Mind over money? Put your money and reputation on the line work better!

In current volatiles environment, putting regular sum for investing is highly counter-intuitive. We tend to procrastinate telling ourselves we will wait for a little while for the market to bottom out and put a big sum of money to work. The truth is not many people will do that for many reasons. It is like weight losing or quit smoking program.

In behavioral economics, most people tends not to do what they claim want to do. We need to create incentives to push ourselves to do it. For example, write 12 cheque of RM 1,000 for your wife or husband to bank in on the first working day of month will have a lot more higher chance of you sticking to your dollar averaging investment program.

Deposit RM 500 with your unit trust agent to tell him or her that he or she will forfeit your money if you don't honor your commitment to do quarterly or monthly top up. Put your money on the line, it will work a lot better.

I've just completed a review of my wife investment program. I can tell you the results are very satisfying. We both agreed not to buy high and sell low. We know that creating a standing instruction may not be a good idea as we tend to continue to buy at high level. So, we came out with a solution. She gives me the money to put into my fixed deposit and start to put the money to work when the market comes down to more reasonable level. The last installment in her mutual fund was in January of 2008. After stop topping up her investment for almost 9 months, I'm now been entrusted to top up her investment every month on all her last 9 months savings. This has helped her avoiding buy high and sell low.

I'm sharing this very personal experience here to inspire some of you who are fighting with investing discipline problem. Create a commitment contract today. Good luck.