Financial Dogma

Kristine Hayes

I’VE BEEN TRAINING dogs for nearly 30 years. I’ve won enough awards in dog competitions to wallpaper my office with rosette ribbons. My 15 minutes of fame also involved dogs. Almost 20 years ago, I appeared on an episode of The Tonight Show with Jay Leno, where one of my corgis happily demonstrated his ability to ride a skateboard.

Just as there are many ways to skin a cat, there are also many ways to train a dog. I’m always trying to improve my training techniques. I spend a great deal of time reading and learning from other dog trainers. One insight I recently came across attempted to summarize the basis of all successful dog training techniques: The hope must outweigh the struggle.

Simply put, when training a dog to perform any new behavior, the dog must have a reason to do what is asked of him or her. In most cases that reason is the hope of receiving some type of reward, such as a piece of food. But if the struggle to perform the behavior outweighs the final reward, the dog will shut down, refusing to put any additional effort into the behavior.

I began to think about the notions of struggle and hope as they pertain to personal finance. I remember in 2008 when the Great Recession meant watching my retirement account balance plummet in value. After years of setting aside a portion of my paycheck, I was suddenly left with an account worth a fraction of what its value had been just a few months earlier. At that point, the struggle to save outweighed the hope of ever having enough money to retire. The result: Over the next couple of years, I purchased a new car and two new all-terrain vehicles, and I spent tens of thousands of dollars renovating my home.

A few years later, I was living as a divorcee. Unsure if I’d ever be able to retire, I began setting aside nearly 50% of my salary. I educated myself about investing and eventually transferred a large portion of my portfolio into higher-risk mutual funds. As I started to see my account balance grow, I felt hopeful about my future. Instead of spending money, I became obsessed with figuring out how to save even more. The hope of having a modest nest egg more than outweighed the struggle of living frugally.

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