Finance & Investments

A recent Forbes article by Mindy Crary identified the four stages of awareness we need to master before learning a new skill.

Unconsciously Incompetent. This is the stage where you don’t know what you don’t know. This skill or thing isn’t even on your radar. Many people are unconsciously incompetent with wealth creation because while growing up, it wasn’t an issue for them. Things got bought and paid for and no one ever talked about money.  

Consciously Incompetent. You know you want to be able to do something. This is where people start to apply their individual problem solving styles; some people jump in anyway, some people try to intellectually and theoretically understand before applying the new knowledge. People usually become aware that they are consciously incompetent with wealth creation right after they make a money mistake, like accumulate credit card debt.

Consciously Competent. When you’re consciously competent, you know how to perform the required skill, but you have to do it carefully. With wealth creation, you might limit your options with investing because you KNOW you don’t understand the more complicated investment products; or you manage your debt, but only because your credit cards are in your freezer, submerged in a tin car filled with water (because you can’t microwave a tin can).

Unconsciously Competent. Unconsciously competent people perform the skill without even really thinking about it. When people are unconsciously competent about wealth creation, it usually looks like they just got lucky—often the way people perceive other successful people. The specific reasons for their competency vary between individuals; but one thing that DOESN’T vary is an early awareness about money and an environment that supported the idea that people do in fact have complete control over their financial situation.

In my day job as a financial planner I deal with people in all these categories, mostly in the "unconsciously incompetent" and "consciously competent" stages. Its my job to move them through to "unconsciously competent."