We all have a Confidence Bank Account. Some people seem to have an endless supply of confidence, which buffers them from criticism, mistakes, and failures. Others seem to be forever “in the red,” suffering from self-doubt, low self-esteem, and even depression. But where does this elusive quality come from? How can we earn more of it? And why do some people seem to be immune to the psychologic effects of failure?

At the most basic level, our lives are a cycle of doing, receiving feedback, making adjustments, and repeating. The more positive feedback we receive, the more confident we become; we’re “on the right track.” On the surface, the Confidence Bank Account is a simple concept: Positive feedback is a deposit into the account, negative feedback is a withdrawal, and any positivity left over means we’re confident. As we know from experience, however, self-confidence isn’t so simple.

There are modulating (modifying) factors that affect our confidence levels. Most of us can probably think of at least one person who, despite constant criticism and teasing, seems unfazed or unaware—blissfully ignorant to the negativity. For the rest of us (the people who are very aware of the feedback we receive from the world), our ego fluctuates with the tide of negative and positive validation, both internally and externally.

Theoretically, a person with more positive than negative feedback in her life has more confidence overall. After all, history has shown that, on average, her actions are more likely to be rewarded than punished. But like money in an actual bank account, confidence is unevenly distributed in the population, is subject to market forces, and people make poor investment decisions. Also, while positive feedback may create significant deposits at the time—whether good grades in school, complements on our looks, or the honeymoon happiness of a new relationship—there is deflation to worry about. Those big deposits are less valuable as time goes by.

But why does any of this matter? Well, confidence itself is just one aspect of life, but it serves as a valuable proxy for several other factors. It acts as a KPI (Key Performance Indicator). For most of us, being genuinely confident serves as a rough estimate for the health of our interpersonal relationships, having strong guiding principles, our mental well-being, and life stability overall. It’s not a perfect metric, but it’s a useful litmus test. With a handful of other KPIs (ex. humility, integrity, and appreciation to name a few), we can monitor and evaluate the overall health of our lives.

In this multipart series, I will attempt to shed light on the Confidence Bank Account as a whole, including key sources of revenue, confidence investment strategies, confidence debt, maximizing profits, and charitable donations. It is my personal goal that the financial analogy will help clarify the often ambiguous and elusive qualities of life—the parts that make life worth living.

SUMMARY:

1. C = pF – nF , Confidence = Positive Feedback – Negative Feedback

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*Disclaimer: The Confidence Bank Account is in no way scientific, mathematically sound, nor inclusive of quantitative data, so please sit back, relax, and enjoy the thought experiment.