There’s this cooking show I happened to catch on TV. The person who was cooking had certain personal preferences when it came to food as she was extremely health conscious. This particular time she had to make a desert for fellow participants in the show who would rate her. She chose to bake a cake but since she was very pro health she did not use enough sugar. She got the lowest points on that particular show. This is the mistake she made. She was in a competition to win and try get as many points as possible. However, she put her personal preferences ahead of those of the people who were consuming her product. She gave herself the identity of the health conscious consumer instead of recognizing that it was all about the people giving her the marks. They would have wanted more sugar in the cake, health reasons aside. She did not have to personally like the cake she was eating because it was never about her. This got me thinking. How many times do we have the same case of mistaken identity when it comes to money or business? We think it’s about us yet we should be looking outward. Here are some of the mistakes we make.
- Investing in what we like. It’s one thing to invest in what you have done research on, that which makes sense to you but it’s another thing to invest in something because you personally like it and keep looking for these pleasant sounding things to invest in. Your reasons for investment and your reasons for consumption are totally different. You may want to live in a certain house but that is not necessarily the property that makes investment sense. Your reason for buying a house are more personal whilst the reasons for buying an investment property are driven by logic. Will it get you the return you want? You are not going to live in that property. You may like a certain company listed on the stock exchange because you consume their products. That is not the reason to buy it. You need to evaluate it from a business perspective. Don’t also imprison your investments within your status. What you do in your day job has no reflection on investments. You can be the CEO of the biggest company in the world but your investments do not have to rise up to your CEO status. (Click to Tweet this thought) You can choose to own a mandazi shop if that’s what makes sense.
- Many people start business because they believe they have a good idea. However sometimes these ideas are simply based on what they would personally use as opposed to products or services their target consumer would buy. You might just be the only person in the world who would use that product. You need to go outward and bake the sugary cake. Does it present a solution to your target market? Do the research to ensure that somebody else will find it worth their money. Even when we do have a great product or service, we speak about it or market it as the creators but not the buyers. Honestly if it weren’t for the fact that we have to take medicine would any of us buy it given the jargon on the packaging? Don’t do this with your product. When we do this we do not relate to a customer because we are speaking in a language they either do not understand or cannot relate to.
- Looking at opportunities from our current circumstances. The lady I spoke about had the skills to bake any cake in the world yet she limited herself because of what she chooses to eat. Very many times we limit how we look at opportunities because we are looking at our current resources, qualifications, money in the bank, age etc. Say you have a law degree. It does not mean the only job you can get or business you can start is in law. You still may have skills e.g. communication that can be used in other areas. I know some people who have these law degrees but work as trainers, marketers, management etc. I know accountants who have left their professional fields and now run construction companies. Many people have initiated investments or business ventures with no money to speak of. You don’t need to have it all by yourself. You can put people together with different resources and different skills. Look at the opportunities first just as this contestant should have looked at the opportunity to make a really good dessert. Don’t limit your vision simply because of what you have today.(Click to Tweet this thought)
- Letting our current and immediate feelings get in the way. After many years of teaching money, I have learnt that most people don’t plan their finances because of how they feel. We don’t budget because it makes us feel restricted. We don’t take risks on certain investments because we are afraid. We don’t face up to our debts because we feel ashamed. Whist we must acknowledge that we feel these things, it is not the reason not to do them. Most people who achieved anything felt the same way. They felt afraid but still did it. It’s okay to be free with our emotions but they cannot become our identity. In fact, in this way they also become our prison. You can feel afraid; it doesn’t mean you shouldn’t move forward. Many people have defined themselves as risk averse yet it is clear that to achieve their goals they do need to take some aspect of financial risk. It’s not about you and what you feel presently, it’s about the goal or objective.(Click to Tweet this thought)
Don’t come with a mistaken identity into your financial decisions.