How to avoid making bad decisions?
Since the rise of the Internet and as a result, the increasing dissemination of information, it surprises me how easily we can be influenced and how often we make decisions based upon minimal information. Some may be great decisions and others the opposite. We’ve all done it, including me.
Take this picture of a turtle, as an example. It’s lovely isn’t it? What a fantastic way to elicit your emotions and get you to think about your next holiday. However, you don’t know where I took this picture, it could be in an aquarium for all you know. The question is, if I used this picture to try and sell you an all-inclusive trip to Barbados, would it entice you?
We form opinions on headlines, pass judgements after reading social media posts and glance at pictures without demanding the frame they came in.
It baffles me how quickly we make decisions based upon as little context as possible, but we do it. Yet with all the resources at our finger tips, we often prefer to play a game of luck rather than invest in a game of effort.
Considered to be the greatest investor of all time, Warren Buffet’s success has always intrigued me. At 88 years of age, he comes from a generation way before the Internet but attributes his success to 3 essential characteristics; patience, discipline and risk aversion. At the beginning of his investing career he read between 600 and 1000 pages per day and still devotes about 80% of each day to reading. In a recent interview he was asked about the key to his success, pointed to a stack of books and said “read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it”. There is no doubt he is one of the most successful decision makers of all time. He believes that reading and thinking results in less impulse decisions and achieves a better life.
Whilst I appreciate Buffet’s lengthy decision-making strategy may not be for everyone, we can learn a lot from it. We live in a world where everything is accessible and instant, to make better decisions we need to be better informed. Yet, here we are often failing to google and failing to read beyond the headline of a book. We’re too lazy to read and too busy to think.
So, whether you are making a decision on a new job, your next car or simply whether to buy on Amazon or Ebay, don’t let perceived urgency pressurise you to make lousy decisions. Instead invest your time up front; ask, search, and wait for what you need. Not just choose the option that will do, but the option that will be best for you in your circumstances. After all, is it worth taking a hasty risk when bad decisions always cost us money and inevitably our time in the end?