When we bring a dog into a human habitat, it’s easy to forget that your home is foreign to an animal’s instincts. If you want your dog to love you, understand its nature, and never use punishment. If you want your money to love you, also understand its nature.
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” Francisco d’Anconia
If you ever hired the services of a dog trainer, the first thing you learn is that you are the one being trained. The dog will always behave according to its nature, and respond to incentives. So does money. It is up to us to learn how dogs learn and how markets behave. These are the laws of identity and causality.
Positive reinforcement of your dog’s desired behavior is key. They learn by association and yearn to please their masters. While money is not a conscious being, both reward their masters when treated with respect, and degrade when punished. As owners, learning this will give meaning to money, markets, and a dog’s life.
What’s wealth but the means of expanding one’s life? I’m manufacturing time. Ellis Wyatt
During the client profiling conversation, you will discover the facts, values and aspirations of your client. In turn, they will learn how you reinforce their money with efficient markets and forward-looking performance measurement. Like punishing a dog breeds resentment, ignoring the price mechanism of markets will breed unnecessary sacrifice and investment risk.
All of this for the opportunity to pay higher fees for underperformance.
Training methods to beat the market, impose maximum risk tolerance, and over-diversification punish virtues. In contrast, positive reinforcement is the investor living the one life they have to the fullest, and maximizing the time needed to achieve that. You are the trainer, your client is the owner, and Fluffy is your client’s money.