Bright Shiny Object Syndrome
The focus of many individuals I meet with for the first time is in several different directions. They engage in what is known as “bright shiny object syndrome”.
Bright shiny object syndrome refers to the phenomenon of allowing focus to wander away from the necessary, yet potentially less exciting task at hand to anything that glitters enough to capture and divert attention.
The simplest example of this is a teenager studying for his science exam in school tomorrow with the television set on and a remote control in his hand!
ESPN’s Top 10 Plays of the Week quickly becomes the bright shiny object and his focus is diverted away from what he’s trying to accomplish.
The same can be said with all of us with the advent of the 24 hour news cycle, and minute by minute reporting of anything and everything. Our attention can so easily be diverted away from the big picture and what we’re ultimately trying to accomplish.
As we enter this New Year together, let’s take the opportunity to pause for a moment so we can begin to review and implement the fundamentals and principles of a Relaxing Retirement.
That begins by taking a giant step back and accurately assessing what the fundamental challenges and obstacles are that we’re dealing with. This is what Napolean Hill referred to as “accurate thinking”, i.e. stripping away all of the fluff and getting right to the heart of what we’re trying to accomplish.
My recommendation at the beginning of each year is to clearly identify the lifestyle you want, and then the challenges and obstacles you face in getting there.
The challenges and obstacles may very well be the same, but we all need the reinforcement to bring them to the forefront of our minds so our focus remains in the right place.
Let me give you a very simple, but critically important, example:
Challenge #1: “I don’t want to depend on the income from work anymore, so I need to generate income some other way.”
Challenge #2: “My lifestyle costs a lot more than my pension and social security incomes bring in. (i.e. I need $120,000 per year to do everything I want to do after paying income taxes, and my pension and social security only bring in $50,000)”
Challenge #3: “I need to create income from my retirement savings to support my lifestyle.”
Challenge #4: “I don’t have enough money saved to let it sit in bank CDs and earn only 1 to 2% interest.”
Challenge #5: “I need to earn better investment returns to keep pace with inflation and maintain my purchasing power so I don’t run out of money.”
Challenge #6: “In order to achieve the better investment returns I need, I have to position my retirement savings where it has an opportunity to earn better returns.”
Challenge #7: “Positioning my retirement savings where it has an opportunity to earn better returns subjects me to greater amounts of investment volatility.”
Challenge #8: “If my retirement savings doesn’t earn what I need, I will have to either make cutbacks in my lifestyle, or I will have to go back to work!”
This may all seem obvious, but most people who I meet with for the first time have no idea why they’re even investing in the first place, nor why they’re allocated the way they are.
In most cases, the reason they’re allocated the way they are is because Fund X seemed like a good fund, or it recently performed well!
This is extremely dangerous in its simplicity!
If you don’t begin by first identifying all the potential obstacles in your way to enjoying a Relaxing Retirement, you will join the overwhelming majority of Americans who tend to wander and focus on things that are potentially important, but completely out of context and inappropriate for their unique situation and circumstances.