Have you ever heard that phrase? Most likely, you’ve heard that there are two sides to every story. You probably heard this phrase many years ago from a parent as a result of a disagreement with a sibling. Or perhaps when you’ve had a falling out with a neighbor, friend, or co-worker, and your spouse or other unbiased third party is attempting to propose a rational perspective or solution.
In the U.S. legal system, two opposing parties each have the right to state their case in front of a neutral third party including a judge or a jury.
But since the two sides are emotionally involved in their respective position, they do not have the ability to look at the situation objectively. And that is why the neutral third party is actually the third side to the story.
Robert Kiyosaki, author of Rich Dad, Poor Dad, explains that a coin has not two, but three sides: where you should strive to be is on the third side, the edge, so that you can consider the other two sides in a pragmatic, rational, and unbiased manner.
There are many circumstances or sayings in the financial world in which you would be well-advised to sit on that neutral third side:
When someone tells you that, “real estate is risky” but you also hear “the housing market is on fire.”
You may be told, “the stock market is safe” yet you know it has had recent volatility.
“Put as much as you can afford into your 401k,” says your boss; however, you remember reading how Ted Benna (creator of the 401k) denounced the convoluted mess it has become.
You hear “whole life insurance is bad,” but you know that more than 99% of term policies never pay a claim and you’ve never heard of someone who buys term and actually invests the difference.
Word on the street is, “renting is throwing money away.” However, you know that your friends recently took a bath on the sale of their house – where they had lived for 5 years – after a market correction, make-ready expenses, and commission.
You are told, “gold and precious metals are not worthwhile investments” when you’ve already seen your wealthy uncle’s private version of Fort Knox.
In future blog posts, we’ll take a deeper dive into each of these dichotomies.
In modern times, both information and opinions are available in milliseconds. We are constantly bombarded with data we don’t need and opinions we didn’t ask for. Electronic media removes much of the human side of communication, making it easy to think, speak, and respond in absolute terms rather than relative terms. Constructive discourse/debate often falters when we can’t sit across the table from someone and have a real conversation.
As you think about this, always strive to sit on the edge of the coin and filter out the noise and bias – so you can see the third side to the story.
Until next time,
Dr. Lee Newton
Disclaimer – I give ideas – not advice.
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References:
https://www.marketwatch.com/story/the-inventor-of-the-401k-says-he-created-a-monster-2016-05-16
https://www.entrepreneur.com/article/310731
