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Behavior Gap: Issuing a Personal, Financial Recall

From Carl Richards, Director of Investor Education, The BAM ALLIANCE

Over the past few weeks, we’ve watched a number of car companies announce recalls. From GM to Toyota, these companies have raised their hands and admitted they need to fix a mistake. Often, a recall happens because engineers didn’t anticipate how a design would work over time or the design contained an unseen flaw that’s only revealed after many uses.

Even after numerous tests, companies may still make mistakes, but a recall let’s a company fix its mistakes. Of course, some companies may be at greater fault than others, but the point that matters for us is that a recall allows for the admitting and fixing of a mistake.

I totally understand that this concept seems very basic. But, be honest: What financial decision have you made that you know needs a recall, but you’ve hesitated to do anything about it? Maybe you don’t like admitting the mistake. Maybe you aren’t sure how to fix it. Whatever the reason, I think it’s safe to say that most of us have at least one financial decision we’d like to recall.

Stuff Happens - Carl Richards

The reality is we try to make the best decision possible at a given moment based on what we know at that time. Then, things change, we learn something new or we realize that what we thought would be isn’t after all. It’s at these moments that we need to issue a personal recall.

Instead of sweeping our decisions under the rug, we owe it to ourselves to admit the mistake and fix the ones that can be fixed. Most of us don’t intentionally make mistakes, but the way we react to financial decisions that turn out badly implies we should always know better. Really? We haven’t yet gained the ability to predict the future, so it’s a ridiculous standard to expect perfect decisions every time.

Give yourself a break. Issue a recall, and recognize that you may need to do so again. Making mistakes isn’t the real problem. It’s failing to admit to them and then fix them that can lead to bigger ones.


About the Author

Carl Richards, Director of Investor Education The BAM ALLIANCE

Carl Richards is the director of investor education for the BAM ALLIANCE. He advises on best practices, marketing efforts and social media.

Carl is the author of The Behavior Gap and a regular contributor to The New York Times. Known for his simple sketches that capture complex investor behavior, Carl’s work has been featured in The Wall Street Journal, Financial Planning and at His work originally appeared on

Carl holds a bachelor’s degree in finance from the University of Utah.


The opinions expressed by featured authors are their own and may not accurately reflect those of JDH Wealth Management. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2014, The BAM ALLIANCE

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