Are you an "over-thinker"?

I was thinking today about the (many) reasons why women (and men) don’t invest their money.  One of the most common is the feeling that you have to understand everything before you start.  This I think is particularly pervasive in women.  Whilst an analytical mind is an amazing thing, and asking questions is always the right thing to do, overanalyzing can be a dangerous habit, not just with money, but with life. Overthinking and overanalyzing is driven by uncertainty.  As Mel Robbins writes ‘collecting more data and noodling about every potential outcome might make you think you are advancing toward a goal when you’re really just spinning your wheels’.

Your future is essentially unknowable, but it's going to happen whether you prepare for it or not.

There is one essential thing that we need to understand about investing and planning, and that is the unknowability of the future.  We don’t know what the future holds.  We cannot be one hundred percent certain that the sun will come up tomorrow or that we will be around to see it.  But we can’t base our decisions on possibility.  We have to base them on probability whilst employing rationality.

investing and planning

History and probability tells us that the most likely course is that our lives will continue to get better.  I know it doesn’t always feel that way, but life today is more prosperous and safer than it has ever been before.  Whilst we must always be prepared for the ‘what if’s’; what if I lose my job, what if I fall sick – we can’t let those thoughts drive our decision-making.

What can we do instead?  Well, the first step is to take control.  Despite what you might think, you are always ready to start.  If somewhere along the road you make the wrong decision, you can alter the path.  Being so scared of making the wrong decision often means people make no decision at all.  You really don’t have to know all the answers, you just have to start.  Then you can figure it out as you go along.