Just a couple of other things to bear in mind to round off this series.
I’m in danger of overegging things by repetition here, but I think that the best thing we can do very often is simply to wait and defer a decision while we chew it over.
There’s a reason that we talk about sleeping on it. Our subconscious brain is amazing and can work on a problem while we’re unaware, even when we’re asleep, so that we awake with greater clarity about whatever it was we were stewing over.
Waiting is arguably the most powerful decision-making hack, while also being the easiest to implement. Take a breather before making a big decision. Put it off – if it isn’t urgent, of course – and address it in good time. Most decisions are not urgent and can wait for at least 24 hours, if not longer.
Eventually though, we’ll have to make a decision and take action. This is hard, especially, it seems, if there’s money on the line. The reason I have a job is that in making a recommendation, I am taking the decision from the client onto myself, which makes it easier for them. Especially as they know they can sue me if it turns out I was wrong!
They just have to make a yes or no decision – they don’t have to delve into the complexity of the decision. They just have to decide if they trust me and if they think I know what I’m talking about – or not.
The vast, VAST majority of decisions, financial or otherwise ar not life or death. There are very few decisions that you couldn’t recover from, given enough time. You might be set back a while, but probably most decisions are not make-or-break.
That should give us some relief from the angst of making the decision. While obviously more important than our sock choice, if we pick a duff fund for our pension, we’ll probably still be OK, especially if we spread our money around. There are practical ways we can reduce the risk of a negative outcome and we should pursue those, of course.
So push the damn button. Make the trade. Buy the car. Move house. Dump your loser boyfriend. You’ll probably be OK.
Prepare to be Wrong
But you should still prepare to be wrong! Things might go against us, and it pays to be prepared for that. Preparing to be wrong and steeling ourselves for that eventuality should strengthen our resolve, not paralyse us into inaction.
Be prepared – dib dib! – and you won’t be surprised. Take another thought experiment: What if this decision backfires – what is the worst-case scenario outcome? Could I recover from that? Chances are the answer is yes. This then becomes a calculated risk and maybe you can even mitigate some of the downside risk ahead of time.
Finally, keep your decisions under review, not just the outcome of the decisions themselves, but the way you made them. I did X and Y happened – why? If I did X again, would Y happen again or could I influence a different outcome?
I made this decision but I put it off for months because of my fear of the outcome. That outcome never materialised, and in deferring the decision I made things worse – how might I make the decision differently next time?
Say it with me: this is all about being INTENTIONAL. Smart people make good decisions by approaching them intentionally, bearing in mind all the steps in this checklist.