Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Friday, 9 November 2012

Can financial behaviours be changed instantly?

“A year from now you will wish you had started today.” - Karen Lamb
Back in the 1970s Richard Bandler and John Grinder developed what they christened Neuro-Linguistic Programming or NLP – a combined approach to communication, personal development and psychotherapy.
As the title suggests NLP recognised a connection between the neurological processes (N), language (L) and behavioural patterns that have been learned through experience or programming (P). They suggested that these can be organised to achieve specific goals in life.
Of course, NLP has had its critics and faced a huge backlash from the analysis industry, but to my mind there is no question that it is possible to change certain behaviour patterns quickly.
Associations and changing habits
Anthony Robbins took the ideas of NLP and shaped them slightly into a technique he trademarked as Neuro-Associative Conditioning or NAC.
There can still be a place for Freudian psychoanalysis and other ongoing in-depth analysis of attitudes to personal finances. After all, it’s well known that those who are uncomfortable with success are prone to finding routes to self-sabotage, so it can definitely make sense to understand the root causes.
Robbins talks of mixed neuro-associations leading to financial problems. One the one hand money might mean to you more freedom, choices and an ability to contribute. But on the other hand you might associate having more money to working harder, higher taxes or being seen as greedy.
Mixed associations tend to lead to mixed results.
Regardless, what Robbins and the NLP crowd also argue is that through using powerful tools and techniques financial behaviours can be changed overnight.
In my experience this is to some extent true, but only where someone believes that something must change, they believe that they can change it and that they themselves are responsible for actioning the change.
There are 5 steps that must be undertaken in order to change behaviour patterns. Let’s consider how these might apply to personal finance and investment:
1 - Decide what you want
The first step is to define what it is you want to achieve. In virtually every case, people have one of two goals: to change a behaviour pattern or to change the way they feel about something.
When it comes to finance and investment, this usually means improving financial habits and money being something which brings pleasure instead of stress.
2 – Use the pain/pleasure principle
Possibly the most important step in changing behaviour patterns is to associate pain to the old behaviour and pleasure to the new one.
If frivolous spending is your Achilles heel then you must be able to associate pain to wasting money on items you don’t need and pleasure to acquiring assets which will be of long term value to you.
3 – Interrupt the old pattern
One of the problems with behaviours that have been repeated is that the repetition makes them hard to break. Thus, you need a strategy to stop the old behaviour pattern in its tracks when it inevitably surfaces.
In my case, no question, the behaviour pattern I had to move away from was massive Friday and Saturday nights out on the town! A hard one to break, indeed. I knew I had to interrupt the pattern so I took up a 2-hour Friday night gym session.
4 – Introduce an empowering alternative
Interrupting a pattern is great to stop old behaviours surfacing, but what we really need is an exciting new alternative to work towards.
For me, the Friday night gym session worked reasonably well as a circuit-breaker, but it’s hardly in itself an exciting and empowering alternative.
Instead, I set myself a new goal: building a huge investment portfolio and becoming the number one investment expert and finance writer in Australia. A big goal? Sure. But it’s also definitely an empowering alternative. 
Choose your goal. Do you want to be a skilful share trader? To own 25 properties? To be a millionaire? To be able to pay for your kids’ school fees? Make it as specific and exciting as you can!
5 – Repeat the new behaviour until it is consistent
The fifth and final step is self-explanatory. Repeat the new behaviour often enough and eventually it will become the new pattern. Repetition is the mother of skill.
Can change happen in an instant? Why not give it a try?