At Oberdorfer Financial, we believe your money should always be on a mission.
We can use different mindsets for different conditions
There are a number of personality types. One type is the transactional individual. A highly transactional person seeks mostly transactional relationships and interactions. And they seek out “the process” because they like to understand a system or a network and leverage it. Like many things, this is a spectrum. Some people are somewhat transactional and some are purely transactional. A transactional personality leads to a transactional mindset. Typically, a transactional mindset means you are looking for something in return. This for that.
There are pros and cons to transactional mentalities and relationships. Perhaps you are not very transactional, but you have a transactional relationship with someone. For instance, “When Mike and I get together, we drink a coffee and talk about sports.” It’s a true friendship, but it’s transactional. So just because an individual’s personality, or a particular relationship, is a this-for-that one doesn’t make it good or bad. It is what it is.
But if you were in a sales position, you would be wise to add transactional skills.
Beware though: If you are not a transactional person naturally, then there is a certain amount of friction that occurs when you act transactionally. Decide if that’s okay for you.
You’re almost certainly adding skills and participating in the workplace in ways that create some friction for you already. When there’s too much friction though, you want to quit your job or change your field. But having a transactional skill set can be valuable when under the right conditions. Most times people think of personalities as set, and that may be correct. But you can certainly add skills that transactional people naturally have.
So what’s “The Investor Mindset” then?
The Investor Mindset, briefly, is what investor-types use. You may already know the people in your life that think and act like investors naturally. Some of their characteristics are: analytical, delayed gratification and thinking long, re-investing, builders or curators, value-measurers, value-adders.
These are pretty positive characteristics. Again, like many things, it is a spectrum. If you are so analytical that you cannot make a decision, that is bad. You don’t want “paralysis by analysis,” as they say.
Another thing to watch out for is delaying gratification too much. Someone who overdoes this may become unhappy. Perhaps it is useful when managing money, but it isn’t great if you overuse it in your life. What if you never eat a cookie? It sounds funny when talking about cookies, but be careful about persistently delaying gratification. Discipline is great, but find appropriate treats for yourself too along your journey.
So whether the previously described investor characteristics come naturally to you or not, you want to treat it like a skill, and use it when appropriate.
At Arena Investor we use “The Investor Mindset” to help us perform our jobs well serving financial planning and investment management clients, as well as providing financial education.
Simply put, The Investor Mindset treats almost everything like a portfolio and only things that make that portfolio better should go in it. At Arena Investor this can mean: stocks, crypto, ETFs, mutual funds, bonds, real estate and so on.
But The Investor Mindset can be used at large too – well beyond finances. For instance, it can also apply to nutrition, fitness, friendship, your subscription TV “watch later” list, and on and on. Investor-types don’t naturally take-on things that don’t make their portfolio better. At a minimum, they try to decide if it is on-par with what they already like, or better. If it is sub-par then good luck talking them into doing it.
A Lot of People Can Relate to This Already
Believe it or not, a lot of people can relate to this as sports fans. Good luck convincing a Cleveland Browns fan that the Arizona Cardinals vs the Seattle Seahawks fits their “entertainment portfolio.” They may watch because they like football at large, but they aren’t truly invested in that game. It isn’t as good or better than their AFC North matchups against the Pittsburgh Steelers, Cincinnati Bengals, or Baltimore Ravens. They believe those matchups do make their entertainment portfolio better though.
The suggestion is this:Add “The Investor Mindset” to your life. You don’t have to re-create yourself and try to be someone you’re not though. Simply start to see the world with Investor-tinted glass a bit more each day.
It can help you get started as an investor too
Perhaps you’ve wanted to invest for a long time now. But you are afraid to get started. With The Investor Mindset realize that an empty portfolio would be made better with one quality company in it.
Now you’ve started.
And you’ve used The Investor Mindset – you upgraded your portfolio!
Do that a second time, and continue until you are diversified.
Remember: You only want to put stocks into your portfolio that make it better. So say you want to build a portfolio of 10 stocks. Well at the beginning you are really just laying a foundation. Don’t lay a crappy foundation.
If you wouldn’t leave the portfolio alone for 5 years and be happy with your picks with minimal intervention (say, less than once per quarter), then do not add that stock.
But remember, while we say stock we really mean company. You should be happy with the company you pick for 5+ years. You should believe in it, the work it does, the role it plays, and be able to sleep at night. That way, you will get through the ups and downs that The Business Cycle (here) intrinsically experiences.
Be sure to think long when you build the foundation. You wouldn’t swap out parts of your foundation every day, week, or month would you? Perhaps over time you make an upgrade though because it makes sense.
“The Investor Mindset” is large and encompassing. So is a transactional mindset. But you can use the skills that naturally come with those mindsets to your advantage. And you don’t have to become a different person to do it. Pick something in your life to try out The Investor Mindset on. At the start of the new year health and wealth are at the top of many people’s minds already. Maybe choose one of those. Nutrition is a great way to add it to your life: Does this thing I’m about to eat or drink make my body-portfolio better or worse?
Note: There’s a key difference with nutrition though in that a splurge for an hour on a Friday night isn’t as long-lasting as a financial splurge or investing splurge – that money is spent indefinitely.
Thank you for your continued trust in Oberdorfer Financial.
Truly,
The Oberdorfer Financial Team
At Oberdorfer Financial, we help The Ones in The Arena — hardworking men, women, and owners of America. Together, we’ll keep your Money on a Mission.
Schedule a Discovery Meeting here to learn more.
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