Prudence

“Haste makes mistakes….”

Proverbs 19:2

Earlier this week, a friend of mine in New York shared an experience they had that reminded me about the importance of Prudence. Yes, Prudence – the ability to act in a measured manner, regardless of the circumstances. He was in a management review meeting, discussing last month’s performance, when he received an urgent message from his financial advisor to sell his stocks immediately. Without much thought, he replied, “go ahead,” and continued with the meeting. You see, Japanese markets were turbulent with cascading effects, markets were not smiling, and trauma from the last stock market recession loomed large. Even Warren Buffett had recently sold a significant portion of equities and was holding cash. He believed it was better to liquidate his holdings before things worsened. Alas, the market drop was not severe as anticipated, resulting in a significant loss for him. He later vented, “In hindsight, I should have just paused the meeting to have a proper discussion with my advisor to understand the rationale”.

Reflecting on his story, I realized he probably didn’t pause the meeting because it was important. However, in the grand scheme of things, the ten minutes he could have spent discussing with his advisor wouldn’t have degraded the meeting and might have led to a different outcome. On a value-per-minute basis, he likely lost more from that transaction than he could have gained from the meeting. Wealth is not just about how much you make but how much you retain. Our inability to “pause and look up” often comes with a hefty price tag of missed opportunities, expensive errors, and potentially major regrets.

I encourage you to resist pressure and avoid being rushed. Wrong decisions often occur when we are:

  1. Under pressure and pushed to react rather than respond. 
  2. Distracted, so we take action without paying attention. We don’t carefully consider or think through the action we are taking. 
  3. Afraid. While fear can be valid, unexplored fear that’s based on emotions without thought almost always leads to negative outcomes. Take time to think (and even talk) through your fears. Separate what is imagined from what is real.

Amidst all that’s going on around you, I encourage you to create space to ‘respond’ versus ‘react’, particularly when the stakes are high. 

Yours in possibilities,

TKO

Ps – I share more details about prudence and the concept of ‘response versus reaction’ in UNLEASHClick here to get a copy and get more insights on prudence and how to cultivate it.

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