New Year resolutions are nonsense… Everyone should have them. Let me explain:
With today being the first trading day of the New Year it is only fitting to discuss fresh starts and New Year resolutions. The concept of New Year resolutions is quite nonsensical if you stop and think about it – the vast majority of those who participate are setting wildly unrealistic goals and destined for failure, likely before Valentine’s Day. What’s the justification for these goals? Well, it used to be 2021 and now its 2022… Not exactly a compelling argument.
What’s the difference between a New Year’s resolution and a July 22nd resolution? How about an August 12th resolution? The only difference is that we perceive the New Year to be a ‘fresh start’ – which in a small way, it is. When you woke up this morning your YTD performance was at 0%. Whether you were +10,000% last year or -99%, we all started today at ZERO. This type of reset feels nice. It allows us to put the past in the past and focus on what we want to achieve next… but in a broader sense, nothing has changed. You’re still the same person on January 1st that you were on December 31st. So the question is, why wait until January 1st to set the past aside and focus on the next goal?
The only reason New Year resolutions feel different than ‘regular’ goals is that we percieve a tangible change when the calendar changes. So, what if you could experience this same sense of change every time you set a goal? You can.
As complex as the human mind is, it is shockingly easy to trick. For better or worse we can quite easily fool ourselves into perceiving situations a certain way. We often do this without realizing it. You can use this to your advantage. Want a fresh start? Make one! Here’s how:
- Change Your Surroundings | By show of (virtual) hands, how many of you cleaned or reorganized your office/workspace between Friday’s close and today’s open? I’d wager the answer is upwards of 70% of you. A fresh start often comes with a change in surroundings. This is something you can do any time throughout the year. Stuck in a rough patch? Try rearranging your office, switching your chart colors or even switching brokers. This visual reset can trick your brain into ‘fresh start’ mode.
- Reset Your Progress | Lets say for example in March your account is down 20%. You’re struggling and all you can think about is getting back your losses. This mindset will only cause you to dig yourself a deeper hole. So why not ‘reset your account’? Treat your current account as a brand new account with a 0% P/L. Adjust the balance to be a nice round number and hide your brokerage YTD stats – whatever helps you ‘trick’ your brain into thinking you are starting new. This works both ways. Say you are up 100% on the year and find yourself getting arrogant and aggressive… set that value as your new ‘starting point’ and take the same approach you had on January 1st. Of course, with this approach you are not actually changing anything… but changing your perception of the situation will change how you handle the situation, hopefully for the better.
- Set Frequent Goals | Setting goals is something we should be doing at a MUCH higher frequency than once per year. Setting a broad and unrealistic goal for the year without a road map of how to get there is only setting yourself up for failure (hence why most New Year’s Resolutions fail).
For example, your resolution is to ‘go to the gym more and get in shape.’ Okay great, but how will you achieve this? Do you have monthly checkpoints? Weekly or daily goals? Without smaller goals along the way you are almost certain to lose sight of the main goal.
Additionally, setting these smaller and more frequent goals can help with the perception of a ‘fresh start’. If you missed this week’s goals, no problem! You get a new goal next week. No need to wait for next year.
This brings me to my personal New Year’s Resolutions:
- To create quality, realistic and high frequency goals — I have set my primary goal for the year and created sub-goals for each quarter. I will create monthly and weekly goals along the way to help me stay on track.
- To celebrate every victory — This is an area I have greatly struggled in. I am highly ambitious and my own biggest critic. When I fail to achieve my main goal I often dismiss the entire process as a failure and ignore the smaller successes along the way. This is a self destructive way of thinking. I have decided to be intentional about actively celebrating every achievement, no matter how small. The compounding of small victories will lead to the broader achievement.
As 2022 unfolds remember this –
Waiting for a calendar to tell you when to have ambition is senseless. You are in control of your year. Put yourself in a position to succeed, never give up and enjoy every moment. Cheers to a year of achievements!
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