My Friend Anna is a Dummy

One day Alice came to a fork in the road and saw a Cheshire cat in a tree. “Which road do I take?” she asked.

“Where do you want to go?” Was his response.

“I don’t know.” Alice answered.

“Then, it really doesn’t matter which way you go.” Said the cat.

Figuring out the forks in the road is hard work, but it pays off when you reach a desired destination. Always start with the end in mind. Take a good look at what your goal is and then survey what tools and experience you’ll need to get there.

I have this friend, let’s call her ‘Anna’. You may have a friend like her as well. Anna is a few years older than me and is a very talented, creative and intelligent person- except when it comes to making decisions about money. Anna is in her early 40’s, tall confidant and (sometimes) happily single.

She has become a well-established artist working out of her own studio in Seattle. If you went shopping with her for paints or brushes, you’d see her in meticulously fine form. She’s able to select the best oil or acrylic for her brush based on the colours, feel and texture that she’s looking to achieve. She knows which colours have been blended with fish scales and which have been blended with clays. She talks about flow consistency of the brush and viscosity of fluids. See, Anna has learned to become ‘intuitive’ with her art.

She is an expert when it comes to painting. I say learned because Anna wasn’t always that way. She bounced back and forth from medium to medium. At times a talented professional cook, at other times a well-paid advertisement designer. Even though she pulls in a good salary from selling her paintings, she still has to sell them to eat, if you know what I mean: Anna is still stuck in the rat race of working for a pay cheque.

Generally a pretty relaxed person, I was always surprised to see the Jekyll and Hyde transformation of Anna when the subject of finances came up. She became visually overwrought with emotion and that led her to a state of analysis paralysis or something even worse… failing to check the numbers and rushing into a bad deal. I remember getting one late night call from Anna asking for advice. I strained to hear her tiny, far away voice all sugary and hyped up.

She was trying to decide between some stock she heard was at a great price or a must have time-share/investment kind-of-thing in Mexico- ‘that would make a lot of money’. I asked if she’d analyzed the details to which she sweetly replied ‘no’. Under the cold light of day both ‘investments’ soon disintegrated.

Probably in these two cases analysis paralysis was a good thing. But what about when a good deal does come along and she fails to act? Anna is at a stage of her life where she has to give serious thought to her finances, whether that is fun for her or not. Even if she doesn’t want to do it herself she needs to find someone that she can trust to guide her.

Because Anna didn’t have a clear financial target she often found herself swayed by emotion and the pressure of knowing that she needed to invest. She’d read a few books to make her interested enough, and also a little scared. Realizing her lack of knowledge, or fear (False Evidence Appearing Real) she succumbed to the position of analysis paralysis or lack of doing anything, and that can be deadly.

I’m happy to report that Anna has since defined her goals, committed to an investment plan that is specific to her needs and has gotten into action and made several sound investments. Anna chose to focus mainly on two asset classes and refrain from ping-ponging about into unknown territory. She matched herself with an investment style where she could leverage her money further; receive passive income, yet still remain ‘hands free’. She is now able to focus on what she loves and does the best and has the peace of mind that she is in action.