moneyFYI
Financial Freedom Is Merely Organized Common Sense
Identify Mistakes Sooner
If you look at what is happening in your life, you will sometimes find aspects you don’t think are working to your satisfaction.
You have two choices. Discover the root cause or not, and do something about them or not.
The theory
Things that aren’t working in your life have a genesis moment. A point when the eventual failure began. There is merit in identifying mistakes quickly enough to adjust. “Every great mistake has a halfway moment, a split second when it can be recalled and perhaps remedied.” Pearl S. Buck.
What’s the key?
Make more careful decisions. Most weak decisions did not answer a single question. “What happens next.” Many people have problems considering what will happen after. When problems arise, often immediately, they put it down to unforeseen consequences. Learn the difference between unforeseen and unforeseeable. If you lose the rent money in a poker game, the outcome is clearly foreseeable, even if unforeseen.
The unforeseen is usually an excuse for not having considered all the consequences of drawing to an inside straight when given pot odds of five to one.
It is not always easy to see the future outcomes clearly, but it is a mistake to assume the decisions you make will have just one consequence.
Learn to quit before you make the decision.
Mistakes that are already embedded in your life
Mistaken decisions solve nothing. They harm you as they become a problem instead of a solution. Simplifying life requires they be dealt with again. Save your energy and other resources for solving the big problems. “It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.” Muhammad Ali.
It isn’t the big problems that will drive you crazy. It is the little ones, and usually, they seem too small to make a priority. The fact is a collection of small problems quickly becomes a big problem. Readdress the situation and use your knowledge gained from your first mistake to do a better job this time. Be very careful of false savings. Sometimes the circumstances must be changed.
W. Edwards Deming, the quality control expert and creator of Toyota’s quality system, claims most defects are designed into the process. Designed in should include the possibility that obvious ones were not designed out. Anything that is not specifically prohibited will sooner or later come to pass. An example. A manufacturer uses carefully cut and shaped wooden pieces in their product. They have carefully managed their tooling to get the precise shapes they need. That process involves keeping the tools sharp, and they have a 90-day resharpen policy.
Someone made a decision to change the wood used from softwood to maple. Better aesthetics and durability after the sale. The unforeseen result was the tools became too dull in about 80 days. For the next 10 days, the scrap rate jumped. By the time they finished identifying they had a problem, discussing it, having the supplier establish that their material was not defective, and gathering other information, the scheduled resharpen happened, and the problem disappeared. For about 80 days and then it reappeared. Management decided it was the material. The defects went away again only to reappear11 weeks later.
Eventually, a worker on the floor pointed out the problem.
A good rule for decision makers is talk to the people who know and use the product or process. I had a cousin who was a plant manager in the GE system. He called his self-created method “Management by walking around.” People who perform the tasks know what they do in a practical way. That often conflicts with the theories held by engineers and managers. Learn to listen, and many problems disappear as if by magic. Suggestion award programs often elicit significant savings.
For any undesirable outcome, talk to the people nearest to it. They might even know how to repair it. Apply the same rule in family and personal life.
If there is a problem, it has a cause. It could be a poor decision or a decision that didn’t change when circumstances changed.
Short-termism
A common mistake that people know about and make anyway is to value the short term over the long term. “We’ll deal with it when it comes up.” is a familiar thought and one that has an implicit assumption. You’ll have more time or other resources to repair it when it does appear. If you push enough things into the future, you won’t have time to do anything other than fix problems. What happens then?
I found this post by Set Godin that started this thought. The Wisdom of the water tower
Organized common sense.
The bits to take away.
Do not let easily repaired old decisions harm your life. There is no shame in making a bad decision; there is shame in refusing to admit it was wrong. You don’t drown by falling into the river; you drown by not getting back out.
The more you rid your life of old mistakes, the simpler it will become. Simpler is a reliably effective program.
I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning. I have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.
moneyFYI 