moneyFYI
Financial Freedom Is Merely Organized Common Sense
Making Better Decisions By Widening Your Outlook
Given the same present we have and the ability to understand it, what would a Martian do differently than we would do?
I would estimate the Martian would not make one decision in a million that matched ours
Why not?
Knowing everything you need to know about what is happening and knowing everything about how it came to be compels a different decision. The Martian would know nothing about how the decision come to be, only what is and what the implications of what it might be.
What we know and how we came to know it conditions our decisions. The Martian has no past with us, and so our history has no effect. The serious question is how would their different past condition their decision? For simplicity, I will assume that our present is unconnected in any way to their history and theirs to ours.
The point is to learn how we think, not how Martians think.
What history affects our decisions?
There are quite a few things that change decisions and thus affect our future.
Our experience. We might “know” that you should not lend money to someone in the construction business. That “know” is unquestionably based on a sample that is far too small to be meaningful. Our experience is always too small a sample.
Of allt he experiences there are available to have, how many has any of us had. One in a thousand would be generous. One in a hundred million more likely. Despite that shortage, experience makes up about 80% of the foundation for our decisions.
Even our limited experience is not necessarily valuable. We assign meaning to what we experience. There are few things in life that submit to a single interpretation of their meaning. Men and women see things differently even though they saw the same thing. Young and old, liberal or conservative. We assign meaning based on underlying biases, few of which have been challenged.
Our moral standards enter into it too. Most of us find harming another needlessly to be wrong. Those standards have significant limiting effect on what decisions we can make and how we can implement them.
Our social interaction limits us too. We often make decisions because they match the expectations of others. Pleasing parents or friends is a thing.Wishing to fit in better or to be special motivates many decisions. Make an easy assessment. For the last piece of clothing you bought costing more than $100, why did you choose the particular one you did. Would something 50% less costly have provided 90% of the functionality?
What we find out
Our decision making is not about choosing the best possible allocation of resources and best methods. In most cases it is about matching some template of who we see ourselves to be. Martians would not be so constrained.
I suppose we all know we have conscious and unconscious reasons for our decisions. Is there an example of someone who is not like that and how would it work if we could do it too.
Enter Niccolò Machiavelli
Machiavelli was an advisor to powerful people in the middle ages. His book, “The Prince,” is a classic of how to achieve certain outcomes. His decisions and methods were based on outcomes only. He propsed a template that had no thoughts of outers nor moral limitations. Just the facts and what he wanted.
Would our decisions be better if we could do that too?
Maybe we could do better
Even constrained by our history, we could do better.
Our first look would be take the current situation and assess how to optimize the future from there. That would give you many more options than would our normal methods. It permits choices we would not normally consider. Maybe $50 sneakers at Walmart are nearly as good as the $200 Nikes you would normally seek.
Given a wider range of choices, notice that reviewing them in the context of your experience and beliefs, will disclose a hybrid answer that gets a better outcome and still within your personal biases. Upon examination some things you respond to just don’t matter enoought o pay the price.
You retain your unique humanity, you understand it a little better, you learn to make decisions that aim at the right goal and you can address efficiency. Some people learn that life is about having an edge that can be repeated. Even a s mall edge often repeated adds up to something valuable.
Do you know about Las Vegas? It is build on an overall house advantage of less than 6%. You can find all you might want to know and more at UNLV Center for Gaming Research.
The Takeaway
Most people make decisions that are more about how they think than they are a product of what they think about.
It is possible to rise above that tendency but it is difficult at first. You must challenge your implicit biases. Why do you need a Mercedes instead of a Kia?
Expansive possibilities help with better decisions and they teach you things. You must do some research.
Some biases are based on old data. Did you know Brussels Sprouts have been reworked to taste better? Maybe you do like them?
It is not wise to allow who you are presently to create who you will be in the future. Better decision-making cures many problems.
I help people have more retirement income and larger, more liquid estates.
Call in Canada 705-927-4770, or email don@moneyfyi.com
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