Three Words Create a FAB Idea

Editorial Note: Today’s essay comes from a long-time friend of The Oxford Club: entrepreneur, author and investment publisher Gary A. Scott. Believing that everyone should “turn their passion into profit,” he helps his readers gain a lifestyle of global mobility, fulfillment and freedom. Below, he explains how to create a more fulfilling life in the here and now. We hope you enjoy.

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Here are three steps we can take to have a fabulous lifestyle.

These steps, which can create a fab future, can be summed up in three words: “Change… our… perception.”

My first car was a powder-blue ‘58 Chevy. It seemed like a great car… at the time. But I wouldn’t want to drive it (even if it were new) today.

We tend to look at the past through rose-colored glasses. The past becomes the “good old days” even when those days were not so good. This rosy tint is created by a form of memory bias called “fading affect bias,” or FAB. FAB is caused by a neurobiological reaction in many mammals. It makes positive events in our past more vivid than negative events. So as time passes, we remember the ones that made us feel good more than those that made us feel bad.

FAB is great in some ways. Dwelling on past negatives (except to learn and improve from them) doesn’t get us anywhere. Not to mention how “downer thinking” doesn’t feel good.

The downside is that FAB allows us to fool ourselves into making errors – such as thinking that returning to the past will make the future better. It can rob us of the excitement and adventure of living in such wonderful times of opportunity right now.

For example, a recent Wall Street Journal article – “Economists Disagree With Voters Who See U.S. Worse Off Today Than in 1960s” – reviews a poll that asked if life in America is better today than it was 50 years ago. 46% said things are worse now, while only 34% said they’re better.

Yet 88% of economists from a sister poll said the U.S. is better today than in 1960, and 87% see it as better than 1980.

The facts are clear. Industrialized society has seen a sixfold increase in wealth in the last century. Almost everyone is richer even though most of the world has become more cynical. But modern communications allow us to better see growing discrepancies between the rich and poor. And that clearer picture of reality creates anger, turmoil, hatred and war.

There are many factors that make it seem like the quality of life has declined in the past few decades. Wages and available jobs have deteriorated for some groups, especially men without high school diplomas and men working in manufacturing. This is a large group, so this change is often covered in the news.

Moreover, uncertainty is far higher. Americans may be overall wealthier than in the past, but faster change and destructive technology have created more uncertain times in the labor market. There are not many “cradle to grave” jobs left. This might seem like bad news for those who have forgotten the messages contained in The Man in the Gray Flannel Suit, the story of a WW II vet dealing with a changing society.

Plus, the technology of connectivity actually makes the world a less connected place. Our interactions with so many businesses are now done through computers, recordings, algorithms and websites instead of with people. No matter how good these contacts are, none really equate to a human voice that asks, “How are you? How can I help?” and means it.

When we’re turned into numbers instead of names, and when we lose human contact, we feel caught in more of a hostile, frustrating, uncaring habitat.

There’s also the difference between the rich and poor everywhere that makes many people unhappy. The U.S. has one of the worst discrepancies between the top and bottom 10%. This is good if you want to be really rich. The U.S. is a great place to grow wealthy, but we Americans need to reduce this income discrepancy.

Yet, even so, the fact remains that wealth is growing around the world and that U.S. standards and growth are among the best.

Here are three ways to change our perceptions so we can enjoy and profit from the “good now days”:

No. 1 – Realize that it’s human nature to look at the past through rose-colored glasses and to resist change. We can avoid making this error and look for ways that such incorrect thinking creates value in the here and now.

No. 2 – Measure the here and now with factual mathematical terms instead of drama-laden daily news. Use financial information instead of advertising-driven economic news.

No. 3 – Look for and at the current successes all around us instead of focusing on failures. We should try to understand why these successes are working now, and look for ways to incorporate such lessons into our lives.

These three steps can help us create a FAB lifestyle of excitement, adventure and fulfillment right now.

Gary

P.S. My “Purposeful investing” (Pi) course has helped subscribers overcome stress, worry and fear about the markets. This course is based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists. It’s quite simple: When we invest with purpose – doing what we love – and when we believe in the basic mathematics of value, we enjoy the process more and gain the ultimate form of financial security. To learn more about Pi, click here.