Destructive patterns are bad habits. For investors they can be dangerous things. So why is it so difficult for us break them, when we probably know how much damage is being done?

Psychologists suggest that a habit can be created in 21 days – that’s why gyms and yoga classes offer three weeks free trials – you are far more likely to come back on the 22nd day if you have turned up the previous 21. So, imagine the power that a habit of thinking has over you. Where you might repeat a negative thought, hundreds – or even thousands – of times.

When we try to break that bad habit, we try to use will power to beat it. We hope that one strong opposing thought can beat the hundreds and thousands of negative ones, that supported our destructive patterns in the past. No wonder breaking habits is so hard.

The unpleasant truth

If you are not happy with your current reality, will power just isn’t enough. You need a process – a method of thinking – to first neutralise and then break destructive patterns.

The pain

When it comes to money, destructive patterns are easy to establish. We see it all the time:

– Constantly seeking the next get-rich-quick scheme some think, “This one is different”. It rarely is.

Out of control spending justified by believing that “I must have this – it’s really important”.

Rewarding themselves because “I deserve this now”,

Diving into investment ideas without doing the necessary research, “It’s a special opportunity.”

Getting caught by tips or advice from “the grapevine”.

For the one with the bad habit, it’s difficult because each situation has a different set of facts and the denial that there’s a pattern, makes it impossible for them to see the repeating errors. The pain is explained away by ‘bad luck’. They just don’t see it.

Change the thinking

When it comes to money, trying to change a limiting or destructive pattern cannot be done with will power. Accept that it won’t change and apply a process to eliminate the damage.

The process needs to create a gap between stimulus and response. By simply being aware of the source of the problem and exercising choice, a destructive pattern will first be neutralised and then eliminated.

A short trip into the past to recall and understand the experiences with money and the emotions they elicited will reduce judgement and create understanding of current beliefs and habits. At the same time, slightly more detailed thinking about what’s most important and what choices one would make if forced to do so, will create context.

To break destructive patterns, understand where they came from and what’s important and then make a choice not a decision.