Post Hoc Fallacy is a common error in thinking about cause
and effect. It works along the line of assuming that because
event G occurs, whatever happens after G, is because of
There is another construct: the dual fallacy, called the
fallacy of composition. It also addresses they way we conceptualise
and think. It assumes that what is true for a part of a
system is also true for the whole of the system. But that
is not always so, and neither does H always follow G.
This is a sophisticated way of saying that our own capacity
to save money for the future is likely to be pretty independent
of what is happening in the macroeconomics. Will power and
determination are individualistic things that often beat
In fact, the people, who make it big on the stock market,
do what the typical person would not do. They see opportunity
where others see trouble. They are not necessarily mighty
takers of risk; they simply have a keener eye on the ball.
How so? They see what is happening at the micro level, and
recognise that they can beat the systems. They then seem
to ignore the macroeconomics. They have a burning desire
or passion for a thing, intend that it should happen, and
despite all the constraints that others belabour; they achieve
what they set out to accomplish at the micro level.
Make it big
When governments try to manage the supply of money and the
economic indicators through a mix of fiscal and monetary
policy, the majority of people get caught up in the victim
It is the few who believe in themselves, who get out. They
are not concerned with who constitutes the labour force
or the inflation rate. Whether people are unemployed or
employed, they lay no blame on others. They simply intend
to make it big.
There are two basic units of decision making in every economy:
the companies and the households. In general there is precious
little that any company will do to make you rich. They will
give you only in relation to the labour hours that you give
What you make of the benefits you receive is an individual
choice. Individuals in the households make a choice to be
rich, to be average, to be poor, or to be victim.
By simply not doing what needs to be done we fall in the
trap of following the crowd, and we complain. Because the
interest rates are low, does not necessarily mean that your
returns will be low. Because food prices are high, does
not mean that you will spend every cent on food. There is
always a window of opportunity.
Individual wealth is not a post hoc fallacy; you have to
work on it, intentionally and strategically. I always say
that the universe has a way of making room for those who
know where they are going.