You have organizing principles whether you realize it or not. We all do. And those principles have more impact on our financial success or failure than we realize.
What Are Organizing Principles
Organizing principles are filters through which we process information. Let me give you an example to illustrate how they work and why they are so important.
I met a gentleman about a month ago whose name is Bob. He is a very successful physician and a pretty smart cookie too. Bob knows that he’s clever. And one of Bob’s organizing principles is that he knows what is best.
That serves him well as a doctor but it often bites him in the behind when it comes to his financial life. Despite the fact that he makes over $500,000 a year, after 20 years working he hasn’t got hardly any savings.
He told me that his problem was that his investments weren’t performing well. He needs his money to grow faster and wants to be very aggressive. I disagreed. Instead, I suggested that he start tracking his spending and automate his savings. That should be his focus – not aggressive investing.
At that point he became defensive and changed the subject. His organizing principal was that we knew what needed to be done and didn’t have any use for someone with an alternative view. Needless to say, the meeting went downhill from that point on and we parted ways.
As I wrote about in Forbes, people with this kind of mindset are easy prey for unscrupulous financial sales sharks. Sadly, there was nothing I could do to save Bob from himself.
But this quick vignette illustrates a few key points. First, organizing principles have their advantages. Bob’s core belief that he knows best gives him a great deal of confidence and empowers him to be decisive when treating patients. That’s great.
But too much self-confidence blinds Bob from the obvious; he has a problem and he needs to manage his financial affairs differently. That block is the reason why Bob is unable to save much money compared to the income he generates. It’s also the one and only reason why he’ll never be able to retire.
And as I said above, it’s the reason why the “Bob’s” of the world get taken advantage of. That’s an expensive organizing principle if you ask me.
The take away is that your organizing principals might be very helpful to you up to a point. But if you’re like Bob and you apply the principal too broadly, you’ll end up in trouble. Let’s explore this a little further.
Let’s say your core believe is that people are honest. That’s a good organizing principle. You’ll treat others with dignity and in turn, you’ll be treated with respect. Most people will be fair and honest with you. But some people will take advantage. Other’s will disappoint you. This could cost you dearly.
Let’s consider the flip side of this. If your core belief is that people are dishonest, you won’t fall for any funny business. That’s good but there is a huge cost as well. Your life will be limited. You’ll have few friends if any. You won’t trust others. You’ll only see risk and ignore opportunity. Your life will be very narrow and probably very lonely. Again, your organizing principles protect you to a point but they can be very costly if taken to the extreme.
How To Have Great Organizing Principles That Always Work In Your Favor
The first step in having organizing principles that always work for you is to recognize what drives you now.
I am not a psychologist. But in my way of thinking, there are two parts to this. First, discover what your core values are by taking any number of free quizzes. You might even want to take a few quizzes to make sure the output is accurate. Typically, these tests ask you to identify certain beliefs that are most important to you and they help you prioritize them. The result of these quick exams is a list of those beliefs that really define who you are.
The next step is to take your list of core values to 5 people you most respect and feel closest to. They will act as accountability partners and mentors. Ask them to share their experiences with you.
Ask them to be completely honest and brutal. And encourage them to talk about how they see you living in (or out of)alignment with those beliefs and ask for examples. Of course, prod them to share their thoughts on how you can improve. Do they recognize behavior that is inconsistent with these values? What are those inconsistencies? What other core beliefs are you missing that limit you?
Once you’ve gone through that exercise, ask your accountability partners two final questions. First, what organizing principles do they recognize in you that serve you best? And second, what are the core beliefs that serve as the greatest obstacles in your life?
It’s great to recognize the thoughts that contribute to your success. But it’s more important to identify the core beliefs that hold you back. If you want to overcome them, just keep a daily journal. Record your daily experiences and how your organizing principles helped and hurt you throughout the day.
The magic will happen if you do this exercise daily for 30 days. You will use more of your day to manifest the core beliefs that propel you forward and waste less time on those principles that hold you back. I don’t do this all the time. But I have gone through this process and when I did, it was extremely beneficial. I need to get back on this pronto.
What are your organizing principles? Do you think it’s possible to manage these beliefs? What has been your experience? Are there better ways to find self-improvement? What are they? Please leave a comment. I’d love to learn about your experiences.
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