I want to share something with you that's simple to understand but difficult to do because it's very uncomfortable to think about what could go wrong when things are finally going right for us. The mind has a very hard time holding 2 seemingly opposing views or beliefs at the same time. This not only affects our relationship with money but many other areas in life.
The concept I want you to memorize is this: The house always wins.
Now to really understand this we have to define what exactly the "house" is because there is an obvious answer and there are other not so obvious answers.
But for now just understand that one of the biggest mistakes people make when things are going well is continuing to leverage up, believing that what’s working today will continue to work tomorrow, not having situational awareness of the market environment (hint: all markets boom and bust), then losing it all when the dominoes start to fall.
I've seen it happen many times to some very very smart people. I've experienced it personally and had to learn some hard and painful lessons. This isn't something talked about often because its not sexy, it doesn't sell very well, and its actually a bit hard to identify accurately what exactly is going on. Anyone who's survived what I'm talking about knows this is truth.
The issue is, when things are going really well and we have a lot of positive momentum we think losing can't happen to us. It's not that we don't believe it's possible, it's just that we don't want to believe it. It's not comfortable to think about because its negative and... why ruin the success high we're currently on?
But this is exactly what separates the pros from the amateurs or the 1% from the 99%.
Pros force themselves to think about the possible negatives when things are going well, they visualize what could go wrong, and they put systems in place to counter their own human biases and prevent worst case scenarios.
So if you're killing it right now in your business, in real estate, in the stock market, in online marketing or anything else, how do you prevent a catastrophic loss, one that wipes you out totally and gives everything back to "the house"?
There are several steps to this process but the first one applies not only when things are going well but its also a MAJOR success secret when you're struggling financially. If you start applying this concept today it will change your life.
Here it is, it's so simple but so powerful: Take money off table.
The one skill that separates long term winners from long term losers is good risk management skills.
To become successful in anything we have to be willing to take risk. However, to remain successful we have to learn how to manage risk and there is a very BIG difference.
I'll discuss this more in the future but for now I wanted to share this idea with you because it's a central concept and skill to becoming a Wealth Builder, to mastering our money and living free.