It is an interesting game to imagine “famous last words.”
“Hold my beer, I want to try something.”
“Hey look, an orphan bear cub.”
“Watch this. I remember when I could do a cartwheel.”
While these can point out foolishness that may be lethal, there are other phrases you should watch for. They may not be lethal but they can be debilitating to your financial future.
“We always do it this way.” Most people have things where that phrase applies. What they are missing is that the phrase assumes a set of conditions to exist. They existed when the rule was established and it may have been a very good rule then, but do the conditions still exist?
Like this. Young newlyweds are preparing a roast of beef for their first dinner party. The wife cuts about an inch off the end of the roast and lays it beside the roast in the pan. Husband asks why she did that. “My mother always did that” is the answer. When next visiting mother-in-law, husband asks if she does that and if so why. Her reply is identical. “My mother did that.” Later, visiting Grandma, husband again asks. Her reply, “When we first came to this country, our neighborhood butcher was a crusty old guy and he made roasts only one size. I had a roasting pan that was about an inch too short so I cut the end off. I suppose my daughter had moved away before I got a bigger roasting pan.”
Examine all of your “taken for granted” assumptions.
The next big risk is the phrase, “This time it is different.” It is certainly possible that this time is different, but you need more details. What specifically is different and how does that difference support the conclusion of a new behaviour. Usually the differences are clear but the conclusion is not as connected.
For example, Hiram Maxim invented the first man portable, automatic rifle. Havelock Ellis asked him, “Will this not make war more horrible?” Maxim replied, “No, it will make war impossible.” The observation of the difference was clear, but the conclusion derived from it was quite wrong.
Always look for other possible conclusions. This time is different, that assessment can be right and the conclusion very wrong. Sometimes the way we always do it is right.
Be alert and a little skeptical.
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. Contact: firstname.lastname@example.org