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CoursesWeek commencing Jan 22, 2024
Theme: Decision-Making
Quote
“People calculate too much and think too little.”
- Charlie Munger
Quote
- In the world of calculations, numbers often reign supreme. Metrics, analyses, and data-driven insights dominate our decision-making landscape. While these tools undoubtedly offer valuable information, We need to transcend the allure of pure calculation.
- Calculations are a means to an end, a method to distill complex scenarios into quantifiable elements. However, they should not be an endpoint; rather, they should serve as inputs into a more comprehensive thinking process.
- True thinking involves a deeper engagement with the complexities of a situation. It demands a holistic understanding that goes beyond the numerical surface. It calls for an exploration of context, an acknowledgment of uncertainties, and an appreciation for the human factors that calculations may overlook.
- Question the blind faith you sometimes place in numerical precision. Calculations can offer a semblance of certainty, but they often fall short in capturing the intricacies of the real world.
Question
What was the most important financial decision you’ve ever made?
Question
- The big-ticket items we purchase have a significant impact on our financial wellbeing. Think: house, car, education, eldercare.
- We make other choices in our lives that have an outsized impact on our financial lives, too. Sometimes, the decisions with the most financial consequence don’t directly involve spending, saving, or investing.
- The partners we choose, where we decide to live, and the passions we pursue can have far-reaching implications for our financial lives.
Quill
How to Decide
by Annie Duke
Quill
How to Decide by Annie Duke
- We are products of all the choices we make, including the seemingly insignificant ones. How do we learn to make high-quality decisions? By following the right processes.
- Too often, we mistakenly use the quality of a result to assess the quality of a decision. This is known as “resulting.” It’s important to remember that a favorable outcome doesn’t mean that we used a sound decision-making strategy to get us there.
- The Three Ps—Preferences, Payoffs, and Probabilities—are crucial in decision-making. Using this framework involves evaluating possible outcomes, preferences, and the likelihood each outcome will come to fruition.
- It’s smart to turn our decisions “outside in.” We all have an “inside view” of how we perceive the world. We filter things through our own circumstances and experiences, but when we give this perspective disproportionate weight, it can bias our decisions. It’s helpful to consider the way others would view the situation we’re in. Outside perspectives can help us and see facts differently to determine what is objectively true.
The most difficult financial decision I’ve ever made was
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Start, Stop, Keep
Look back. Look forward. We are here to help you build a bridge between where you are to where you want to be. We invite you to use this “Start, Stop, Keep” framework to help you consider what is working well for you, what you need to initiate, and what’s best left behind.
Start
What is one thing in the upcoming week that you want to make a concerted effort to start doing?
Stop
What is one thing you’ve been doing that is holding you back that you can commit to leaving behind in the week ahead?
Keep
What is one thing that you’ve been doing consistently that is helping you right now?
Friday Reflection
We build our lives one decision at a time. Every choice, whether it seems significant or trivial, carries the potential to set in motion a chain of events that can alter our trajectory. We find freedom through our decisions. We create destiny with agency.