What Really Matters in Your Life?

Regardless of how smart you are, your mental focus is limited to just a few things at one time. How do you know what’s worthy of attention? What should you ignore?

Perhaps the best way to discover what really matters in your life is to find out what doesn’t matter. While you might be all consumed worrying about near-term events, what happens this week or next month likely has little significance to you in the long-term. How these events impact your investments in the short run isn’t very important for your long-term financial future.

Many of the things you think really matter are actually things you can’t control. For instance, some clients over the past few months have expressed anxiety about inflation and whether the economy will tilt toward a recession. While these items might weigh heavily on you during the near term, you can’t control inflation or the performance of the broad economy. Instead, focus your attention on things where you can influence outcomes.

Start by attuning your mindset to the long-term instead of the short-term. Think about investment decisions as if you are an owner instead of a trader. If you can shift your attention away from the short-term mentality that dominates financial markets day to day, you have taken a big step toward placing your attention where it matters most.

The things that really matter most for your financial future can be traced directly to what you do, or don’t do, each day. How much you save and how well you behave are critically important for your future. Saving enhances your flexibility and provides a margin of error within your financial life. Staying in your seat and allowing time for your financial plan to work creates consistency.

The more that you focus on what really matters in your life, the more you differentiate yourself from everyone else. While other investors are busy trying to outguess the markets or predict the economy, you’re concentrating on your long-term plan.

Long-term thinking can be difficult. The average individual investor holds onto investments for only about six-months. That creates a trader’s mentality, not the perspective of an owner. Successful long-term investing in the stock market demands an owner’s mentality.

Human emotions can sometimes be more volatile than the markets at large. Stock prices necessarily fluctuate with changing economic conditions and company profits. In the short term, this volatility is much more about investor sentiment than the prospects of the particular companies.

Related: What Time It Is Within Your Financial Life?