Does Your Lizard Brain Control Your Money

iPic courtesy DavidDennis @ Flickr

Pic courtesy DavidDennis @ Flickr

There’s a killer on the road. His brain is squirming like a toad.
–Jim Morrison

Remember Jim Morrison? He was the Lizard King.

Seth Godin says that being king of your lizard brain is a good thing. For Seth, the lizard brain is that deep, dark shadow of the evolutionary past. It’s the part of the brain that squirms with the fear, fight,  flight, and fornicate responses.

Even though the lizard brain hasn’t been called on to lead us out of sticky situations involving bears and mastodons in thousands of years, our lizard brain still pumps out signals of imminent doom and demise in the form of resistance.

Resistance, according to Godin, leads to compromise and failure. (Steven Pressfield talks about it here, too.) Resistance and compromise have implications in personal finance.

Maybe the best example of the lizard brain in its full financial terror is the recent market crash. The market moves became so irrational that bad stocks increased in price and good stocks sank. Down was up and up was down.

But other personal examples exist. The lizard brain is likely behind your strange buying and selling decisions: running up credit card bills, waffling over starting a retirement account, and moving in and out of losing investments are some samples of the lizard mind in action.

Recognizing your lizard brain is the first step. To master it, though, you can use some of these lizard-brain tamers:

Automation
Use technology to take your lizard brain out of the process. You can direct deposit money into retirement and trading accounts. You can use sound Automated Trading systems, too.

Discipline
Discipline gets a bad rap. You’re probably thinking goose-stepping and arm band-wearing discipline. What I’m talking about is inner discipline. The drive to do better and stay on target, no matter what the crowd around you is doing.

Review and Renew
The lizard brain reacts. You should act… review… improve… and then act again. It’s a continuous loop of improvement. Did the recent stock swoon teach you never, ever invest again? That’s the lizard brain talking.

If you’re interested in learning more about taming the lizard brain, you might want to check out one of Godin’s most recent books, Linchpin: Are You Indispensable?.

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  1. February 3rd, 2010 at 00:10 | #1

    Never heard of these before, thanks for a very informative section there. I never knew that having these resistance and compromise have implications in personal finance is a sign a lizard brain.

  2. February 3rd, 2010 at 02:10 | #2

    I believe it’s true–the lizard brain is active in a lot of segments of our lives.

  1. May 26th, 2010 at 05:50 | #1