Are you a believer?
A bit of a different post today.
I just wanted to reflect why I don’t really believe in motivation. Humans are weird.
We apply shortcuts to things to give ourselves the least mental friction when undergoing tasks.
Whether this is going to the gym, studying, working, or doing the housework.
One of the biggest issues with this comes down to the fact that we are choosing sub-optimal routes to objectives.
At the time we think we are helping ourselves, but when it comes to a point further in time, we end up feeling an emotional pain for not doing a task correctly, or at the right time.
The bottom line here is that trying to get motivated to do things doesn’t work.
Motivation works in peaks and troughs.
Trying to get yourself motivated means that when something doesn’t work one day, you’ll get demotivated.
Or when you miss the gym one day, you’ll either feel like you’ve missed it and really want to go again the next day, or you’ll just start a cycle of not going again.
The same kind of thing occurs with money management.
If you don’t budget, you’ll have no idea where you’re spending incorrectly and you’ll find it tough to save or to invest.
If you’re spending £600 a month on eating out then wondering where it all goes, it’s because you’re taking short term gains over what you really want and what is a lot of people’s bigger desire – to have more capital.
This is one reason why I consider pounds to be points, rather than a useable ‘thing’. Play the game of ‘how can I keep increasing my score?’
The solution to all this is discipline.
You probably worked that out ages ago, and in trading you need a lot of it.
With discipline, you do things no matter what, not because you want to or don’t want to, but because you have to.
You’ve habitually forced it upon yourself to do the same things on a daily basis; whether it’s going to the gym, moving £20 into savings or reading four or five articles a day on something that you want to improve at.
In trading it comes down to having set rules and guidelines to follow.
A few I adhere to is 2% max risk, focus on two uncorrelated assets per week, and to record everything.
Alongside discipline, you need to be improving.
Consistently look for small gains to be able to improve in all activities that you do.
Small gains add up to very large overall increases in the end.