When you take a finance class, you learn the principle of asset diversification.
Diversification means you’re able to maximize your overall financial return across a wide variety of market conditions while reducing your losses.
By diversifying correctly, you achieve the same level of return as a less diversified set of assets BUT have a lower risk of loss.
Same upside. Less downside.
That’s the underlying principle behind diversification.
(From a finance point of view, it is possible to over-diversify to the point of having very little upside... but I’ll save that thought for another day.)
This principle of diversification applies very well to self-identity, which is an important aspect of self-esteem.
Self-identity = How you see yourself.
Self-worth = How you feel about your worth as a human being.
When you combine the two, it says that your self-worth is a function of your self-identity.
If you have a poor sense of self-identity, you will naturally have a poor sense of self-worth.
If you have a healthy sense of self-identity, you will also have a healthy sense of self-worth.
After many decades of struggling with low self-esteem, I learned and came to appreciate the value of having a diversified self-identity.
In the years where I struggled most with my self-esteem, I defined myself by a single dimension — my performance in my career.
When I had a good year in my career, I felt good about myself.
When I had a poor year in my career, I felt bad about myself.
This is the equivalent of having an investment portfolio consisting of a stock that fluctuates wildly from year to year.
Having your identity based on only one narrow role in life is a recipe for having an unstable life.
Nothing in life runs smoothly for 50 years.
Every aspect of life has ups and downs.
Careers have ups and downs.
Marriage has ups and downs.
Parenthood has ups and downs.
Physical health has ups and downs.
Mental health has ups and down.
The only guarantee in life is that there are no guarantees.
Things change. Things fluctuate.
That’s just how things work.
It stands to reason that when you diversify your self-identity, you buffer yourself to some extent from the downsides of life.
When my entire sense of identity and self-worth was tied to my career, my emotional health fluctuated in lockstep with my P&L statement.
(Which sounds kind of sad to me as I see my own words in writing.)
Over the last few years, I’ve made an intentional effort to diversify my sense of self-identity.
As a career professional
As a father
As a friend
As a volunteer
As an athlete
I devote energy to all five of these roles every week and often every day.
If my career implodes or has a hiccup one day, there are four other aspects of my life that don’t change as a result.
If I don’t achieve my athletic goals one year, the other aspects of my life aren’t negatively impacted.
When I have a rough week as a parent, those setbacks are completely independent of the other aspects of my life.
Because of these experiences, I’ve come to the conclusion that having a multi-faceted and diversified sense of self-identity really limits “losses” in self-esteem without capping any of the “upside.”
Seeing myself as a father does not cap the ability for me to achieve my career goals. There’s no magical law of physics that says fathers can’t grow their business greater than X% a year.
Yet when I have a major career setback, seeing myself as a father (and in several other roles) really helps soften the blow of disappointment from a career setback.
In this past week, in how many different ways did you see yourself?
How are you defining your own identity and sense of worth?
Is your sense of self-worth low or easily shaken?
These are worthwhile questions to consider.
If working on improving your emotional self-resilience and self-esteem interests you, I’d like to offer the following suggestion.
Take a look at my program on How to Develop Unshakeable Self-Esteem and Incredible Self -Confidence. It provides a framework for how to think about and improve yourself in these two vital areas.