As humans whether we want to admit it or not we are emotional creatures as such
at times we let our emotions get the best of us like when we blurt out I love
you after two weeks of dating or when we find ourselves ordering a large pizza to
ourselves at three in the morning fortunately or unfortunately our
emotions often do seep into our financial lives and can lead to a host
of different results with some being more favorable than others luckily when
you use the following money trick that only one percent of people know you'll
be able to use your emotions to elevate your financial life to brand new heights
and if you're new to the channel then hit the Subscribe button below for more
life-changing content have you ever thought about why people are so
emotionally attached to their money it's easy to understand why a parent would be
emotionally attached to their child or why we would care about a longtime
friend but for years I simply couldn't figure out why we held dirty crumpled
pieces of paper to such a high regard then one day it hit me it wasn't the
actual money that people hesitated apart with but it was the knowledge of how
much time they had to give up to get that money that was holding them back
it's easy to get emotional about money because for most people they are trading
away precious days of their lives to obtain it and this time can never be
recovered as such when you ask a friend for twenty dollars you're really asking
them to give you a small fraction of their life now what does any of this
have to do with living a better Financial life surprisingly a ton when
you start to understand how emotions tie into our financial decisions you'll
start to realize that making Financial progression isn't simply about the
numbers and as a CPA that's human means a lot you see there are really two
approaches one can take with money the reasonable route and the rational route
let me explain what both entail and then we'll share some examples how the two
can be manipulated to allow you to live the best financial life possible when
you think about being reasonable you probably think of making compromises for
instance being reasonable is eating two slices of pizza even if you wanted to
eat the whole damn thing alternatively being reasonable can mean accepting a
five percent raise at work even though you would have prefer to doubling your
salary Instead This is called being reasonable and we do it all the time
then there's being rational for CPA robots like myself this is rather easy
to do but for most taking our emotions out of our lives and making decisions
simply based on the best perceived outcomes is hard for instance I get a
4am every day yes even on the weekends and eat the same meals seven days a week
while this is not the most fun way to live it is the most rational approach I
can take in order to meet my day-to-day goals of staying in shape and growing my
businesses when you act rationally it's about results first and feeling second
now that you understand a bit more about being reasonable versus rational you may
think that the latter is the best approach to take if financial success is
a priority to you I know that for many years I strictly adhere to the rational
approach when making financial decisions however as I've gotten a bit older I've
found that The Sweet Spot lives in the middle of the two being overly
reasonable while undoubtedly slow down your path to financial success as you
let your emotions be your financial GPS however being overly rational can impact
your day-to-day happiness which is a cost that must be factored into any
important financial decision as such reasonability and rationality are key to
proper financial wellness and here are four situations where these two
important Financial factors have to be in Balance the first application
reasonableness versus rationality comes when making the highly controversial
decision of deciding whether you should pay down your mortgage or invest your
money instead on the surface the decision at which to choose may seem
rather straightforward if the returns you can achieve when investing will
exceed the cost of your mortgage then investing is the right way to go this is
the rational route and is generally the one that is advised however we are
robots and like I said earlier when making financial decisions emotions do
come into play for instance maybe you've always had the dream of being debt free
by 40 and the last that you have to knock off your list is what's left to
pay on your home alternatively maybe having a mortgage is a major stressor in
your life that keeps you up at night worrying about how you'll pay it off if
you lose your job or fall Bond health issues in the future these sentiments
when experience start to detract us from the rational route and make the thought
of a less financially beneficial ones much more appealing because of this we
see a ton of people paying down their mortgages even though they could get
better returns elsewhere in short your financial decisions aren't just about
how they impact your wealth but how they impact how you feel speaking of how you
feel versus the impacts your decisions have on your wealth next let's talk
about your job it's funny because whenever we think about our jobs we tend
to focus on things like our salary benefits and how much time we can spend
in Mexico every year based on the time off we've been allotted in short we put
a lot of focus on compensation however if you've ever changed jobs for one
that's higher paying you'll know that after one or two paychecks it all feels
the same everything is the same except for the job itself as I've gone through
my career I've really started to gain an appreciation for how important being
fulfilled by your work truly is let's face it we spend a gross amount of our
lives at work and unless you want to be perpetually unhappy then finding a job
that puts a smile on your face is key this notion right here is where
reasonability and rationality come into play rationally speaking if one wanted
to get ahead financially they would never turn down an opportunity to make
the most amount of money possible however that high paying job might come
with insane work hours a ton of stress and doing work that doesn't feed your
soul when this takes place sure you're still taking a rational Choice from a
financial perspective but reasonability definitely deserves a place in this
discussion for example one could easily argue that it's more reasonable to take
a job that pays a little less but meets many of of your other life's needs such
things can include proper work-life balance a great group of colleagues and
more value-aligned work now I know that some people are still going to insist
that you should always take the job that pays you the most well I haven't been
working as long as many others I can tell you that taking a job you
thoroughly enjoys is actually a hack to getting ahead why is this because in my
experience and from serving numerous others that can tell you that when you
do work you dislike your heart will never be in the hundred percent instead
you will do the work just to get it done but never to the degree that will have
you standing out as such climbing higher up the organizational totem pole will
prove to be a challenge whereas in a job you love this client will be much more
likely to take place continue on the topic of jobs the sad realities that
numerous people aren't thrilled with their jobs in fact a 2021 Gallup poll
found that only 32 percent of workers are completely satisfied with their jobs
and asked my exes and they will tell you that being left unsatisfied is not a
good feeling to deal with on a regular day-to-day basis so what do you do if
you dislike your job well you really only have three options the first is to
win the lottery the second is to try and find a job you like in the third to
strive to retire as quickly as you can from the gross we continue to see in the
financial Independence retire of the community it definitely appears the
retiring early has become the chosen path for many and once again this life
choice brings reasonability and rationality into the picture when it
comes to rationality the rational choices deliver as cheaply as possible
in order to streamline your way to early retirement in many cases we see aspiring
early retirees living in cramped Apartments eating ramen noodles three
times a day and deferring their dreamifications until after they've
retired now there's no doubt that these financial decisions are the most
rational approach to saving every penny you can in order to retire early but is
it reasonable not a chance as I've grown a bit older I've come to realize that
there's a time for everything in life for instance when I was a teenager it
was a perfect time to spend endless hours night gaming whereas at 30 I
simply no longer have the time alternatively as I've aged those couple
drinks I used to be able to handle with these now leave me with a pounding
headache that no amount of Advil can fix the sentiment that there's a time and
place for everything in life is also true as it pertains to your money sure
you can try and stash away every cent early on in life but what are you giving
up to do so are you missing out on night so with friends that won't be possible
once you all have kids are you making your dates watch it blank TV because
you're trying to say that ten dollars would cost you to have Netflix as you
can see once again it's okay to be reasonable for being strictly rational
sure you may have to work an extra year or two but knowing you made the most of
your years leading up to that point will be worth the extra days behind your desk
now the final example of balancing rationality and reasonability pertains
to investing we all want to get the best Returns on our investments but the
question we must ask ourselves is at what cost anyone can YOLO into a penny
stock and hope for the best but not only are you risking the money you've put
forward but you're likely to develop hypertension in the process as such when
analyzing which Investments to pursue rationality or the maximization of
results may not be your best bet as a long-term investor I know for myself
personally I tend to stay away from single Stock Investing altogether
besides the large time investment into properly researching individual stocks I
simply don't like the volatility that most stocks experience and instead lean
towards a more Diversified investing approach hey it looked at YouTube thinks
this next video is the one that will change your financial life forever give
it a watch and let's see if they're right