Sociology was one of my favorite courses in college. Not only did my professor make the topic intriguing but the overall study of sociology possessed a balanced understanding of how people should act relative to how they actually act. In a nutshell, our professor told us that we’re all irrational people that will make poor decisions in our life, financial or otherwise. Realizing that fact at a younger age was rather sobering given that it’s impossible for human beings to be completely rational at all times of their lives. Even the most pronounced PhD’s will confess to being irrational at times. It’s called being a human. The study of sociology tries to further solve the question of why we do certain things that we know are likely poor decisions. It turns out that we, as humans, tend to place too much trust on things we perceive as truthful or the things we think we clearly understand.
Here’s how that notion ties to sharks and vending machines. There’s a statistic circulating around the internet that claims the following: “You’re more likely to have a vending machine fall on you than be attacked by a shark.” Interesting statistic. Let’s think about this for a second. When’s the last time you started pushing on a shark for it to spit out your favorite candy bar? Hopefully the answer is never. However, if you’ve actually done that, we’d love to hear about it (call us!). The point here is that if we step back and simply think about how many people interact with vending machines every day, relative to how many interact with sharks every day, then it makes absolute sense that the likelihood of a vending machine falling on you is greater than that of a shark attack! At the end of the day, we’re comparing apples to oranges.
So, what can we learn from this? Firstly, know that vending machines are safer than sharks. Secondly, being rational about your retirement, spending, saving, and investing is difficult if you’re solely responsible for making those decisions. The difficulty is further amplified when we hear about rogue advice from friends, family, or worse, the media (i.e. vending machines vs. sharks). This is why the team at Credent Wealth Management employs an objective decision-making process that attempts to place you on your unique path to success. That process remains objective as it relates to your financial plan as well to the investment management component of that plan. We make it our job to pinpoint conventional pitfalls and work as your partner in working towards your specific goals.