I read once that every man believes he is above average in two categories: sex and fighting. Which reminds me of a study I read about from Scandinavia.
There was a portion of highway that had been the scene of an unusually high number of fatal accidents. Researchers polled drivers in the area, asking them to assess their driving ability. If I recall correctly, 80% rated themselves as above average to excellent!
Most of us have seen videos of a bully entering a boxing or jiu-jitsu gym, challenging the trainer, and being laid low. I often wonder what their thoughts were once they regained consciousness.
The takeaway here is that we tend to overestimate our knowledge and abilities. Our internal folklore - the story we tell ourselves, about ourselves - can bear little resemblance to reality; not always, but often enough that it matters.
This can contribute to fatal accidents on Norwegian highways, painful and embarrassing thrashings on YouTube, and sub-optimal results in financial planning and investing.
Mark Twain is credited with saying, "It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.".
Being overconfident can sometimes blind us to danger precisely at the times we should be most cautious. In personal finance, this shows up all the time. For example, people assume their instincts make them better investors than they are.
They think they can time the markets. They believe they will get out before a correction and so they "let it ride." Or, they are convinced that the market will crash and sell too soon.
Others are sure they are more disciplined than the average person and they will stick to a plan just because they intend to while the sun is shining. When the economic skies darken and the seas become choppy, they sometimes react in ways they did not intend.
Just like the drivers on that Scandinavian highway, nearly everyone thinks they are the exception. Statistically, we should acknowledge that might not be the case. Even better, we should assume we are not.
Why? Simple; because we lose virtually nothing by being prudent, whereas hubris could cost us dearly. Remember, no one ever said that prudence cometh before the fall.
A far better way is to formulate a financial plan based on unifying principles like risk tolerance, goals, time frames, assets, income, liabilities, family structure, and a host of other factors. Then make small, frequent adjustments when circumstances change, as they are sure to. And perhaps most importantly, stick to the plan.
If you love managing your own finances, more power to you. I wish you every success. Most folks have professions unrelated to financial services and have neither the time nor inclination to become truly knowledgeable, much less expert, in a new and complex field.
Recognizing our own blind spots is not a sign of weakness, it is a form of strength. When we acknowledge that we may not be as exceptional as we hope, we clear the path for potentially better choices, better planning, and better outcomes.
In the end, the stories we tell ourselves matter. If we trade folklore for facts and exchange confidence for competence, we give ourselves a far better chance of reaching our goals safely, steadily, and with a higher degree of confidence.
If the prudent path of facts over folklore seems sensible to you, please call me at (732) 844-3000. I am here to help.
Scott R. McGimpsey December 19th, 2025
Certified Financial Fiduciary®
This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Neither Cetera Wealth Services LLC nor Scott McGimpsey is engaged in rendering legal, accounting, or other professional services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm.