5 Ways Joe Sangl Has FAILED With Money – Overconfidence In My Ability

I am writing this series partly to help people win with their own money, but also as a reminder to myself that money pitfalls abound and that we are ALL susceptible to falling into making a poor financial decision.

Part Two Overconfidence In My Ability

Have you ever saw someone who was really skilled at a particular craft and said to yourself, “I can do that as well as them.”?   I remember this happening to me when I had the opportunity to attend the Shell Houston Open PGA Tournament in 1996.   I had just finished my FINAL final exams of my college career, and I had the opportunity to fly to Houston and watch the PGA golfers tee it up at the Woodlands.   After four days of watching them swing perfectly, putt beautifully, and dress really well, I apparently became delusional and thought that I could golf just as well – so as soon as I arrived home, I went to the golf course.   I dressed really well.   The golf clubs were great – and nearly identical to many of the Tour players.   Then I made the mistake of swinging the club.   After spraying shots all over the golf course, I shot a 68 …   by hole #13.   I was overconfident.   What I had seen did not translate into ability.

This cost me financially when I made the decision to purchase a “fixer-upper” house.   My reasoning and logic was impeccable (or so I thought).   After all, my wife watched ALL of the home improvement shows.   She loved the shows – so she would love the opportunity to try her hand out at it – right?   Ummmm …

My brilliant thinking continued as I thought, “My father has built homes for 50+ years so surely I will be able to this basic remodel work.”   Ummmm …

Of course, I was dreadfully wrong.   I discovered that in real life, home improvement projects took approximately 4 billion years – not 30 minutes like the TV show.   I also discovered that I was very limited in my own skill set.   While I knew what needed to be done, getting it done (and done well) was a much different thing.

The end result is that we got to spend THOUSANDS of extra dollars due to my overconfidence in my ability.

PROBLEM: Overconfidence in my ability

SOLUTION: 1) Seeking counsel when I realize that I just don’t know   2) Listening to my bride   3) Write down the actual costs of repair and then multiply it by two

Has overconfidence in your ability ever caused you to fail with your finances?   Share your story!   It will help us all learn, and it might even be a little therapeutic!

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1 Comment

  1. Randy on May 25, 2011 at 5:56 am

    – listening to my bride – I can think of a few times when that saved me big time:

    – Like the time I wanted to invest in an ostrich farm (it sounded a lot better at the time and I can still name you 10 reasons it’s a good idea).

    – Like the time I asked her what she thought about a good stock pick (she wisely realized I wanted to play, limited my investment to what I could afford to lose and watched me do “ok” – not great, not lousy – it satisfied my curiosity without making us broke).

    – Sometimes I have to remind myself one of the reasons God allowed her into my life was to temper my judgement.

    As for write down the cost and multiply by 2, we used to use the actual accounting method for computer capacity planning at a company I worked for. We would ask the development team how many transactions they estimated, multiply by 2 and add 10%. Oddly enough, we were typically close. I use it for estimating all kinds of things now, like home improvement (especially plumbing).

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