One of my passions
in life is to model things. When I’ve modeled different aspects
of human excellence, I’m always amazed at how people seem to be
almost hard-wired to do things the wrong way. Let’s look at a
few examples:
I first modeled the
trading process and the Peak Performance Home Study Program was
born as a result of this. And, what I discovered was that most
people do all of the wrong things almost naturally. For example,
they tend to cut their profits short and let their losses run.
They focus on picking the right stocks (and being right about
them) as opposed to position sizing and exits. They get emotional
about their trading. The list could go on and on and all of it
appears to be some form of self-sabotage.
Trade Your Way to
Financial Freedom came
about as a result of modeling the area of trading that seemed to
be the least psychological—system development. I wanted to know
"how do traders developed good systems." And, once
again, I discovered that most people do all the wrong things. It’s
almost second nature to them. For example, they concentrate on the
entry portion of system development, often to the exclusion of
critical items such as exits and position sizing. In fact, this
bias is built right into most of the commercially available
software for system development. That software is designed to
optimize historical entries and will not even permit decisions
that have to be made simultaneously at any given moment in time
such as position sizing decisions. Trade Your Way to Financial
Freedom listed 25 different psychological biases that affect
trading system development and all of them are basically some sort
of self-sabotage.
Most recently, I’ve been
interested in modeling the wealth process. The wealth process is
so simple that almost everyone, including those with a minimal
education, can become infinitely wealthy. However, most people do
everything they can to prevent that from happening. They go deeply
into debt to obtain "consumer items" on credit. And that
process starts as soon as they earn money, perhaps even earlier if
they are in college. Furthermore, when they become successful,
most people simply go further into debt because they can afford
more debt. As a result, you often...
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In last month’s
issue of Market Mastery, we examined two models for
self-sabotage. The first model, I called the Matrix model after
the movie by the same name. In that model, we are assumed to be
programmed to perform the way we do and to lead our lives the way
we do. Most people are unaware of that programming, so they act as
if everything is normal. However, if you realize that you are
programmed, then you can reprogram yourself to perform at
super-human levels, just as they did in the movie, The
Matrix.
We looked at a
number of different techniques for reprogramming and they all
involve transforming some belief that we’ve adopted that’s not
very useful. However, if we look at the underlying assumptions of
what they are doing, the assumptions are not too sound.
For example, are we
given our beliefs or do we choose them? Are we creative, spiritual
beings or are we robots? If we are robots, then who programs us?
And even if we can reprogram ourselves, isn’t that some sort of
choice? Doesn’t that suggest that perhaps there is a better
model?
The second model
that was given is, in my opinion, a better model. It is the
Creative Model. (See Figure 1 on Page 2). Basically, this model
says that we form a belief that creates our experience.
Self-sabotage occurs when we don’t want to have the experiences
that we create from our beliefs. Once created, however, we
typically disown our creations and give them power. And what you
resist tends to persist, thus giving them even more power. They
become solid and real.
Just to refresh
your memory, Figure 1 presents the Creative Model for
Self-Sabotage. Remember in this model, you create your experience,
but simply are NOT willing to experience your creation. Instead,
of thinking, "I created this experience," you simply
think that this happened to me and resist it. As a result, you
give it your own power.
Incidentally, the Creative Model
was totally made up. It’s just a model, but it is also an
example of the model itself. For example, if you believe it, then
it becomes real for you. I prefer to simply say, "It’s
useful." In addition, this model, if correct, also validates
the Matrix model. If you believe...
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