moneyFYI
Financial Freedom Is Merely Organized Common Sense
Be Careful Of Getting The Answer You Want
A prediction is no better in complex situations than the assumptions made and their interaction. Right and wrong answers tend not to exist at all. Only possibilities and probabilities.
Sometimes the answer you need relies on assumptions that other people make before providing the solution to you. Sometimes they depend on what assumptions were ignored. You should know what the assumptions are and how they could have varied.
Sometimes even small changes in the assumption can create wide variations in possible answers.
John Mauldin offers this insight.
A businessman interviews a mathematician, an accountant, and an economist for a job. He asks them, “What is 2 + 2?” The mathematician answers, “Exactly 4.” The accountant replies, “Depending on your pension liabilities, depreciation, and taxes, approximately 2.”
The economist walks over to the door, shuts and locks it, closes the blinds on the window, leans over and softly asks, “What do you want it to be?”
If you are looking for support from your staff on some decision you want to make, be careful they are not just playing your preferred answer back to you. The agreement does not necessarily lead to the right answers. While he led Iraq, most long-serving advisors agreed with Saddam Hussein.
Hire people who are willing to disagree with you. Listen to them.
For those observing decisions, notice this point. Choosing assumptions carefully and picking data selectively is what “Spin” is all about. Learn to recognize it.
I build strategic, fact-based estate and income plans. The plans identify alternate and effective ways to achieve spending and estate distribution goals.
Be in touch at 705-927-4770 or by email at don.shaughnessy@gmail.com.
moneyFYI 