As I am spending more and more time thinking about our finances, and plotting how to best plan for the future, I have come to the inescapable conclusion that the major barrier between us and financial success is the fact that we're total 'fraidy cats. Or, in the parlance of economics, we are extremely "loss averse."
My husband and I have many positive qualities when it comes to financial decisions: we are happy to live below our means, and have never had problems with overspending; we are relatively similar in our approach to money, which has saved us so far from polarizing around saver/spender roles; we are both strongly swayed by rational arguments, so we are usually able to agree on a course of action once we've discussed an issue; and we are good at talking to each other about the emotional and logical components of money stuff.
However, we are also similar in being naturally very loss averse. As I have been reading more and more on the subject, I recognize and (I think) am internalizing that the fundamental basis of financial growth is taking an acceptable amount of risk to reap larger benefits. However, even as I slowly convince my emotions that we are taking unbearable "losses" by keeping so much of our money liquid instead of allowing it to grow, we as a couple have much more inertia to overcome on this front, since my husband is even more naturally loss-averse than I am.
In my next post I am going to brainstorm ideas to help us get more comfortable with risk. This blog is already a great tool, because it will force me to be accountable month by month for how fast our net worth is increasing, and hopefully face the consequences of our conservative strategy. I would really appreciate any advice or ideas that you might have to help us get into a better mindset so that we can make good financial decisions. Help me blogosphere.... You're my only hope!