February 9, 2022 – I find myself, like many Americans, watching the Winter Olympics and the spectacular performance of skill put forth by Olympians from countries around the world. We share the anxious moments when the skiers, snowboarders, and skaters await the judges’ “scoring” to determine how their performance ranks on the leaderboard. The results of some events come down to sheer speed, such as bobsleigh, luge, and downhill, or vertical distance like ski-jumping. And then there are other sports like ice hockey and curling that pit one team against another, with the highest point scorer being anointed the winner. The Olympians compete for medals – bronze, silver, and gold – which, to me, translate to “good,” “better,” and “best.” There is a move to make Olympic scoring more objective, using more criteria with specific rules for the judges. Achieving the “perfect 10” is extremely rare, but it often drives the Olympians’ training effort.
Our mission with clients is to teach, advise and guide them towards their optimal life. Success in this endeavor is much more challenging to measure than performance in the Olympics. Firstly, life success is an individual result that makes a comparison to others meaningless. Unlike a sport, the rules of life frequently change, making objective success criteria tough to define and even harder to measure. And while seeking perfection in an Olympic performance is a worthy and admirable effort, achieving perfection in life is impossible. It’s part of what makes us human. The flaws and imperfections make each of us unique, which is the inherent beauty of our lives.
Many studies indicate that those who set their sights on perfection will always be unhappy because no one can achieve it. Happiness is probably the most critical outcome of an optimal life, and my simple definition is Happiness=Results-Expectations. You will never have a positive score when you expect perfection – consider the math.
Do perfectionists get in their own way?
No matter how much you feel that striving for perfection will help you succeed, it is not a helpful trait and often, not a healthy one either! I have noticed certain tendencies exhibited by clients who strive for “perfect finances.” Not every perfectionist will do all of these things, but all of them can be counterproductive.
Struggling to make decisions or take action. Perfectionists are motivated to make the absolute best choice — even when doing so isn’t strictly necessary, leading to decision paralysis. We often see this in our estate planning reviews. Couples with small children need a will and to specifically appoint a guardian for their minor children, should they not be able to parent due to death or disability. This designation could be a point of contention that prevents progress on all other critical estate planning objectives. The absence of documented wishes will invite the judicial system to step in and make decisions on your behalf – often at odds with your wishes.
Searching for the perfect solution prevents you from making good decisions now. You could “settle” for silver or bronze and move on!
Worrying excessively about sunk costs. Since perfectionists tend to ruminate over even tiny mistakes, they’re strongly motivated to attempt to recover situations involving sunk costs. We experience this when clients disagree with our recommendation to sell an investment because they feel “it will come back” or “I don’t want to take a loss.” Sunk costs, or money already spent, has a psychological attraction to those seeking high achievement despite the logical approach, which suggests that another investment might do better or explaining that you have already lost your money regardless of whether you sell or not!
On a smaller scale, I often encounter the “sunk cost” tendency with subscription services. I am personally a “poster child” for this activity as I continue to pay for Audible, convinced I will “catch up” despite having 11 credits and five unread books. I also renewed a subscription to Master Class despite not attending one whole class in the initial subscription year. And don’t get me started on January gym memberships.
Avoiding challenges to avoid failure. Perfectionists want to feel absolutely ready before taking on challenges, which can lead to holding back from advancement or leadership roles. For example, you may not be willing to make a big presentation because you “need to take a public speaking course” even though it may not be necessary nor something you will do anytime soon.
Perfectionists sometimes have difficulty with technical roles that require client contacts, such as advisory or client service roles. These roles typically cultivate ongoing relationships, and the thought of providing incorrect information is frightening. Continuing to learn in isolation, and avoiding personal contact, allows perfectionists to stay within their comfort zone.
As a result, avoiding a challenge to minimize the risk of failure is a costly tendency because there is nothing more expensive in life than a missed opportunity!
Applying your high standards to others. Perfectionists tend to apply their extremely rigorous standards to only themselves for the most part. However, there can be some bleed-through where the perfectionist also expects others to conform to their standards, which can cause significant miscommunication, especially if the standards are unrealistic or misguided.
In our professional relationships, we know that clients view their investment portfolio performance compared to their expectations. Their expectations come from various sources, notably the financial press, the internet, financial news channels, or the infamous “friend of mine.” Some clients have low expectations and often are not very concerned about short-term volatility. Others appreciate the uncertainty inherent in the capital markets and realize hindsight is always 20-20. Then some people genuinely believe there is a level of certainty that should allow their investments to meet an unrealistic expectation to avoid losses, or at least consistently outperform all others. They want to go for the “gold” every quarter, year, or longer.
If they consistently fall short of their lofty expectations, perfectionists can become frustrated and quickly arrive at sub-optimal decisions. Decisions driven by either fear or greed tend to result in a buy high/sell low investment strategy and a continuation of the downward spiral.
Is my perfectionism healthy or hurtful?
Here is some guidance on how you might assess your perfectionism:
Characteristics of healthy perfectionism:
- Striving for high but achievable standards that result in feelings of satisfaction and increased self-esteem
- Matching your time and energy to tasks that match your strengths and interests
- Having a sense of what you value, and what your priorities are, and devoting the lion’s share of your time and attention to these areas
- Reaping payoffs from your efforts that are greater than your costs
Characteristics of unhealthy perfectionism:
- Repeatedly setting goals for yourself, but never achieving them
- Constantly competing to be the best at everything to avoid feeling like a failure
- Giving in to the feeling that all mistakes are catastrophic
- Getting stuck in believing that one particular strategy must pay off, instead of trying others
What perfectionists can do to change
If you’ve had a “that’s me” experience reading this article so far, the following paragraphs offer some practical solutions for minimizing the downsides of perfectionist tendencies.
Learn from successes. The idea of learning from your mistakes is likely to feel too confrontational to a perfectionist and may trigger negative feelings. So, turn your focus to your accomplishments and reflect on the positive outcomes, despite not doing everything entirely flawlessly or going in with a 100% chance of success. It will allow you to achieve some “muscle memory” and become comfortable with wins that are “good enough.”
Develop decision-making criteria to enable faster decision-making and action-taking. This comes in handy when guiding clients on an important decision such as buying a house, helping a child pick a college, or deciding to buy or lease a car. The essential trick to this method is to think about and document (yes, a list) the three most critical factors that will guide your decision before any research or shopping begins.
When the time comes to decide, pull out your criteria lists and segregate the alternatives that meet all your criteria. If there is one selection, you will have an answer. If there are no selections, don’t choose from the remaining selections. Start the research over. And if you are lucky enough to have multiple choices that meet your criteria, flip a coin to decide and then try to imagine why it would not work for you.
Ask yourself, “How could I improve by 1%?” This is a popular approach that’s especially useful if you’re prone to overcomplicating solutions to problems. Because perfectionists want to be flawless, they’re typically dismissive of incremental gains. We often see this when clients are looking to curtail spending or eliminate excessive debt. Rather than going for “gold,” visualize making the qualifying heat. Seek out the low-hanging fruit of spending – you know, the customary, almost mindless, things you buy. Pay off the credit card with the lowest balance and then redirect the payments to the card with the next smallest balance.
Maybe you aim to become more optimistic. Keep a log of all the opportunities or challenges you face during the day. Pick out the ones that you handled with a positive approach. If there were none, ask yourself whether being optimistic might have yielded a better or quicker outcome. This self-reflection will become part of your decision-making process by starting with a positive thought, a happy emotion, and a remarkable result. By looking for how you can improve your behavior by 1%, you’ll start to see that there are easier ways to improve than what you’re imagining.
Life can be a difficult journey but one that can be so rewarding. Try not to always set your sights on the “perfect 10,” the gold medal, the highest grades, the best portfolio, the perfect credit score, or living like a “Stepford partner!” It’s impossible to achieve, so why set yourself up for failure? Leave yourself some room for error. Mistakes are a way of life and nature’s best teacher. Change is the only constant we face. Set reasonable expectations and do the best you can.
Remember, HAPPINESS=RESULTS-EXPECTATIONS.