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Not So Common Sense

Last week, I gazed upon my empire (see: a quarter-acre backyard) and realized the lawn had stopped growing.

It’s been two weeks since I’ve mowed. Native Americans counted time in lunar cycles. I count mowing sessions. But the grass is showing minimal growth, if any. That’s what happens when you have a few weeks of below-average rain.

Duh, Jesse.

Is that what you’re thinking about me? I don’t blame you. It’s common sense that plants need water to grow.

But until I owned my house and became responsible for the lawn, I don’t think I noticed this obvious fact about grass. I thought grass grew steadily, such that it needed mowing every week from May through October. Common sense wasn’t so common for me.

Similarly, I saw this Tweet from a friend who owns residential rental real estate:

I laughed. Don’t those tenants know the dryer loses all efficiency when the lint trap is full?!

And then I paused. Because those tenants don’t know that. Obviously. What I consider common sense was never taught to them. Just like you question my intelligence over grass growth, here I am questioning the tenants’ intelligence over lint traps.

Common sense is a black hole until it’s been explained to you.

Every minute I spend working with readers or clients is a reminder of that fact. Common sense isn’t universal. Nor is it always innate. It’s learned.

Sometimes that learning is so basic that we pick it up through personal observation. Nobody needed to explain to me that the lack of rain led to my grass stalling. I saw the pattern on my own and applied previous knowledge from growing bean sprouts in 3rd grade.

But I needed someone to explain to me why budgeting was so valuable, despite its simplicity. Similarly, I understood the general life concept of “putting eggs in different baskets,” but I needed help understanding why that makes sense for investments.

The financial world is full of “common sense.” That is, knowledge that instantly makes sense once it’s explained to you.

Most investors realize that investments entail a risk of capital loss. But if you’re younger than 30, you might have never experienced a stock market like the past 6 months. A long-term capital loss might not have been on your radar. To you, “stocks go down too” is an esoteric concept from decades past. It’s not common sense.

The S&P 500 since 2009

If you’re a financial learner, don’t be afraid that you don’t know “common sense.” I didn’t realize that lawns stop growing in dry spells until I was 27. It’s ok.

And if you’re a financial teacher (I’m thankful for the many of you who are!), never forget that your “students” don’t know common sense until you teach it to them. There’s nothing wrong with that. Be patient with them.

In both cases, awareness of the “theory of mind” is key. In short: other people think differently than you. Ironically, even the theory of mind is an example of common sense that ain’t so common. To some of you, theory of mind is a no-brainer. To others, it’s a mind-blowing concept (get it?!).

As always, an investment in knowledge pays the best interest.

Let’s grow together.

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-Jesse

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