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February 20, 2008
Shaped Skis and Cash Flow Investing
I have been skiing as many years as most of you have been investing - almost 40 years. I may not be the best skier on the mountain but I have always taken pride in my proficiency on skis.
After decades of skiing on long, stiff, straight boards, ski technology has shifted dramatically. Now everyone skis on short, supple, shaped skis. These new skis require you to ski differently than we did in the old days. In fact, everything is almost the exact opposite. To ski well on the new skis, I have to unlearn a lot of years of skiing.
Us old-timers learned to ski with our knees together. On the new skis you ski with your legs apart. On the old long boards, you weighted and unweighted your skis with one sliding in front of the other to turn. Now you turn both skis at the same time by applying the slightest amount of pressure with your big toe to the inside edge of the ski. Skiing the old way, your weight was all on one leg. Now you put weight on both skis. And here is the one that really screws me up - now I lean to the right to turn left and visa versa!
The overwhelming temptation is to stick with what I know. Why try to learn this new way of skiing? After all, I have gotten this far with the old way, right?
In a nutshell, it is because the new way is better. More accurately the new way is more appropriate, given my objectives, which are to be able to ski all different types of terrain with minimal energy expended and the least chance of bodily injury.
These were not my major concerns when I was younger. My objectives have changed and so too must my style of skiing.
So, here I
am, in Squaw Valley, taking a few days vacation after a convention in San
Francisco. I finally broke down, after several years of resistance, and took a
lesson on how to ski the new way. Let me just tell you … I hate it.
Now I know how investors feel when they switch from the old capital appreciation model to this new-fangled way of cash flow investing. The old way was comfortable. This way I feel totally awkward. Every time the instructor tells me to lean left to turn right, my brain revolts! It feels similar to the sensation of trying to pat your head and rub your stomach at the same time. I get angry. At him? At me? I am not sure - maybe both.
The easy thing to do would be to go back to the old way. But I can't. I am determined to push through this initial awkward stage. No doubt about it, it's going to take awhile.
Some people have a natural sense of where their body is in space and can make physical adjustments quickly and easily. I have never been one of those people. I have to work at it - just like some of our investors instantly "get it" and others struggle before the light bulb finally goes off.
But why? Why do I have to make this change? Because in a logical moment I realized the new way was better suited to what I was trying to accomplish.
I am older now and no longer have the benefit of a young body - just as an older investor no longer has the benefit of time. Now I enjoy being able to cover maximum terrain with minimum effort - just as our investors want maximum results with minimal risk. The new way lets the skis do all the work instead of me - just as our way is about making your money work harder so you don't have to. And most importantly, the new way allows me to safely navigate difficult terrain because I am skiing on a more stable platform - just as our investors want/need a platform to navigate difficult markets.
So, in spite of the fact that I felt like an out of control beginner today, I will stick with it. I have to trust. I know, eventually, this too will feel natural. In the meantime, my logical brain will just have to drag my lizard brain along.
Kim Snider Financial Communications makes 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. Individual results may vary.
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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