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BAM Intelligence

Focus on the Opportunities, Not the Shoals

More than a decade ago, I learned how to kayak. I practiced in the pool a few times before deciding to test my skills on the river. For one of my first trips, my wife and I traveled to the Snake River just below Jackson Hole, Wyo. We planned to paddle a stretch of the river known as Alpine Canyon. A friend who happened to be a very experienced paddler joined us.

As we headed downriver, our friend reminded us to avoid focusing on the rocks or other obstacles in the water. He told us to focus on the space between the rocks instead. It didn’t take me long to figure out why. As we started down the river and hit the first rapid, my gazed locked on the rocks. So, of course, I hit one and flipped upside down.

It wasn’t pleasant. The shock of the cold water was different from being upside down in a swimming pool. I needed to figure out fast how to see the rocks without missing the spaces in between.

It took a lot of practice. Focusing on the rocks just felt more natural. They were the obstacle. How could I get around an obstacle if I didn’t look at it? The switch flipped for me when I realized the spaces were really opportunities. They offered a way around the rock that didn’t require taking a dip in icy cold water.

We experience a similar challenge when we try to navigate the financial world. The talking heads tend to talk the loudest about the obstacles we face because bad news sells. In 2013, an article on the content site Outbrain did an analysis of good news versus bad news headlines. It found “the average click-through rate on headlines with negative superlatives was a staggering 63 percent higher than that of their positive counterparts.”

It doesn’t surprise me that we pay so much attention to financial obstacles that might happen. Enticing headlines pull us in, and we want to appear as if we know what’s happening — even if something hasn’t happened yet. Unfortunately, devoting all our attention to the financial rocks makes it difficult to see the opportunities we have some actual control over.

For instance, I’m getting a ton of questions lately that share the same theme. “I just read/heard/saw that this huge financial catastrophe might happen in six months. What do you think I should do about it?”

“Do?” I reply, “How can you possibly do anything when we don’t even know if it will happen and we have zero control over it if it does?” For some reason, people don’t really like this answer.

Look, obstacles will exist no matter what path we choose. But we can decide to look past the rocks to the spaces in between and find a way that takes us beyond the obstacles. Yes, the financial version of kayaking takes practice. It starts by learning to see what opportunities exist and acting on that knowledge.

Do we worry about a possible recession next year, or do we work some overtime to save a little more now? Do we focus on the possibility that the Federal Reserve might raise interest rates sometime soon, or do we try to save some money by refinancing our mortgage now?

There will always be the temptation to make the rock our focus, both on the river and in our financial lives. But we always have the choice to look for a way around the rock, too. For me, I choose to follow the opportunities. Where will you choose to go?

This commentary originally appeared June 22 on NYTimes.com

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The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2015, The BAM ALLIANCE

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Carl Richards

The BAM ALLIANCE

Carl Richards is the creator of the weekly Sketch Guy column in The New York Times and is a columnist for Morningstar Advisor. Carl has also been featured in The Wall Street Journal, Financial Planning, Marketplace Money, The Leonard Lopate Show, Oprah.com and Forbes.com. His simple but meaningful sketches served as the foundation for his first book, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money.”

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