To introduce the concept of the circle of control, I’m going to talk about my friend. He’s been very concerned about the government’s COVID-19 approach, the economy and vaccine science since COVID started. In other words, he’s distracted and not bettering his life. I, on the other hand, have been so focused on not needing a job and having rock-solid investments (plus a part-time job I can lean on) in case the world economy belly flops.
Basically, I feel very in control and life keeps getting better because I’m improving something I can improve. I must admit, it’s a pretty good feeling!
You’re probably wondering why I’m telling you all of this, right? I mean, it’s not like you’re here because you’re looking for a life update on me and my friend. Well, I told you all of this to introduce some powerful concepts that you may or may not be familiar with – the circles of control.
What is a circle of control?
Think about the two scenarios I just presented to you, it’s quite clear that my friend and I have taken two different approaches to all the madness that’s happening in the world right now. Essentially, our lives are governed by two factors – the things we can control and the things we can’t control.
When you give it some more thought, you’ll realize that we are faced with situations that fall in either one of these categories every single day. The circle of control is the inner part and comprises things in our lives that we have control over. Unless your wife or husband bullies you and is an aspiring dictator, an example of this would be what you want to eat for dinner.
What is a circle of influence?
Now, let’s move to the circle of influence, which forms the next layer of the circle. It is made up of everything in our lives that we can impact or have some sort of effect on. When you think about the meaning of the word “influence,” you’ll realize that it implies being able to have an opinion on something, but ultimately, you can’t determine the end results.
What is a circle of concern?
Next up is the circle of concern, which forms the outer part of the circle. It comprises pretty much all the things that make up your world and your life. It’s everything that concerns you – but the unfortunate thing is that a lot of these things fall outside of the things you can control.
In fact, it was renowned author, Stephen Covey who popularized these concepts in The 7 Habits of Highly Effective People. Okay, so what does it all mean? When you understand these different layers, it can act as a coping tool, allowing you to focus on improving what you actually CAN control.
The difference between influence, control and concern
As you may have realized, I’ve adopted a more proactive and self-driven approach to life, relying less on external factors and more on myself. Instead of questioning things that I simply can’t control, channeling my energy towards things that I do actually have control over has proven to be that much more valuable and fulfilling.
When you think about the different layers, they all speak to the extent of the impact you have on situations.
The circle of control refers to things that you can change or have a visible impact on to affect the outcome. The circle of influence refers to things that you may be able to sway or change the outcome – although, it is not guaranteed. The circle of concern is pretty much everything concerning your life – both things you can control and those you can’t.
How a circle of control makes you feel more in control
When you think about it, the minute you change your view on things and become more proactive, you’ll realize that the circle of control gives you the liberty to steer your own ship. Of course, there are things that you can’t change, there are some that you can either influence or control, which means that you get to put the power back in your hands (Yes!!!).
Mastering the art of not letting the circle of concern weigh you down, while dedicating an adequate amount of time and effort to the circle of influence is something we should all aspire to. But you know what you should really dedicate most of your time to? The circle of control. Not only will that lessen your worry and stress, but it will be more beneficial to you.
It also improves your frame of mind and makes you that much more proactive. All in all, these are key things that lead to happiness and a better quality of life – after all, isn’t that what everybody in this world wants? Or in my case, all I want is happiness, financial freedom and burritos!
How to use a circle of control in finance
Speaking of financial freedom, the circle of control also applies to money and how you use it. If we focus specifically on investments, people tend to put too much emphasis on timing the market, forecasts and trying to identify the right entry and exit points. But even that is not guaranteed, it forms part of the circle of influence, rather than the things you can control.
Instead, you can look at things like how long you want to hold a particular position for, as an example of something that is within your control. You decide when to invest and when to pull out. If you’re thinking, “What if market conditions improve right after I exit?” – and therein lies the uncertainty… which is what you don’t want.
On the flip side, what if the market completely crashes and you lose your entire investment? Market conditions are out of our control as people, so you don’t want to waste too much time and thought focusing on things you can’t impact.
Also, if we look at real estate (my favorite), the same applies. If you’re relying solely on your properties’ appreciation to make money, you’re really going about it the wrong way. Yet again, interest rates and market conditions are way out of your control.
So what should you be focusing on? Great question.
Rather shift your focus to buying cash flow positive real estate. At least here, you have control over what you deem a viable investment. High-yielding rental property is a decent thing to bet on.
7-step plan to define your own circles of influence and control
1 – Be mindful of your choice of words
What some people may overlook or forget is that your choice of words has a huge impact on how you view and approach life. If you want to positively define your circles of influence and control, you need to use more proactive language.
I know, if you’ve become so used to negative and reactive language, this may feel a bit like learning a new language. But trust me, it’ll be worth it. You also need to start asking yourself the right questions in order to guide your thinking. Your attitude can be influenced by the things you say to yourself – so be nice.
2 – Look for solutions, not problems
Oh man, have you ever met those people that always find a problem to every solution, as opposed to a solution to every problem? That’s the only time I REALLY appreciate social distancing. Wouldn’t want any of that negative energy to rub off on me. No, thank you!
In order to really gain control over your life, you need to be solutions-oriented. Look at me for example (not that I’m saying that I’m the model human being or anything), when I realized what a mess we’re in, I knew I couldn’t wait for other people to look after me and my interests.
That’s what I love the most about things that fall within my circle of control – it means I can spend all my time strategizing and reworking things until I can find a solution to my problem. Instead of sitting around moping, I’m dedicating my efforts towards investments that are promising and are likely to serve me well in future. Pandemic or not.
3 – Be proactive
Operating within your circles of influence and control requires you to be forward-thinking and proactive. Fortunately, you have a direct impact on the potential outcome of things that fall within these categories, which excites me. You don’t have to wait for the government, global leaders, your mom, your partner, or your dog to take any action – it’s all on you.
I know, this can be a bit daunting, but rather than waiting for a knight in shining armor to come save you and your livelihood.
4 – Learn to categorize situations
Okay, so you have two options; one is to spend your time stressing and overthinking about absolutely EVERYTHING in the world, from the economy to the pandemic, and even the increasing number of deaths due to global conditions. Or, you could learn to do a mental categorization of the things you can and can’t control.
The news anchor reports that there’s a new COVID variant, what do you do? Fret about it every day, try to concoct a vaccine, jet off to another planet? No, I didn’t think so. You know why? Because it falls out of your control and stressing about it really won’t change anything!
Instead, you should teach yourself to only worry about things that you can influence or control. In that way, you’ll have more time to come up with decent solutions and options to the things that matter and whose outcome you could also potentially change.
5 – Allocate your time appropriately
This goes hand-in-hand with being able to mentally categorize situations when they are presented to you. If you do this (and for your sake, I really hope you master this), you’ll find that you’ll probably come up with efficient solutions to problems that you can change the outcome of.
An example of this would be receiving a selection of properties to choose from to purchase for rental income. So, you could either fret over the crazy interest rates, or you could have a careful look at your portfolio and go for the option/s that promise better returns. Spend your time number crunching until you find an option that makes sense.
6 – Remain focused
Over time, you need to be a bit more intentional and aware of the things you dedicate your attention to. It’s very easy to get distracted and start panicking about things that you have absolutely no influence or control over – which is pretty useless.
Ever heard the saying, “You need to pick your battles”? That’s exactly what you need to do when looking to define your circles of influence and control. Basically, don’t try to put too much on your plate, otherwise you’ll really drive yourself crazy.
7 – Declutter
At the core of it all is the ability to declutter and only focus on things that concern you. It’s a bit like with everything else in life, you need to have some sort of goal in order to immediately identify things that need your attention and those that don’t. If you fail to do this, you’ll probably end up feeling like a bit of a headless chicken without much direction.
By sticking to your instincts and understanding the value of your time, it will also be evident in your intentions and behavior. Regardless of who you are and where you’re from, I’m pretty certain that we all desire some level of control over situations in our lives.
So, if you walk out of the door tomorrow and find that it’s an irritatingly hot and sunny day, you can either choose to complain and waste your time being a grouch about the situation, or you can get a pair of cool sunglasses to protect your eyes.
You can’t change how hot it is, so quit thinking or stressing about it. BUT, you can influence and control the impact it has on your life by finding a way around it and getting a suitable pair of shades. Oh, and you’ll look super cool in the process.