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June 07, 2006
Focus on outcomes - not numbers
I often write about the similarities between dieting and investing. As dieters, we focus on our weight. We get on the scale each morning to see if the number has changed. I did it this morning. It has - in the wrong direction.
In investing too, we focus on the numbers. We check our stock prices each day to see if they have gone up or down. We measure our account balances each month and each year. We calculate our annualized return numbers. In fact, as investors, we are kind of obsessed with "the numbers".
I think we should think about outcomes instead of numbers. As a dieter, a far healthier approach is to focus on looking better in those tight jeans. Better yet, focus on knowing you will live longer and get to see your grandchildren grow up.
The same is true with investing. The desired outcome isn't a number - it's getting to live a comfortable retirement, whatever that means for you. It is knowing that you will have sufficient income to meet your needs no matter what. Maybe it is having enough surplus to play golf every day, travel around the world, or put a needy kid through college.
By focusing on outcomes we go from micro-managing to macro-managing. We are no longer trying to invest for money's own sake but rather to achieve a beneficial outcome. We are visualizing an end result in our head that we are far more likely to make real. Give it a try.
As always, I'd love to get some input from you. How do you define your success as an investor? What is the purpose behind your investing? What outcomes would you like to make real? Leave your thoughts and comments below - and for some examples of outcomes achieved by our Snider Method investors, be sure to visit our Bora Bora blog where we post their letters, pictures and postcards.
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
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Focus of This Blog
Kim Snider is an author, speaker and host of Financial Success Coaching, Saturdays at noon, on KRLD Newsradio 1080, Dallas - Fort Worth. This blog is primarily devoted to empowering individual investors with information to help them be good stewards of their money. Above all, it is about achieving true financial success. Kim's book, How To Be the Family CFO: Four Simple Steps to Put Your Financial House in Order is in bookstores now. Order yours from Amazon or other fine booksellers today.
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