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May 28, 2021

Why it pays to be an optimist

By Gordon Powers, Sympatico / MSN Finance

Although written for advisors looking to understand their clients, here’s an interesting article from investment industry consultant Dan Richards which draws heavily on the work of Martin Seligman.

Seligman is a psychology professor at the University of Pennsylvania and the author of Learned Optimism: How to Change Your Mind and Your Life. Much of his research has focused on optimism, a trait shown to be associated with good physical health, less depression and mental illness, longer life and, if you’re really lucky, greater happiness.

Seligman’s research has shown that we are not born as optimists. Instead, we can develop skills that help us maintain a positive point of view – something to consider, both for the close 700,000 Canadians now collecting EI and the thousands more waiting for their jobs to disappear.  

Seligman began his career as a research psychologist by studying helplessness in dogs, Richards notes. In an early experiment, he put dogs into a cage from which they could not escape and subjected them to mild shocks. After some effort to get out, the dogs would give up trying and lay down. Later, he put them into a cage from which they could easily escape and subjected them to the same mild shocks.

But it was too late. The dogs would just lie down and give up. They had learned helplessness and hopelessness, a trait, Seligman believes, that most people share but many can overcome. 

Research has shown that certain life events seem to knock people right off their feet. The two biggies are the loss of a spouse and loss of a job. It takes as many as five years for a widow to regain her previous sense of well-being and the effects of a job loss linger long after the individual has returned to the work force.

But much of this is determined by your outlook, Seligman maintains. For instance ...

  • Pessimists believe negative events will be permanent, while optimists prefer to view them as temporary.
  • Pessimists believe negative events are universal, affecting everything they do. Optimists realize that they’re usually specific and limited to individual circumstances.
  • Optimists acknowledge that many events are simply beyond their control, while pessimists believe they’re entirely responsible for all the negative events that beset them.

Where do you fit in? 

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...