Dealing With an Investing Blind Spot

Psst. Excuse me. I’ve got a secret.

I feel like I should be talking really quietly right now, but first I need to warn you. This secret is going to seem incredibly obvious. You may even wonder why I’m going to tell you about it at all.

The secret comes in two parts:

 

1. We all have blind spots.

2. By definition, we can’t see them.

See what I mean about being obvious? They’re called blind spots for a reason, because you can’t see them. But here’s the real tragedy: We’re often totally uncoachable when it comes to dealing with this secret.

I know this is true because I’ve experienced it myself. For months, my trainer was trying to help me solve a stomach issue. He suggested I keep a food journal to see if my symptoms pointed to an allergy. For months, I refused. I already know what I’m eating. I don’t need to write it down in a journal. Sound familiar?

Trust me. You have blind spots, and it’s really hard to be objective about our own behavior. But there is hope, and the solution is simple, if not easy to do.

We need to be coachable. We need to find, and then listen to, other people who can see our blind spots.

A friend of mine, a retired investment banker, did just that himself. This guy knew his way around money and definitely knows how to invest. But he was looking for help with his money. I said to him once, “Of all the people I know, you’re in the best position to deal with your investments. Why do you need help?”

“Carl,” he replied, “I could invest my own money, except for the ‘I’ part.”

He understood that when it came to his own money, he had a blind spot. And he recognized the value in having someone else help him see the mistakes he might make. Again, the solution is simple, but not easy. We need to be coachable.

Like my trainer, there are other people experienced in seeing blind spots, and they’ve seen our type before. Often when we walk in the door and start talking, they can see what we don’t. And because they care about people like us for a living, they want us to succeed.

Maybe it’s our ego that keeps us from asking. Maybe it’s fear. Maybe it’s something else entirely. But whatever the reason, we don’t like asking for feedback. In part, it’s because we tend to internalize what we’re hearing. It becomes about us, not our behavior, triggering an instinctive and negative reaction. We say to ourselves, “Who do these people think they are?”

But if we take a different approach and make the feedback only about our behavior, we can shine a flashlight on our blind spots. This feedback is crucial if we want to change our behavior.

It starts by addressing the biggest blind spot of all: admitting we have any. The next step can be a little trickier. Finding someone you’ll trust and listen to can be a challenge. We won’t take and act on feedback from just anyone. We certainly need to trust and respect this other person, who might be a spouse or business partner. But whoever you identify, make the commitment to pay attention when this person provides coaching about your blind spots.

Finally, don’t make excuses when you hear the feedback. Listen carefully and add this information to what you already know about yourself and your behavior.

Imagine telling a friend that you wish you could save more money each month. This friend knows you well and asks you how much you spend each week eating out. You do the mental math and come back with, “Not much.” Remember, your friend knows you well, so she suggests it might be more than you think. She says, “Why don’t you sit down with your receipts and figure out what you actually spent?” The instinctive response might be, “I really don’t eat out that much. And what does my eating out have to do with saving more money?” The smarter response would be, “Huh, maybe I could save more money if I ate out less. I should look at the numbers.”

Sometimes the feedback will be subjective if all the facts aren’t known or knowable, but if the advice points to something you hadn’t considered, there are few reasons not to test it. Turns out I eat quickly and may not be chewing my food well enough, which is not something I would have easily figured out on my own. After all, we’re oblivious to blind spots until someone helps us see what we’ve been missing.

This commentary originally appeared September 28 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

Carl Richards, CFP®

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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