moneyFYI
Financial Freedom Is Merely Organized Common Sense
Decisions With Many Options
Having many options is worth nothing unless you use at least one of them. Implementation is the only way to test.
It is well documented that having too many choices is as likely to lead nowhere as is having none. At somewhere around six choices, people shut down and refuse to budge. It is a bit like my dog when it is -20 degrees outside.
The condition is certainly known and to some extent the reason is known. It is not what you think.
All action follows a known path.
- What do I want?
- What do I have to bring to bear on that?
- How could I do it?
- Select one of the ways
- Implement
The problem arises when the person is unable to commit to one of the ways that are available. Notice! It is committing and to only ONE of the ways.
People are afraid that they may be missing a better choice by selecting only one, so paralysis sets in. What if? Uncertainty emphasizes our already well-developed sense of procrastination.
Making the decision requires more than options.
- Do not commit to a decision if you could not reverse it given more information. Information like, “I tried it for a while and found that it did not suit me.” If you can afford the reversal, there is no risk to the early decision.
- Know the What. People have trouble committing when they do not know what they are trying to achieve. An RRSP is a valuable retirement income tool but it is worthless to the people who are not trying to create retirement income. A tool is only valuable in the context of its problem. If you do not know exactly what you are trying to achieve, selecting which tool is a formidable challenge.
- Know the What With. People have trouble committing when they are not certain they have enough resources. Sometimes there are temporarizing steps.
- Do Nothing is an implicit option. People have trouble committing until they realize that doing nothing is also a choice. In our group of six options, it is the seventh. Do nothing can be a good choice, but not unless you can say why.
- Understand Time. Decisions are made today and affect the future only. The future is unknown. Every decision encompasses the risk that the future might be different. The idea of a “perfect decision” is inherently flawed. You cannot make a perfect decision so don’t waste your time resource trying to do it.
If you know what you are trying to do, know what you have to do it with and reserve the right to change your mind at an affordable cost, then any decision that could be positive is good enough.
Do your best, but recognize that perfection is a trap.
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Contact: don@moneyfyi.com | Follow Twitter @DonShaughnessy
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
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