While many aspects of our lives have slowed down a bit these past few weeks, one thing that hasn’t abated is the ever-increasing flow of information. But how do you focus on the signal versus noise?
Regardless of how you think of or categorize this information in your mind as news, opinion, advice, or something else, I consider much of it – maybe most of it – to be noise.
But how do you distinguish the signal versus noise?
In other words, how do you figure out what to pay attention to and what you can (or should) ignore?
While of course, I naturally think of this from a financial information and advice perspective, it also has much broader application.
For instance, who do you believe about the Coronavirus?
Is it the World Health Organization, the CDC, your doctor-friend on Facebook, cable news, Republicans, Democrats, or some other person or organzation?
Recently, I wrote about models and how they’re all wrong.
But which model do you keep your eye on? Which do you believe is best?
I’m not here to point fingers and claim I know who is right.
Should we be opening things back up like what’s happening here in Georgia?
Should we keep things locked down for another few weeks or months?
I’m sure you have your own opinions about this.
But regardless of what you believe, there is no lack of information out there contributing to the overall level of noise.
And it’s up to you to find the signal – the truth, or as close to it as we can hope to get – and filter out everything else.
The same holds true with your money and financial decisions.
You need to focus on the signal despite all the noise.
Between financial “news” networks, social media, that friendly person at church, your friends, and even your family, it can be a challenge to figure out who to listen to.
And who to ignore.
Clearly, your friends and family mean well and want what’s best for you. But just because something worked for them doesn’t make it the best thing for you to do.
And don’t worry, I’m not here to tell you that I know what’s best for you either.
But I can tell you that through the process of developing, implementing and monitoring your personal financial plan, it can become your own, unique signal among all the noise out there.
Rather than falling prey to the dangerous game of comparing yourself to others or moving randomely from one opinion or information source to the next, your financial plan can be your personalized signal, designed to reflect what’s important to you today and where you’re going tomorrow.
So next time you’re confused or even overwhelmed by the amount of noise coming at you from all sides every waking moment of every day, remember there’s a better way.
And it starts with your personal financial plan.