How “Fundamental attribution error” can make or break you
My very first business partner was this brilliant entrepreneur that owned what seemed to be half of the real estate and businesses in Orlando. He had a fascinating story. He was born into royalty and massive wealth, but his family was overthrown. Like something from a Jason Bourne or James Bond movie, he was thrown into a military airplane covered by the dark of night, left all of the wealth and power he grew up in behind, and dropped into the U.S. without family, friends, or resources.
As he was trained in military combat, he convinced the owner of a martial arts school to let him sleep on the mats at night if he promised to clean up and help teach classes during the day. Within 5 years of landing in America, he had amassed huge wealth and influence. He had rebuilt the fortune he lost.
There is a principle here based on a universal, psychological truth that has been well documented. If you give a broke and broken person a million dollars; soon they will be broke and broken again. On the contrary, if you take the riches away from a wealthy, successful person; soon they will be a rich winner again.
These facts are not based on winning some genetic lottery or simply being born into a rich family. It is grounded in our thinking, perceptions, openness to learning, and the resulting actions that we take. The tendency to be biased, judge, or develop attitudes and opinions about others, ourselves, and our is called the “Fundamental attribution error.”
Whether we recognize it fully or not, each of us has certain cognitive biases that cause us to view life, work, money, and our potential in a particular way. Therefore, we can make a fundamental error that impacts how you judge your own possibilities and whether or not you believe something is achievable. In other words, your fundamental attribution error can cause you to really aim low in your own life.
Here are 3 example errors of many that can keep you poor, average, or limit you from greater wealth, satisfaction, and fulfillment.
NECESSARY ERROR CORRECTIONS:
1. HAVE RULES
The point is to change flaws in thinking about how wealth accumulates to having rules. There is a well-known rule called the 50/30/20 RULE. 50 percent of your income goes to the essentials (food, mortgage, utilities), 20 percent goes to savings and investing, and the remaining 30 percent goes to lifestyle; restaurants, vacations, Netflix, Starbucks, clothing, etc. It’s not the only rule out there and many follow a rule where they flip the 30% to saving and the 20% to lifestyle. Have a rule!
2. KEEP LEARNING
Many opportunities are written off because people feel it’s outside of their skillset. As a result, you can feel stuck or with limited options. Today, nothing could be further from the truth. You can take online classes in just about any area of importance right now or add additional certifications, skills, and degrees from home. Very current examples:
A. My son is early in his career, so the salary is limited. Rather than the error of “patience” – he’s getting his realty and brokerage licenses to do part-time on top of his job.
B. I have a company that teaches doctors to do lab testing and provide protocols in natural health. Doctors have created an entirely new business within their existing business where they once felt their income was at capacity.
C. As someone with degrees in nutrition and chiropractic, I personally felt stuck on the business side. I went back and got a masters and a business doctorate and now have been able to further advance my healthcare work as well as create opportunities in tech, finance, and corporate.
3. ELIMINATE YOUR FEAR OF INVESTING
Yes, there are risks. Whether it’s real estate, stocks, bonds, cryptocurrencies, starting a business, or investing in someone else’s business money could be lost. However, it is a far greater risk to not invest than to invest. A few points:
A. By having dollars allocated across different types of investments, you insulate yourself from many of the ups and downs in the market.
B. With several wise investments, one going poorly can be recovered by the ones that go well. I did an angel investment years ago where the company did not succeed, but another angel investment made exactly 7 times what I lost. If stocks dip, but your renters are still paying rent then you are still cash flowing and can be patient as markets have historically always come back.
C. As costs inflate, dollars shoved in a mattress (bank account) lose their buying power.
D. Dollars just kept in savings are also not compounding thus, it will be hard to difficult for you to become wealthy or a millionaire unless you’re making millions from your job. In other words, the bury your money in the ground may feel safe, but it’s an error in thinking. You’re actually losing opportunities and likely killing your chances of accumulating wealth.
MORE ERROR CORRECTIONS TO COME!
Have fun saving the world
Dr. Ben
