Last week, you may have read my post about the situations or contexts where you can earn the title of “sucker.” In one of those situations, I allowed a relative to walk away with thousands of dollars of my hard earned student savings. In this blog I will discuss the beliefs or habits that make people victims. There is one good reason why you should understand those beliefs and habits. Understanding and practicing these principles when planning your finances will keep you safe from predators. There are people who make a profession of spotting suckers and relieving them of their cash. They know what to look for. They can spot a sucker in a crowd.
Now lots of people lose money without being suckers. Sometimes they are unlucky. Sometimes, they just get their timing wrong. What makes a sucker is that he fails to do his due diligence and fails to think things through. When the sucker makes a bad deal, he is likely not listening to that little voice in the back of his mind saying, “don’t do it.” With the right beliefs and habits, that little voice that keeps you safe gets a little bit louder.
Unless you want to be a sucker, here are the eight key beliefs or habits you need to have:
1. Do your research so that you know what you are getting into. Don’t be naïve. Ask yourself, “why am I doing this?”
2. Maintain an accurate view of the world around you. If you stubbornly insist that the world works a certain way, and it doesn’t, you will lose. Check to make sure your choices make sense, are working, and won't have any negative consequences such as interfering with responsible financial planning.
3. Don’t trust authority. Question the experts. Experts exist by taking advantage of suckers.
4. Screen out the emotional words in a sales pitch. (“This is insanely cheap.” or “This is the deal of a lifetime.”) Calm decisions are the best decisions. Emotion clouds judgment.
5. Don’t rush your decision and take your time. Don’t give in to high pressure tactics that require you to act immediately.
6. Know yourself and your vulnerabilities because others around you know them better than you. Predators watch for your blind spots. They may use flattery, criticism, companionship or sexual attraction to get past your defences. They may exploit your eagerness to impress others or your interest in saving face.
7. Test your decisions with someone you trust before you buy. A second set of eyes might guide you away from the sucker trap.
8. Don’t be afraid to ask “stupid” questions. I once had a neighbour come to my home. She tried to sell me shares in an income tax shelter that was illegal and highly risky. My tax refunds over two or three years would have been enough to pay off our mortgage. “Is it safe?” I asked. The predator, dressed in a lovely outfit flashed her eyes and said, “Of course it’s safe; we have set aside legal fees to fight the government.” As I walked her to the door, I reflected, this is one time I escaped the role of a sucker. If you feel ashamed to ask a reasonable question, you are likely face to face with a predator.
Your beliefs and habits are the biggest factor in whether you belong to the sucker club. By changing these beliefs you can take the steps you need to keep yourself safe. If you have become a "sucker" you can get professional financial coaching to help repair your finances from your local non-profit credit counselling service. Trust me, I am a recovering sucker. I’ve been there.