Practice Makes Permanent

Natalie Merrill
March 15, 2016

Many situations in life, particularly those involving financial decisions, require an individual to be able to make decisions that could have significant lasting impacts. While decisions are frequently made instinctively on an emotional basis, there’s a more effective means by which to make the many choices you do.

At the 1st Global National Conference 2015, Doug Lennick, CEO and co-founder of think2perform, stressed the importance of managing oneself well in order to align the real with the ideal and remain consistent with one’s values. He reminded his audience members that moral intelligence and moral competence are two completely separate concepts — one can be morally intelligent and morally incompetent in the very same moment. Moral intelligence, Lennick said, is the underlying intelligence necessary to be effective in the practical application of behavioral finance.

Moral intelligence allows individuals the capacity to make decisions based on their values and what they know to be right. Lennick said that values-based decision making is more powerful than goals-based decision making and that this skill is a result of managing oneself well — in other words, being able to decide what to think and what to do, despite any emotions one may be feeling. He cites his alignment model, which helps a person to align the real self with the ideal self, to guide an individual to make decisions based on principles, values and beliefs rather than thoughts, emotions and actions.

“I’m going to align what I think and what I do, regardless of the emotions I’m experiencing, to achieve goals and honor the sense of purpose in a way consistent with values,” he said.

The important thing to remember, though, is that such behavior must be constant and repeated. People often make financial decisions solely based on their emotions, which tends to produce negative results. But, though Lennick said self-awareness is not a habit, if people continue to put these skills into practice, they are more likely to find success in multiple areas of their lives, particularly in their roles as financial services professionals.

“Practice makes permanent; practice does not make perfect,” Lennick said. “Whatever you repeatedly think, whatever you repeatedly do, gets wired into the habit center of your brain. And most of what you do today you do because you did. It took all of us as long as we are alive to be just like we are today. Now, if you practice this multiple times a day, you will make self-awareness in the moment a habit. That will profoundly change your decision making. You will then be managing yourself well, and you will be relating better with people and with money.”

Lennick advised the audience to pause multiple times throughout each day to ask a few simple questions:

  • What am I thinking?
  • Emotionally, how am I feeling?
  • What am I doing?

This practice will help a person assess his or her self-awareness, furthering the ability to manage oneself well on a consistent basis. After all, practice makes permanent, and being able to manage oneself well, according to Lennick, equips an individual to be able to function more capably in his or her career.

“Here’s the deal: Effective relationships with people and money are functions of effective management of oneself,” he said. “So, how effective we are at relating to money, how effective we are at relating to others, and how effective we are at influencing and leading others is a function of how effective we are at managing ourselves.”

This notion of managing oneself well and finding the alignment of the real and ideal eventually finds its way into the connection between health and wealth. Lennick said that as people mature, they become more interested in being healthy and want to align what they do with what they care about (their values). However, at the same time, financial stress tends to rise as people become more concerned with whether or not retirement is even a viable option for them anymore. He said that the increase of financial stress leads to a decrease in the ability to handle situations emotionally, thus causing irrational decision making to go up — which contributes to financial and physical health both suffering. However, advisors have the capability to be able to help prepare their clients for the certainty of uncertainty.

“Whatever happens to people, they will feel a little less stress if they know that they are financially prepared for it,” Lennick said. “As a behavioral financial advisor, you will be making a substantial difference. It sounds simple, but it isn’t always easy. Simple and easy are not synonyms. This is profoundly simple and very difficult. Practice makes permanent.”

For more information on Doug Lennick and insight into creating practical ways to apply the art and science of human behavior, you can visit think2perform.com.

 

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1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 12750 Merit Drive, Suite 1200 in Dallas, Texas 75251; 214-294-5000. Additional information about 1st Global is available via the Internet at www.1stGlobal.com.