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7 ways to get rich by relaxing

By Richard Conniff, MSN Money

Excitement, anxiety and expenses can trap you in cycles of greed and fear. Instead, try breaking out by using a few financial and physiological tricks. It can make the whole process more relaxed -- and more profitable.

1. Commit now to doing something later.
Stake out the companies that interest you, and set a price you consider a bargain. That way, you'll be ready to pounce at the next market downturn.

When the downturn comes, you may be too scared to pounce, like everybody else. But if you're confident now that a company is stable and has good long-term prospects, consider putting in a standing order to buy it at a set price (it's called a limit order). That way your brokerage will automatically buy the stock when it hits your price, without your having to work up the nerve.

2. Save more tomorrow?
Pre-committing is also a good remedy for the tendency to procrastinate. Employees at one midsize manufacturing firm knew they needed to save for retirement -- but not just yet because saving felt like a loss of disposable income.

So behavioral economists Richard Thaler and Shlomo Benartzi devised the Save More Tomorrow plan. It asked the employees merely to commit to a savings increase next time they got a raise. Because it enabled them to do the right thing without ever seeing a drop in their take-home pay, 78% of workers signed on.

Over the course of their next few raises they automatically boosted their savings rates from an average of 3.5% to 13.6% of their salaries. So make the same kind of commitment to yourself, and then stick to it.

3. Invest, then check back in six months.
Face it: You're not going to outsmart the market day in and day out. So stop trying. The daily ups and downs will just agitate you and make you jump in and out of stocks, running up your transaction costs. Pick investments with solid long-term prospects, then forget about them for a while. If you're really worried, you can put in a standing stop-loss order to sell a stock that drops 10% or 15% from your purchase price. (Although maybe you shouldn't buy that stock in the first place.)

4. Think about your portfolio.
Sexy stocks give you that little thrill. But you will be more rational about risks and rewards if you consider any stock in the context of your entire portfolio. That means knowing your objectives and asking whether this is the best stock to get your there.

Sound too dull? OK, keep most of your portfolio in harness to your goals, but set aside a small percentage, say 5%, for play. Starting small is also a good way to avoid getting hammered as you build up experience and risk tolerance with a new type of investment.

5. Try naps and fish oil.
Pay attention to your body. Simple things such as hunger or lack of sleep can make you less rational than you want to be. You know that mid-afternoon slump when you can't focus, and buy and sell are just a blur? One widely touted quick fix is to eat a carbohydrate snack -- popcorn or pretzels, for instance -- to boost serotonin levels and quickly improve mood and mental sharpness. But the same snack might just put you to sleep.

"Taking a short nap is likely to be much, much more effective than trying to manipulate one's alertness through food or caffeine," says Peter J. Rogers, a biological psychologist at the University of Bristol.

Still, changing your diet can have long-term effects. In particular, fish-oil supplements or foods with plenty of omega-3 fatty acids seem to increase vigor and decrease anger, anxiety, fatigue, depression and confusion, the very moods that cause us to make stupid decisions.

6. A mantra for money?
You may think meditation is for Buddhists in monasteries. But it can change your brain to help you handle risk more intelligently. In a University of Wisconsin study, employees of a chemical company learned traditional meditation techniques of sitting quietly, breathing deeply and becoming calm. After eight weeks of daily sessions, MRI tests showed a 10% to 15% shift in brain activity away from areas associated with skittishness and withdrawal. Training for trading?

Can that really make a difference in the marketplace? Former Medtronic CEO Bill George says meditation helps him see what's important and accomplish it with minimal stress. In a single year, he acquired six companies at a cost of $9 billion. And between 1989 and his retirement in 2001, he boosted his company's market cap from $1 billion to $63 billion. If meditation "were a drug," George says, "it would be considered malpractice not to distribute it."

7. You need a friend.
To be a better investor, you should get out and socialize. Being with friends and family releases the so-called trust hormone oxytocin, and that calms down the fear circuitry of the brain. You might not want to make too many "buy" decisions when the oxytocin is flowing. But if you want to come in to work tomorrow and make decisions based on fact rather than fear, try going home tonight and playing with the kids.

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