Dualistic Thinking

Dualistic thinking assumes a universe where there are only two opposing, mutually incompatible options or realities. This type of thinking is either/or, good/bad, negative/positive, and has a significant impact on our beliefs and behaviours.

Our development is stymied by dualistic thinking. The sooner we can break free from this either/or mindset, the sooner we can nurture greater success in the workplace and in our personal lives.

This either/or mentality contributes to our fears and concerns by presuming the false restriction that no other choices exist. We might feel confined, perceiving little freedom when we think in this way.

We may feel trapped or powerless in a circumstance when our options, choices, and determination appear to be limited. We tend to react emotionally in such cases, sometimes not even aware of the reasons why. 

Dualistic thinking hinders our personal and professional progress because we rarely allow for a range of options. We rate the situations and people around us on a binary scale. We reduce our capacity to see alternative possibilities by limiting ourselves to only two options.

Our psychological bias is a significant hazard of dualistic thinking. The “snake bite” effect, for example, occurs when an investor has a bad experience with an investment that causes them to be more cautious in future investment decisions, lowering their return potential.

The fear of regret and feeling like we have made a decision that is inherently ‘wrong’ leads to this bias. One way to counter this effect is to adopt a strategy that closely adheres to predetermined investing criteria and eliminates most of the decision-making process on what to purchase, when to purchase, and how much to purchase.

Using rules-based trading techniques decreases the likelihood of an investor making a discretionary decision based on previous investment success.

We create unrealistic expectations when we consider simply “good” and “bad”. Whatever decision you make will have implications, some of which will be unexpected.

Those implications may appear to be a choice between what you leave behind against what you get, or there may be aspects of both that you appreciate. It’s crucial to recognise that it’s often impractical to expect our actions to only have two possible outcomes; we should always look for a third outcome to help balance our expectations.

Once we have realised this, we can concentrate on what appears to be the best course of action for our personal circumstances.

Things don’t get easier – we become more resilient

Life is uncharted. Maps can only be made from where we’ve been – not where we have yet to go.

The only certainty is uncertainty, and we can experience potentially life-altering choices on a daily basis. Each nebulous choice we make brings with it a unique flood of thoughts and emotions. Yet, we generally adapt well, over time, to life-changing situations. This is, in part, thanks to resilience.

Psychologists define resilience as the process of adapting well in the face of adversity. As much as resilience involves endurance against difficult experiences, it also empowers us to grow and improve along the way.

Resilience is learned; it involves behaviours, thoughts, and actions that we can all develop. Improving resilience takes time and intentional effort, much like building a muscle.

To increase your capacity for resilience, here are four core components on which to focus: connection, wellness, healthy thinking, and meaning.


In the middle of challenges, connecting with empathic and understanding people may remind you that you are not alone. Concentrate on locating trustworthy and sympathetic people who can validate (or empathise with) your feelings, as this can help you develop resilience.


Self-care may be a trendy buzzphrase, but it’s also a proven strategy for improving mental health and resilience. This is because stress is both physical and emotional. Positive lifestyle variables such as a healthy diet, adequate sleep, plenty of water, and regular exercise can help your body adapt to stress and lessen the impact of negative emotions like anxiety and sadness.

Healthy Thinking

How you think has a significant impact on how you feel and how resilient you are when confronted with challenges. Identify areas of illogical thinking, such as a tendency to catastrophise problems or a belief that the universe is conspiring against you, and replace them with more balanced and realistic thinking habits.

For example, if you’re feeling powerless in the face of difficulty, tell yourself that what occurred to you isn’t a predictor of what will happen in the future. You may not be able to affect the outcome of a highly stressful situation, but you can control how you understand and react to it. Remember, we can map out the past with amazing accuracy, but what happens in the next moment will always hold the potential for something radically new.


You can gain a sense of purpose, promote self-worth, connect with people, and tangibly help others by volunteering at a local homeless shelter or just supporting a friend in need, all of which can empower you to build your own resilience.

Resilience is present in any aspect of our lives where we are facing adversity. Be it personal, financial or elsewhere. But the underlying principles of forging resilience are the same. Build a network of strong connections, focus on personal wellness, keep a healthy mindset, and find your meaning.

Don’t be a lemming

One long-held belief is that lemmings purposefully run off cliffs in their millions. This myth has become a metaphor for the behaviour of crowds of individuals who follow each other blindly, regardless of the consequences. Herd instincts are prevalent in all parts of life, including the financial industry when investors follow what they feel other investors are doing rather than conducting their own research.

A herd instinct is a type of behaviour in which people react to and follow the activities of others. This is comparable to how animal groups react to danger – whether real or imagined.

Following the crowd or herding can lead trends to amplify well beyond fundamentals. Prices can skyrocket when investors flood into ventures for fear of losing out or because they have heard something positive but haven’t done their own due research.

This unreasonable optimism can lead to asset bubbles that eventually burst.

In the opposite direction, sell-offs can lead to market crashes when people rush to sell simply because others are doing so, a phenomenon known as panic selling.

If most people are heading in one direction, an individual may feel as if they are making a mistake by walking in the opposite direction. They may also be afraid of being singled out for refusing to join the bandwagon. Although herding is instinctive, there are strategies to avoid following the mob, especially if you believe you will be making a mistake. It necessitates self-discipline as well as a few considerations:

  • Doing your own research is essential; study the facts and data and draw your own conclusions. Once you’ve completed your due diligence, then you can look at other people’s interpretations.
  • Inquire about how and why individuals are doing things. Are they making decisions based on the movement of the herd? If you believe it is the wrong decision for you, don’t be afraid to go against the grain.
  • If you’re distracted or emotionally charged, whether from stress or external factors, postpone making decisions.

Making investing decisions based on logical, objective criteria and not allowing emotions to take over is a solid strategy to avoid herd instinct. Another option is to use a contrarian approach, in which you purchase when others are panicking, taking advantage of bargains, and selling when excitement leads to overvaluation. As Jonathan Sacks once said, “The wisest rule in investment is: when others are selling, buy. When others are buying, sell.”

At the end of the day, it’s human nature to want to fit in, so resisting the impulse to stray from your plan might be challenging. This is where financial planners step in, serving as a sounding board for your decision-making process.

I’m not sure I want to know

There’s a story that was told many years ago (it may or may not be true…) about a Microsoft call-centre agent and their call with a deeply irate customer. Having recently purchased a computer that came pre-installed with Windows, the customer called to find out why his computer would not respond.

It goes a little like this:

Call-center Agent (CCA): Thank you for verifying your purchase; how can we help you today?

Customer (C): My computer isn’t responding, and I’ve tried everything!

CCA: Thank you for that feedback. What do you see on your screen?

C: Nothing!! Absolutely nothing!

CCA: Please press control, alt and delete together. Has that helped?

C: No – nothing has happened. I’ve tried all of this already!!

CCA: Is there an error message on your screen?

C: No – the screen is just black.

CCA: Is your screen on? Do you see the power light on in the bottom corner?

C: No – there is no power light on. (becoming more amiable) I don’t think the screen is on.

CCA: Is it plugged into the back of your computer correctly?

C: Hold on, I’ll follow the cable and check. (a few seconds pass) I can’t see behind the computer; it’s too dark.

CCA: Are you able to turn the lights on to check?

C: No, I can’t; we’re currently having load-shedding.

Sometimes, our biggest problems are our most basic problems. And, we can’t always see them ourselves until someone else reminds us. When it comes to financial planning and managing our money, it’s easy to become side-tracked by big ideas, fancy strategies, forecasting and spreadsheets, and overlook the basic starting blocks of budgeting. We miss what’s happening right in front of us.

Budgeting helps us stay connected to what’s happening with our money right now. So – why don’t we do it religiously?

Carl Richards, a regular contributor to the New York Times, shares some reasons for why we allow this to happen.

1- It’s not fun.

True. But remember, as Stephen Covey says, “If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster.” Budgeting is how we make sure our spending ladder is leaning against the right wall.

2- I already know where my money is going.

No, you don’t. Sorry. Unless you track your spending, you don’t have a clue where your money goes. Everyone I’ve ever seen go through the process of tracking spending for 30 days usually ends up saying some version of, “I had no idea I was spending that much on X.”

3- I’m not sure I want to know.

I think this is the biggest mental hurdle. The reality is that as we become aware of what and how we’re spending, we’ll find some things that surprise and bother us. Then we have to decide: Do we want to change?

Carl goes on to suggest four ways to get back to the basics of budgeting:

1- Try tracking your spending for 30 days.

2- Don’t stress about what app to use.

3- Just carry around a pen and a little notebook, and each time you make a purchase, write down what you spent and how it made you feel.

4- At the end of the month, go back through your notebook and just notice. Become aware. That’s it.

The glamorous side of managing our money is making purchases that make us feel better – not in tracking our spending. But, the feel-good side of managing our money is in regaining and maintaining control of what we can do with our money, which starts with budgeting.

As Carl said, it’s not about making significant changes. At first, it’s just about becoming more aware and noticing what’s going on, noticing things that we may have missed or overlooked. 

The result is that we will be more mindful and have more control over our money; and that’s worth knowing.

How to do it in the 4IR

“But we didn’t need it, and we turned out fine.” 

We hear this line more than we should. From tap water to technology, from diets to devices, from gender identification to genetic modification, from schooling to selecting a coach or advisor, our peers and mentors can often throw this line in our face – but we didn’t need it, and we turned out fine.

It can leave our sails windless and stall our engines before we’ve even selected a gear.

But here’s the thing: the Fourth Industrial Revolution (4IR) poses one challenge that previous generations have never had to meet: prolific access.

Access to what? Everything.

One of the significant changes that we’ve seen in the world around us over the last two decades is the overwhelmingly enlarged access to information. Before the profuse use of mobile technology and cloud-based servers, data was stored in books and brochures, libraries and archives, making it harder to access. Now, we literally have the world (wide web) wirelessly at our fingertips. And those born this century have not known anything different.

Information is now so readily available that we have a new challenge: how do we find the valuable information that is relevant to us right now? On top of that, we have comparisons that we could never quickly draw before; like how the stock market performed last year, in 2008, 1998 and 1928. Heck, we can even compare the Bitcoin bubble to the Tulip bubble in 1636.

DIY is no longer about putting up new bookshelves in your bedroom; it’s about choosing, managing and prevailing on virtual shelves (platforms) for social engagement, investing, shopping, job hunting, learning, travel and just about anything else you’d like.

We are overwhelmed, our parents are overwhelmed, our children are overwhelmed.

The expectations are no longer what they were in 2004. Our opportunities are considerably more expansive, and the perceived consequences of ‘getting it wrong’ are infinitely more shareable. Now, the most dangerous words are: “We’ve always done it this way.”

We need to encourage each other to do things differently, to rely on experts, advisers, mentors and coaches to help us navigate this new revolution. These helpful people are not just for the wealthy or well-connected; they’re for all of us.

As our connections grow, we need to be willing to do the inner work of building our character and protecting our values. It’s not about changing fundamental truths; it’s about changing our perspectives about how big the truth really is.

Making decisions in the 4IR is no longer about extracting one choice, it’s about engaging in conversations.

Are you money-mental?

The simple answer is: Yes, we all are!

In a recent blog, we looked at five financial trip-wires and glanced over the term ‘mental accounting.’ Introduced in 1999, it’s a concept that refers to the different values we place on money. These values are often based on subjective criteria; sometimes, this subjectivity benefits us, and sometimes it doesn’t!

Mental accounting enables us to create emotional connections with our financial plan. When we consider investment strategies or risk cover, an emotional connection to the outcome, or the goal, is established and we are more likely to continue contributing money to that account.

The perceived importance of the outcome causes us to view the money involved differently. However, money is the same, no matter where we put it or how we spend it. There is a technical term for this universality of money; it’s called fungibility. Fungibility essentially speaks to the equal value of assets.

We learn about this very early in life – just think about kids in the sandpit who are learning to share. If one has the spade and bucket, and the other has the castle mould, they will very quickly figure out that swapping the mould for only the bucket, or only the spade, is not a fair value exchange. A fair trade would be both the bucket and the spade for the mould. 

As we grow up and start to trade with money, we conform to the commercial conventions of our society. We exchange money for products or services, and if we pay one price for an item in one place, we expect it to be similarly priced everywhere else. If it’s more expensive, we would expect to receive more value for that item.

This is where it gets more complicated, and we learn that value is highly subjective. Something that I consider valuable may not be something that you consider valuable. Mental accounting comes into play, and we assign a different value to inherently fungible items.

In an episode of the hit series Friends, Monica discovers that Chandler (her fiance) has a large amount of money invested that could pay for her dream wedding. Chandler initially refuses to spend all that money on one event because he had other plans for the money, long-term plans that included a family and a home. After sharing these thoughts with Monica, she understands his perspective, and they make a new plan together.

According to Investopedia, mental accounting often leads people to make irrational investment decisions and behave in financially counterproductive or detrimental ways, such as funding a low-interest savings account while carrying large credit card balances.

To avoid the mental accounting bias, individuals should treat money as perfectly fungible when they allocate among different accounts, be it a budget account (everyday living expenses), a discretionary spending account, or a wealth account (savings and investments).

Mental accounting also affects our approach to long-term investing and our risk cover. When we are young, it’s harder to invest for retirement – but as we get older, this becomes a higher priority. When we are healthy and strong, it’s harder to pay for life cover or income insurance because we can’t emotionally connect to the possibility that we will need those products.

There are many other areas where mental accounting skews our perspective, like when we receive a windfall (an inheritance, a tax refund or an unexpected gift) or finish paying off a large debt. The sudden availability of money that ‘we didn’t have to work’ for seems to have a different value than the money we receive through our salary, wages or investment payouts.

It’s not easy to simply say – it’s just money. When we are emotionally engaged in our finances, we need to have the space to talk about our options (like Chandler and Monica and the kids in the sandpit) and have a third party (your financial planner) to help us find a healthy balance.

A rational approach doesn’t mean we don’t enjoy our wealth; it means we can be more intentional with our wealth. If you’re feeling a little money-mental, maybe it’s time we had a chat.

If our feelings could talk

Epictetus, the Greek Stoic philosopher, was the first to say it. “We have two ears and one mouth so that we can listen twice as much as we speak.” But listening is not always about what we hear; it’s what we can begin to intuit. When it comes to our feelings, we have to learn to become more intuitive and listen to what our emotions are trying to tell us.

Our mental health is increasingly under attack, it’s hard to find the time for our own personal growth, development and rest. As our brains get tired, our emotional intelligence and physical stamina both take a knock. The global lockdowns of 2020 held a microscope over our mental and emotional health as we saw startling changes in every system, from healthcare, education, commerce and politics to social engagement restructuring, with sports clubs, gyms, and extra-curricular activities mostly grinding to a halt. 

With very little external social input (and outlet) and reduced creative engagement, we were forced to find purpose and meaning outside of everything we once considered unshakable. We were forced to look inside and discover a host of emotions that are not often talked about outside of therapy. It’s helpful to take these conversations further and find common spaces to change how we think about things that may have a negative connotation for us.

Identifying and talking about our emotions helps us think differently and enables us to act differently. How we make, spend, insure and invest our money are all actions that are strongly influenced by how we feel.

Epictetus also said that we are disturbed not by things, but by the view which we take of them. This means that changing how we think can impact how we feel. Here is a short list of common emotions and an accompanying action that we can choose to employ instead of going out and spending (blowing) money or making poor financial life decisions.

    1. Sadness might be telling me to have a good, long cry. Letting out the tears is a healthy physical release to process what we’ve lost.
    2. Loneliness might be telling me I need connection. It is not about how many ‘connections’ we have on LinkedIn or Twitter, or Facebook. It’s about establishing a conversational connection with someone I can identify with, relate to and trust.
    3. Resentment might be telling me I need to forgive. Forgiveness is more about releasing myself than the other person.
    4. Emptiness might be telling me to do something creative. Rather than going out and buying more stuff, I should take a moment to explore my creative energy.
    5. Anger might be telling me to check in with my boundaries. Checking my boundaries is a proactive way to avoid the same thing happening again.
    6. Anxiety might be telling me to breathe. Breathing slower and deeper helps me become focused on what I can control.
    7. Stress might be telling me to take it one step at a time. I don’t have to do everything at once; I can break it all down into manageable, bite-sized chunks.

Learning to listen to our feelings is an excellent skill for handling all sorts of problems, not only our financial frustrations. It is a skill that will also help us notice what others might be feeling and grow in our empathy and sympathy for them.

Hold the line

“It’s not in the way that you hold me
It’s not in the way you say you care
It’s not in the way you’ve been treating my friends
It’s not in the way that you stayed till the end
It’s not in the way you look or the things that you say that you’ll do

Hold the line
Love isn’t always on time.”

If you have the tune of Toto’s yacht-rock hit from 1978, Hold the Line, stuck in your head, then you’re welcome! It’s an iconic tune that reminds us that showing love is not in one act or moment – it’s in everything we do.

It also reminds us that we can’t control the timing of events in our life – and this is why financial planning is so important.

From earning to protecting to investing to enduring, most of us want to know that we’re leaving more than just a fleeting memory behind. Most of us want to know that we’ve found meaning and lived a life of purpose, and are leaving our loved ones with means and opportunity.

Creating this opportunity for them is not easy, which is why we need to hold the line. In most financial plans, there are different ways to provide for your family, one of which includes life cover. Even if we have assets and investments that can provide an income after we are gone, expenses and debt need to be paid back first (remember, we can’t control the timing of life events…). 

Taxes and estate costs also eat into these calculations, which is why life cover is beneficial to boost the financial reserves to take care of the responsibilities for which you currently provide.

Holding the line (holding onto your life cover) benefits the integrity of your entire financial plan, but it’s also harder (and sometimes impossible) to replace this cover when you’re older. New risk calculations, amended products, and penalties will have a more significant impact on your net worth should you cancel your life cover early, hoping to start up later in life ‘when things get easier’.

There are a few ways to alleviate financial strain without forsaking this vital product in your portfolio. These have been shared many times before, but it’s always a good reminder to revisit them:

1. Reduce your monthly expenses

Cut back on items that aren’t essential, such as streaming subscriptions and data contracts. Critically evaluate your budget and examine what is needed and what is simply a nice-to-have. Remember, this is not forever; it’s about prioritizing your financial security.

2. Re-negotiate your debts

Try approaching creditors or your bank to negotiate the terms of any repayments. They may be willing to accept smaller sums over a longer period or help you consolidate loan accounts.

3. Negotiate your premium payment pattern

Request to change to an escalating-premium pattern for your life cover, which means your initial premiums will be lower and increase over time. (this could be product provider dependent)

Holding the line includes ‘the way that you stayed till the end’ – and when it comes to life cover, this cannot be more poignant. If you feel like you need some options to release financial tension or want to initiate life cover again, let’s have a chat and see how we can update your financial life plan.

Me, myself and Ikigai

From the stoics to the sentimentalists, most have one question in common: What is the meaning of it all?

Searching for purpose and meaning helps us come up with a reason for living. As Aristotle always said, our ability to reason is what makes us different to other animals. This sits at the core of Ikigai, the Japanese concept that speaks to our lives’ direction, purpose, and meaning. 

Quite literally, iki means “to live”, and gai means “reason”.

Ikigai = reason to live

It’s a beautifully simple idea that becomes increasingly complex as we investigate precisely what motivates us, guides our passions and helps us make a difference within our communities. In the Western systems of life, we often follow the expected path that is conditioned into us through our education. We don’t get to ask ourselves why, and more importantly, we don’t always have the structure to know how to deeply interrogate our lives to know what will lead to fulfilment.

Ikigai offers us this structure.

Ikigai is a systematic and cyclic way to explore the abstract concepts of satisfaction, delight, fullness, comfort, excitement and wealth.

The four entry questions we can ask ourselves are:

  1. What do I love doing?
  2. What am I good at?
  3. What does my community need?
  4. What can I get paid for?

For many of us, we only really ask the fourth question even though our colleges, universities and trade schools try to answer the others. But sometimes, it’s not the answers we need, but the permission to ask the questions.

Yuval Harari said that questions we can’t answer are far better for us than answers we can’t question. All the wealth in the world cannot help provide delight, excitement and fulfilment if we aren’t able to ask ourselves what we love doing, what we’re good at and discover what our community needs.

This is where we can begin to define and differentiate our passion from our mission, our profession from our vocation and see how we can integrate them all for a purpose and reason to live. 

This integration enables us to dive deeper into our life and financial planning, giving us key pointers and motivations for our decision-making and helping us communicate with our loved ones. We can decide what is truly important to us and why!

They say that if we want to know what we truly value, we must look at where we spend our money. If this aligns with our Ikigai, then we know we’re creating a healthy structure for a meaningful life.

Discovery and discomfort

It’s nearly impossible to make it through an entire week without glancing at a blog, social media post or newsletter that reminds us about the pervasive and perpetual change in our lives. Hopefully, this blog won’t be one of those to add to the list. Instead, it will help us to identify the benefits of the challenges that we face.

Change can be sparked in so many ways, some of them are by our personal choice, and others are simply the way that life goes. When initiating change through personal choice, we can quickly feel like things should be getting better. We have chosen change that we believe will release us from unhealthy decisions and make our life easier.

But we immediately start to feel the discomfort.

Our journey of discovery, whilst exciting and new, is always accompanied by a level of discomfort. It can feel counter-intuitive. We’re making changes because of discomfort, and as we’re implementing and discovering the change, we’re exposed to further discomfort.

This feeling of discomfort is not bad.

When we’re tired and lacking energy, the discomfort can add to the overwhelming elements of life, but it’s not always a sign that we’re doing the wrong thing. As kids, learning new things is always hard. We accept that there will be a level of discomfort, from riding bikes and learning to write, to adjusting to social expectations and managing changing friendships. And through this, we learn and grow.

As adults, we should never stop embracing the discomfort of learning and growing.

Planning and preparing for change needs to include the anticipated discomfort that we will encounter to bolster our resolve to sustain the change that we want to see in our lives. When we sign up to study, we know that there will be the discomfort of writing tests and exams and presenting our ideas and research to panels of critics.

When we choose to be committed to a long-term relationship, there will be the discomfort of releasing our independence and learning to share our schedules, our hobbies, our interests, our money and our friends with someone else. The same is true of becoming a parent: we prepare for the sleepless nights, the sharing of our home and the increased financial responsibilities.

Any change that is worth the long-term benefit will have this wonderful journey of discovery and discomfort. Changing our spending behaviour, keeping to investment decisions during market volatility, and having better conversations with our family and our money all require personal journeys of discovery and discomfort. We mustn’t let the discomfort deter or distract us from continuing to learn and grow.