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If It Were Easy, Everyone Would Do It

This quote might sound familiar if you remember Tom Hanks, as the coach of a women’s professional baseball team, trying to pump up his players in “A League of Their Own.”

Whether striving to become a star player, inventing a thingamajig the world doesn’t yet know it needs, or writing hit songs, it’s not easy and not everyone could do it. In fact, not everyone wants to do it either.

Most times, attempting it is a real disaster – until you learn what you’re supposed to do, which is relatively easy, and then do what you’re supposed to do, which is surprisingly difficult. Many people just give up. Thankfully, unlike others, the Fab Four didn’t give up.

After an audition at Decca Records in January 1962, the label rejected The Beatles. Record company bigwigs said the band “would never make it on the charts” and “have no future in show business.” What The Beatles had in common with some notables is what many people today haven’t yet learned to use effectively. And that is self-discipline.

Create Self-discipline: Start Each Day With a Completed Task

Self-discipline is the learned practice of continually pursuing an objective despite the effort required, the obstacles to overcome, and the temptations to pursue a less difficult target, often the single critical influence in ultimate outcomes. Admiral William H. McCraven (U.S. Navy Retired) and former Navy SEAL knows this firsthand.

As the author of “Make Your Bed: Little Things That Can Change Your Life … And Maybe The World,” McCraven writes, “If you want to change the world, start off by making your bed.”

“It was expected of me. It was my first task of the day,” he writes. “Doing it right was important. It showed my attention to detail, and at the end of the day it was a reminder that I had done something well, to be proud of, no matter how small the task.”

Making his bed demonstrated his self-discipline, not his willpower, often confused because willpower is a concentration of force in which you choose your objective, create a plan of attack and then execute. It is a function of one’s genetics, planning, preferences and financial status.

Self-discipline is learned, structured, consistent and strengthened through practice. It is not so much the exercise of self-control, but the consequence of reduced levels of temptation, especially the temptation to say no.

Whether you’re Admiral McCraven or Average Guy Joe, doing what you’re supposed to do all the time is surprisingly hard, because we can be our own worst enemies.

An Investing Discipline

While some YouTube hosts suggest removing discipline from saving and investing, younger investors should keep in mind that developing an investing discipline, like self-discipline, matters. Think about it. What else allows you to stay focused on your goals ­– assuming you know what they are. Certainly, the advice here is to know your goals.

Investing discipline, like self-discipline, is also about making wise and informed choices. All assets have risk and you want to minimize that risk. Overreaction and short-term thinking can veer your strategy off target. When you remove the emotion, not the discipline, you won’t react to the market when it goes on a tear. So, isn’t it better to be informed and focused on a forward-looking market, and not on the day-to-day movements in the market?

“If you really want to be a disciplined investor, study what others are doing and create a game plan that allows you to remain steady for decades to come,” says Larry Alton, for Inc.com. Discipline makes for more intelligent and motivated investors.

You can teach yourself not to look at your portfolio throughout the day and night. Investors who obsess over their portfolios tend to trade more frequently, thus increasing the costs of the portfolio and the probability of making mistakes. Many of the best investors have long holdings periods and make very few changes. They “stay the course.”

A Key to Building Wealth

Self-discipline is key to building wealth. With self-discipline, you can monitor your own behavior, overcome disappointment, achieve goals and embrace life. Short-term forecasts are a waste of time and effort, and, generally, most people are over-confident in their views and forecasts anyway. Short-term thinking can lead to poor outcomes. Planning for your future comes from the steps you take now, in your peak earning years.

In 2022, for example, employees under the age of 50 can contribute up to $20,500 to their 401(k), an increase of $1,000 from 2021. The catch-up contribution for ages 50 and older remains at $6,500, for a total contribution limit of $27,000. The combined total employer and employee contributions cannot exceed $61,000 for the year, and $67,500 for those employees aged 50 and older. With averaged annual market returns of close to 10%, the magic of compounding has been working harder for you than ever before.

And then, in the second year that $1,100 at 10% nets you $110 and so on? This is how you build wealth for the future.

However, without disciplined emotional control, and not working with a financial advisor, investors may buy dangerously speculative investments due to fear of missing out, and also sell these investments at the worst possible times due to the panic imposed by market downturns. This is not how you build wealth for the future.

If you need a clearer direction, or a second opinion on your portfolio and where you want to see it go, contact us here at Hefren-Tillotson today. We would be glad to help.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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