Optimal Thinking Protects You from Financial Despair

Many people jump into get-rich-quick schemes, create ruinous debt, and fail to employ solid strategies that serve their best interests. So what really happens to disappoint and frustrate these people? How do they sabotage their financial success?

Many positive thinkers judge, suppress, and ignore negativity. They may have legitimate concerns about a business venture but choose to ignore them. You have probably heard these people say, “I don’t want to hear any negativity!” These people are afraid to face the truth.

Negative thoughts and feelings are not resolved when we suppress, deny, or devalue them. We simply function with layers of unresolved problems and compromise our choices, morale, productivity, and teamwork. Applying paint over rust doesn’t remove the rust.

So how can we give ourselves the best chance of success? Use Optimal Thinking, the language of our best self! Instead of applying paint over rust, Optimal Thinkers acknowledge the rust, treat it, and then apply the best paint. We respect negativity, seek to understand it, and immediately ask the most constructive questions in order to find the best solution.

Do you know people who believe that their dreams will be achieved by a magical divine process that is triggered by the intensity of their faith? Armed with unrealistic expectations, such optimists approach life with a false sense of security, and are ill prepared for negative consequences.

In the recent heated real estate market, many investors employed wishful thinking. These optimistic thinkers convinced themselves that real estate could be evaluated with unrealistic criteria. They assumed that properties could be bid up to any level, and would remain there. When the cost of failure or probability of failure is high, optimism is the wrong strategy!

Optimal Thinkers eliminate unnecessary disappointment, because we entertain realistic expectations. We accept what is out of our control, and focus on optimizing issues within our control. We explore our options and make the optimal choice from realistic alternatives. Instead of hoping for the best, Optimal Thinkers embrace reality and ask: “What are my/our options?” “What’s the best thing I/we can do under the circumstances?” When the stakes are high, we employ an optimal contingency plan against the worst-event scenario to minimize danger and negative consequences.

Have you participated in a conversation where positive thinking has become wishful thinking? Here is an example:

Warren: I am having sleepless nights. I’m worried about buying this property with an interest-only loan.

Wishful Wendy: Just stay positive and everything will turn out fine.

Now let’s experience the difference when two Optimal Thinkers confront the same issue:

Jack: I am having sleepless nights. I’m worried about buying this property with an interest-only loan. What is the best thing I can do?

Ralph: What’s the worst thing that could happen? What do you think is your best strategy if the worst occurred? How can you minimize your risk? What are the most constructive actions you can take under the current circumstances?

So how does Optimal Thinking protect the best interests of businesses? Most companies understand that data loss caused by computer hardware failure is costly and can even be catastrophic. The probability of such failures is also considerable. As the cost of duplicating records is not prohibitive, it is common practice for companies to establish back up systems. The most prudent companies back up their records and house them in external facilities in case of fire, flood or earthquake. In such instances, where employees are unable to gain access to the company’s premises, damages are significantly reduced.

When evaluating risk, the probability and cost of failure (including the ability to cope with the consequences) must be weighed against the cost and benefits of prevention.