How We Learn

No one has ever learned much being right. Sometimes we are right by accident. That usually happens when we don’t know much going in. In simple terms, we are lucky. We got the right answer but don’t know why.

On the other hand, being wrong usually costs us enough that we pay attention. The trick is to take the loss and learn from what happened.

  • What information did we lack before deciding?
  • How is the context different from what we anticipated?
  • How did others interfere with the outcome?
  • Did we implement well

Paying too much attention to the outcome hurts you

It is not always enough to notice what happened. It helps you get ahead by asking why it happened and what other possibilities could have happened.

The idea is that decisions and outcomes are in three part harmony

  1. Thought process. How we defined the situation and estimated how it fitted together.
  2. Action. Application of a method
  3. Outcome

If you focus on outcome and don’t like it, you will tend to assume your action was poorly executed or your thought process about how to act was in error.

The key is to notice that the idea, “You were wrong” isn’t always true. Similarly the idea you were right may not be valid.

Outcome are for proving things

It is a bit like taking a spelling test in grade school. If you get 30 out of 50 right, you should learn something from that. You should not learn you spell poorly but rather you should look for a pattern of error. Maybe all the errors are from one lesson you missed because you were away that day. Maybe you think “i” comes after “e”. Maybe you are not hearing the teacher properly.

When we know a little more about what the outcome means, we can move ahead.

Moving ahead means improving our thought process including the selection of tactics and better application of the tactics selected. Nothing works very well until you implement the tactic.

If you decide things that are internal, like I am a bad speller, bad at math, poor investor, weak judge of character, or I choose my friends poorly, you will be worse off any time something does not work out and you will have given up a learning opportunity. You won’t be worse off if it does work but you will learn nothing.

When things go wrong

To improve, you must assess whether the outcome arose from a faulty thought process. Too little consideration of the problem, no effort to assess the history of such decisions, ignored the effect of other people, pay too little attention to how the context could change.

If you didn’t notice the variables when you made your decision, this analysis will be fruitless. If a decision matters, it is worth recording your reasoning.

One of the things you should record is your tactic or method of addressing the problem. Also the options you did not choose.

At this point you can assess whether the bad outcome comes from one of three possibilities:

  1. Your thought process missed important variables or weighted the variables incorrectly.
  2. Your tactic selection was weak. Usually because of an impulse decision. Familiar approaches should be evaluated from time to time. Old methods might still work best but be sure.
  3. As Spock might have said, “Random chance did not operate in our favour.” Sometimes you are unlucky. There are not so many things in life that are fully deterministic. It is a mistake to overlook life’s random element.

The biggest mistake

If the bad outcome was the result of a random event, your biggest mistake will be to change your thinking process to make this random outcome more dominant in future decisions.

It is the mark of a mature decision maker that they can understand that even one in thousand events happen. They can think right, execute right, and still get a bad outcome.

Takeaway

Bad outcomes don’t define you. Bad thought processes and weak execution might, but you can change those if you set out to learn from mistakes.

Good decision making skills provide a huge advantage in life. Spend some time and trouble to improve them. Notice bad outcomes and how they arose. Mistakes are your friend if you assess them well.


I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates.

Please be in touch if I can help you. don@moneyfyi.com 705-927-4770

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