There’s No Ozempic For Financial Decisions

Did your New Year's resolutions include a plan to start a diet? Mine never does because ​I’m skeptical of any diet or exercise craze because they all end up more or less becoming fads.

This is why I could never get behind the idea of buying stock in Peloton, even though I know many happy users of their product. Sure, some people will buy it and use it regularly. Others will buy it, use it and then stop using it. Some will buy it and never use it. Regardless, there is always another piece of equipment or exercise routine that comes along.

​When it comes to diets there are plenty of them that can work. The problem is not necessarily the diets themselves but the behavior required to stick with them.
One study estimates some 95% of all people who lose weight on a diet gain it all back eventually.

It’s for these reasons I didn’t pay much attention to the Ozempic and other GLP-1 studies as those results began trickling in. But the more I learned about it the harder it became to ignore. Not only were people reporting weight loss of around 15-20% of their body weight but they weren’t craving as many salty or sugary foods. People feel fuller on the drugs. It lowers heart disease. I went from being skeptical to thinking this was some sort of miracle drug. I’m sure there are some side effects and other issues that take away from the miracle label but the potential ramifications here are enormous.

If the price comes down and a decent percentage of the population begins taking these drugs there is going to be an impact on the agriculture industry, fast food, packaged food companies, the healthcare industry and probably a dozen other industries I can’t even think of right now. I’m not smart enough to sift through all of the potential winners and losers if this happens but this could be real a game-changer.

Reading about these drugs and the impact they are having got me thinking about how this relates to your finances.

There are no miracle drugs that can help you make better financial decisions.

You can’t take medicine to save you from FOMO during a bubble.

A doctor can’t write you a prescription that will make you feel less envious of the Joneses.

You can’t get wrapped in a full body cast that will prevent you from panic-selling your stocks during a bear market.

No amount of physical therapy will take the pain away when you go into debt.

There aren’t any surgeries to remove the feelings of greed and fear you get from watching your portfolio move up and down during the different market cycles.

You get the point.

The good news is there are differences between physical health and financial health. I know diet/exercise makes for a good personal finance analogy but it’s much easier to change financial behavior than it is to change your habits when it comes to eating and exercise. 
You can’t automate your physical health. Sure, you can plan out your meals and when you’ll go to the gym but you still have to follow through with it. But you can automate the majority of your financial decisions. Bills can be paid automatically. You can pay off your credit card balance every month without ever thinking about it by setting up auto-pay. Every time you get a paycheck, you can have funds automatically directed to different accounts for saving and investing — your RRSP, TFSA, your children’s RESP, etc.
And once the money hits those accounts it can be invested automatically exactly as we desired – by a team of professional money managers that purely focuses on selecting the best quality companies. Portfolios can be rebalanced automatically – taking the emotions right out of the equation.

Maybe someone will create a drug that turns us all into robots in the future but for now, there is no way to take the emotions out of your finances. Your emotions aren’t good or bad, right or wrong. They just are. But you can make good decisions ahead of time so you’re not forced to deal with those emotions at times when they can ruin your financial plan with a boneheaded mistake.

I spend very little time on my own personal finances because 95% of it is set on auto-pilot. Bills are paid. Contributions are made. Investments are bought or sold. My portfolio gets rebalanced. I take the emotions out of investing. I keep on buying – every….single….month….no matter what.
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I still have to make course corrections along the way and check in on occasion to make sure everything still makes sense. But technology makes it easier than ever to take the worst parts of yourself out of the equation when it comes to financial decision-making.
The only side effects of automating good financial decisions ahead of time are rising portfolio balances, higher credit scores, increased savings balances, and more time to spend on the things you actually care about. Sounds better than a New Year's resolution, if you ask me...