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Dan's new book for millennials, Wealthier: The Investing Field Guide for Millennials, will be published on May 15, 2024, and available on Amazon.
I’m a contrary person. I’m not sure how I became one. Perhaps it's a combination of my background and legal training.
As I look back on my life, while I’ve made many mistakes, the decisions that made a substantial positive change in my life were contrary:
- When I asked for input about writing the Smartest Investment Book You’ll Ever Read, almost no one supported the idea. The initial reaction to the book was derision. But it became a NY Times bestseller and launched my writing career.
- When I provided funding for a new venture founded by an engineer who was broke and suffering from an incurable illness, everyone I consulted told me I was “nuts.” The company is now in its third decade of profitability and continues to expand.
- I left two “secure” positions: one with a large international company and the other with a major law firm in NYC. My motivation was to work for myself. In both cases, the advice I received was that leaving those “secure,” high-paying jobs with prestigious employers was irresponsible, mainly because I was married with two small children. The company and the law firm subsequently imploded and are no longer in business.
Definition of contrary personality
Wealthier:
The Investing Field Guide for Millennials.
Why have so many financial advisors agreed to review an advance copy of Wealthier: The Investing Field Guide for Millennials. It empowers millennials to be responsible DIY investors and financial planners. You can see some of their reviews here.
Wealthier will be published in May 2024.
Here’s what one advisor said: "Saplings grow into trees. We need to help the next generation of investors get to where they need our services."
For more information, visit the website for Wealthier:
To review Wealthier send an e-mail to: [email protected]
What is a contrary personality?
It refers to someone who doesn’t shy away from taking a different perspective from the majority. Contrarians tend to be skeptical of widely accepted beliefs and are more likely to resist conforming to popular opinion. While too much contrarianism is problematic, a healthy dose fosters original thinking and positive change.
I often hear phrases like "don't be difficult" or "just go along with it." Society tends to value agreeableness and conformity. But psychological research shows there can be significant benefits to having a contrarian streak – frequently questioning the status quo and taking the opposing view.
Here are some of the benefits of being a contrarian.
Open to novel ideas
An upside to being contrary is increased cognitive flexibility and creativity.
One study found contrary people are more likely to adopt new technology than those who conform. Those who follow the herd are called “mimetic.” They resist adopting new ideas.
Better decision making
Contrarians make more discerning decisions because they are less susceptible to biases like the bandwagon effect – the tendency to do something primarily because others are doing it.
Contrarians scrutinize information thoroughly instead of "going with the herd." They are critical thinkers who search for reliable information sources and make decisions deliberately.
But as Ben Carlson pointed out in this insightful article, contrary investors are often wrong because opportunities like those glorified in Michael Lewis's The Big Short are uncommon.
Promotion of change and progress
While contrarians sometimes get pegged as naysayers, their role in questioning assumptions and norms propels change and progress. Many of history's greatest inventors and pioneers were contrarians who defied conventional wisdom in their fields.
As the French mathematician, physicist, and chemist Andre-Marie Ampere observed, “By combining random simple truths with each other, more complicated ones are deduced from them. This is the method of discovery, the special method of inventions, contrary to popular opinion.”
Famous contrarians
All contrarians are not successful, but there are many famous ones, like:
Jeff Bezos
Mark Zuckerberg
Steve Jobs
Bill Gates
Warren Buffett
Reed Hastings
They took the path less traveled, unburdened by convention. Their other traits are nicely outlined in this article.
How to use a contrarian mindset
Here’s how you can use these findings.
Investment strategy
You can encourage clients to consider contrarian positions that deviate from popular sentiment or market-herding behavior. This could mean advising them to buy assets out of favor, avoiding hyped investments, and maintaining diversified portfolios even when markets rally in one area.
Reduce biases
Train clients to recognize cognitive biases and groupthink tendencies, which often lead to poor decisions. Processes that consider contrarian viewpoints can counteract the human tendency toward conformity.
Improve decisions
Integrating contrarian voices and alternative perspectives into the advisory process improves decision-making. Seek dissenting views within your teams or bring outside contrarians to poke holes in plans.
The goal is to conduct a rigorous analysis from diverse viewpoints rather than uncritically accepting the popular or internally favored position.
Innovative solutions
By staying open to contrary views, you’ll be better positioned to explore innovative products, strategies, and solutions rather than just defaulting to conventional offerings.
The tendency of contrarians to question assumptions sparks new advisory services or modernizes client experiences, which differentiates your practice.
Contrary clients
For clients who exhibit contrarian personalities, adapt different communication and education approaches. These clients may be more skeptical of generic advice or mainstream strategies. Engage their contrarian mindset by listening carefully to their views. Doing so could build trust and confidence.
Final thoughts
Harness contrarian perspectives in a discerning manner – don’t be contrarian just for the sake of it. Financial advisors and their clients will improve decision-making, reduce biases, and identify lucrative opportunities the crowd misses by incorporating some level of contrary thinking and dissenting voices.
While agreeableness has merit, developing a measured dose of contrary thinking sharpens our decision-making, spurs innovation, and fosters needed change. Contrarians expand possibilities by judiciously going against the grain rather than narrowly conforming to the status quo.
Dan coaches evidence-based financial advisors on how to convert more prospects into clients. His digital marketing firm is a leading provider of SEO, website design, branding, content marketing, and video production services to financial advisors worldwide.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Here’s what one advisor said: "Saplings grow into trees. We need to help the next generation of investors get to where they need our services."