, I don’t mean that you don’t try to improve your experience and knowledge. But no amount of experience and knowledge will improve your result if you have already decided deep down that something is not going to work. In fact, if you have already made a hidden decision that something can’t be done, it is unlikely you will seek to improve your knowledge and experience to make it happen anyway. So a better mindset can be more important, as it tends to determine what knowledge and experience you are going to have, hence what outcome you will end up getting.
To help you overcome this invisible barrier, I would like to help you bring your own hidden assumptions to the surface so that you can deal with them directly:
- If you are a mortgage broker, have you already decided in your mind before you see your next client that the lenders are going to be difficult, the valuations low, or good quality clients are just too hard to come by?
- If you are a financial planner, have you already decided in your mind that people are not going to find your service valuable, or the investment market is tough, or people just don’t like financial planners?
- If you are a property consultant or real estate agent, have you already decided in your mind that your properties are not good enough, or the property market is tough, or people are just not ready to buy now, or people just don’t like property sales people?
- If you are an individual performer such as a presenter or a singer, have you already decided that you may not be able to impress your audience, or the economy is bad, or people are sick of seeing you already?
- If you are a marketer, have you already decided that marketing is mostly a waste of money, or marketing is not going to generate immediately convertible leads, or people are going to ignore most marketing messages anyway?
- As a boss, leader or manager, have you already decided that your people are not going to be loyal and trustworthy, or that people are always difficult to manage, or that you are not good enough as a boss, leader or manager, or people will find you difficult and unpleasant to follow?
- As a partner or spouse, have you already decided that you are always going to be disappointed, or that you are the one who has to make the relationship work, or you can’t make the other person happy, or the other person owes you a lot?
- As a share trader or property investor, have you already decided that it is too hard to pick the winner, or that you are not very good at investment decisions, or your investment is not going to perform well because of the market, or all investment advisors are there to make money for themselves instead of looking after a client’s interests?
Just remember this, whatever you have already decided, especially if it was "decided" without you consciously realising it, your decisions will tend to reflect your current reality. In other words, if your current reality is showing you certain unpleasant outcomes, the chance is that you may have decided unconsciously at some point that this would be the outcome. Remember the outcome doesn’t lie, it tells the truth about what you have already decided, regardless of what you may be telling yourself or other people.
For example, if you discover that in your reality money is very hard to come by, the chance is that you have already decided unconsciously at some point in your life, that money is hard to come by. Once that hidden decision is made, you will find enough evidence in the world to confirm your decision, and eventually it will become a conviction that you will almost have to kill your identity to change that belief as it threatens the very survival of your mind and personality. You may have made such a hidden decision when you were little while growing up in a family that money was hard to come by, it will take enormous courage and good fortune for you to mix yourself in an environment where money is easy to come by for you to be reborn into a new identity that money is easy to come by.
A good test to see if you have the courage to change this hidden decision "money is hard to come by" is to examine your own reaction towards people who have managed to make large sums of money effortlessly: do you suspect they have done something wrong, or are just luckier than you, or are you upset that it didn’t happen to you? Or are you simply just happy for them and believe that you will be next?
The way you react speaks volumes about the hidden decisions you may have already made.
Until next month, happy investing.