Inner Circle - Loss Aversion: Unlock True Growth by Michael B. Clegg's

Hey, what's up guys? Good morning. I'm filming this Friday morning for my truck. I am about to head to a speaking event for the weekend and today we're going to talk about loss aversion. I hope that you guys are gaining value from the last two weeks videos. Please, please, please watch them, share them with people if you want. But if we're going to be great leaders, we have to be able to develop ourselves first. And so the things we're going to talk about in this video are exactly that. More about self development and things that will drive a little bit of self awareness. So when we're describing loss aversion, right, we have a tendency as humans and it's in our nature to avoid losses rather than acquiring equivalent gains. So basically we find that losses are a bigger impact than any gains. And so there's a psychologist who wrote a book, Thinking Fast and Slow. And some of you guys have heard me reference this before. Daniel Kahneman. The concept suggests that the pain of losing is psychologically twice as powerful as the pleasure of gaining. So why does that matter in the business world or for leaders? Well, I think many leaders and professionals, they avoid change, they avoid trying new things and that holds back and suppresses your growth. That's just a fact, right? Whether it be fear of what you might lose or fear of what might happen, the unknown. If you're considering investing in any area of yourself as an example, but you're on the fence, that's typically loss aversion that's happening, right? And so when you're outside of your comfort zone, that's when growth happens. It's the same thing here. And it is, once again, it's natural. It's the wiring of our brain. It's that whole little almond shaped piece in our brain called the amygdala that processes fear. It kicks in to protect us from threats and including those that challenge the status quo, or as they would say, homeostasis, right, Challenges the norm. And these threats are antiquated, they're old, these threats aren't real and they're not really going to harm us. Those are just facts. And it's not just you, it's how our brains are wired. But the great thing about brains is you can rewire them. So think about it from the standpoint of marketing strategies. Retailers often use the loss aversion for sale. So, you know, let me give you some examples. Sale ends today. Hurry up. 40% off everything. That's loss aversion. These marketers are clever. They know that we're motivated to avoid losing things or we experience FOMO fear of missing out. These are real human conditions that we have to deal with. But once again you can rewire your brain by understanding loss aversion. We can actively focus on the potential gains and you can overcome any fear of loss and become more confident and make growth oriented decisions daily in your day to day life. But you have to understand that loss aversion plays a part in that. If we always avoid risk, we're going to miss out on the chance for significant gains. And those are the things that make the best leaders admirable. Chances are the best leaders take substantial risks and research supports that people who consistently take bigger risk do better in life, that they push through the fear of loss to achieve greater success and gains. So you know, how can we flip the script on loss aversion? One method I use is journaling and I've been asking you. And for those of you that haven't, which is probably the majority of you that haven't taken the time to follow the journal prompts, please do that because we're going to start talking about it in next week's call. Because when I journal, it helps me shift my focus and my mindset from what I might lose to what I'm going to gain. And the gain is what excites me about impossible goals. The gain is what excites me and keeps me motivated. Maybe when I'm on a project that I've been doing for long periods of time. Another strategy is reframing your thinking. Instead of seeing like a new technique or a new strategy as a threat to status quo, view it as an opportunity for growth. Remind yourself that staying in your comfort zone will not lead you to progress and encourage those around you to adopt this mindset as well. Remember, we become our environment and understanding loss aversion as a common human nature response will help you manage it. And it'll allow you to use use the knowledge to push past the fear of loss. I'm going to share a quote with you by Albert Einstein who said imagination is more important than knowledge. Now think about that for a second. What does that mean to you? Well, to me I think about growth mindset versus fixed mindset. Fixed mindset says this is the way we've always done things and it's good enough. So I don't want to change. You are suffering from loss aversion. That's what's happening. That's what's holding you back from from taking steps bigger and bolder and having greater levels of success in all areas of your life. A fixed mindset holds you back. A fixed mindset keeps you in the status quo. When I feel stuck, that's when I realize that I have started falling back into a fixed mindset frame of mind, you know, and I'm going to put this shameless plug in for my TEDx that was just approved this week by the way. So please go watch it. It's really getting great feedback on it. I mentioned it in the video in my TEDx that I was living in the day to day and it wasn't until I started journaling that everything changed and I had a massive event that happened in my life. And some of you experience and have experienced recently trauma. And trauma can really hold you down and put you in that fixed mindset. And it's totally natural. It's your body protecting yourself. But you got to break past that because you owe it to the people around you in your lives that love you and support you in every journey that you take to be better, to do more. And that what I want. But it wasn't until I started reframing my past and really framing what the future was going to look like by adopting what I wanted my future self to look like. And so when those things happen, your brain really truly is rewired. It was eight to 10 months ago when I started this process. And so as I continue to grow, I'm going to bring you guys along on this journey. And like I said last week about my mom and if you haven't watched that video, please, please go back and watch the video. Watch them both. I talk about my mom and her listening to self limiting beliefs. My mom is an awesome interior designer, but she doesn't think she is. Even though everybody that she's helped redecorate their homes love her and always ask her to come back and do it again when they're ready for a redecoration. But yet my mom felt that she wasn't degreed. She didn't have a high school diploma, she didn't have a college degree or any certificates. So she felt that that was part of the qualification or prerequisite to be an interior designer. I get it. And there are some things in life where you do need certifications, but my mom was already doing it. It wasn't just limiting beliefs, it was loss aversion. Okay? She had this fear of changing. She had this fear of putting herself out. She wanted to hold on to those cleaning clients when in reality she could have 5xed or 10x her business by instead of offering them cleaning service. It's not like she loved cleaning other people's houses. No, but that was what she was holding on to was the income from that. And she was afraid to risk that and lose that income to take the risk to go bigger and bolder and be an interior designer. Charge 5x 10x Charge what market value deemed that she was worth and loss aversion played a part in that. So as I wrap up today, please, please, please pay attention to these two journal prompts. So the first journal prompt, think about a potential risk that you can take today. What is it and what could the results be if you reach the desired level? Whatever it is, what's one change that you can make? It doesn't even have to be a big risk, just something differently. And we're going to talk about this particular one next week. So if you're not watching this video, you're not going to have the homework assignment. So tell your friends, watch the video. The second journal prompt. What would have to be true in order for you to take those steps of achieving that desired result? So in my business, I'm moving away from one on one coaching. I'm doing group mass mastermind coaches because in my mastermind groups, not only do I gain a lot of value from my coach, but I gain even more value from my peers in the group. And so I have decommitted to taking on new one on one coaching opportunities. And that was a big risk for me because that's where my income is, right? So for me to do that, I'm taking a big risk. But instead my goal is I have to find seven additional corporate clients that become retained clients for me. If I do that, not only do I achieve my goal, but I 10x from where I am today. And the only way that happens if I decommit from one on one coaching because I can't scale me, I'm only one person. If I've got 20 people that I'm coaching, that's 20 hours of conversation in a week. That's half my week. And usually it takes me 30 to 45 minutes to prep for those calls and 30 to 45 minutes to prep afterwards. So you know, you're looking at two and a half hours per person and that doesn't include my other clients that I'm working with in a group setting. That's what I'm making a change with. And it is a risk. But I know that I'm going to achieve it because I'm pouring everything into making that happen, and I'm rallying the people around on my team to help me make that happen. So please pay attention to these two journal prompts. I hope you have a fantastic week. Let's have a massive week. Love you guys. Talk to you soon.