"After all, it feels good to keep moving, and who wants the frustration of discovering that they've actually been driving in the wrong direction...?

The snippet above is from an article at 99u.com by Christian Jarrett on "The Ostrich Problem" and The Danger of Not Tracking Your Progress.  If you read the article you'll find a certain reference in there to yourself somewhere and it not to yourself most certainly to someone you love, or know well. (the fact that you don't recognize yourself is another ostrich problem.)

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Now, I know that finance is my job and I tend to focus on it in most of the blogs I write so It shouldn't come as a surprise that I'm going to do it again. 

So, let's think for a moment about all the problems that the Ostrich Problem creates in the realm of personal finance and to help us all out, I'll list the ones that quickly come to mind; 

  • Bad investments
  • Bad insurance programs
  • Bad estate plans
  • Not having enough money for a goal
  • Not having enough money to retire
  • Not having enough money to stay retired
  • Leaving your heirs worse off than you'd ever imagined
  • Bad portfolio design

Ok, there's a few. 

Most of these maladies are caused by the simple fact that as humans; we avoid feedback loops that confirm the negative fears that we have. Like a plague we avoid them. And, this is what really compounds the bad decision.  I mean really, it isn't that we're somehow going to stop making bad choices but it's when we ignore them after we've made them that the damage starts to spread in an almost unworldly way. 

"The temporary pain of negative feedback is nothing compared with the crushing experience of project failure......."

Another snippet from Christian that rings so absolutely true. 

Risk in investing is and likely always won't be defined by market volatility. 

Risk in investing is the probability of not having the money you need when you need it. Think, daughter's wedding, kids college and worst of all, retirement. The problem with getting off course and not knowing it is that we have then no ability to initiate interim course corrections. 

I think that Christian might have it just right at the close of his article....

It's ok that you haven't been checking, now forgive yourself and start checking. 

One of the true benefits of planning lies not so much in it's ability to anticipate the future as it does in it's innate ability to quantify the present.