I have been watching people grapple with big life decisions. Should I accept that disappointing offer on my property? Should I move closer to my children? Should I walk away from my life’s work because my values have changed? Should I end my long-term relationship?
It has been interesting to see how people engage with these decisions. Likewise, even watching myself engage with decisions has got me thinking. These are not easy decisions. They are tough questions to answer because they involve complex situations. They do not have a right or wrong answer. These decisions have long-term and far-reaching consequences.
So often people want to make it simple. Well-meaning friends or family may suggest that ‘there is only one answer,” or that “you should just do this, because it worked for me.” People give advice based on their experience and perspective.
What is needed, however, is for you, as the decision maker, to clarify what is valuable to you in general and in your specific situation. You must understand the facts, but it is about more than just facts. You must figure out what the big pros and cons are, and then how they match up to your personal life values and your priorities.
There are basic priorities like ensuring your current and future basic needs are met. Jumping from job to job, because you value excitement, will rarely ensure financial security. However, leaving a long-term job to travel for a while, when you already have a bank balance and retirement capital, is a different story. Once the basic needs have been satisfied, it leaves you with choices and only you know which choice will satisfy your values and priorities.
Knowing our true values, and priorities, and getting a clear picture of the consequences of the decision, is hard. It is difficult because our brains trick us. We take mental shortcuts that are rooted in our biases. These biases are often what drive our decisions subconsciously.
We look for similarities to simplify our decisions or look for advice from people who are like us. We rush to judgement instead of taking our time to sift through all the facts. We take our own previous experience to be the only truth, or our own perceptions as the whole truth. We protect against loss more than we anticipate gain. We give more weight to the known, rather than the uncertain opportunity of a change. We prioritise what is near over what is far away. It is therefore difficult to think of the long-term implications over the short-term consequences.
Depending on our own experiences, history, and personality traits, we will each have unique challenges with these blind spots, and with decision-making in general.
We need help with seeing what we cannot see. We need people who can help us see clearly. We need people who can help us reflect and crystalise what is at stake and how we are making our decisions.
As the world is changing so fast, we will need to make more decisions. We will need to improve our decision-making frameworks and skills. We must listen to less advice. Others telling us what to do. Instead, we must surround ourselves with people who can help us make our own decisions.
How will you be making your next important decision? And who will be there for you to help you decide?
Ps. At Foundation Family Wealth, we partner and invest in our clients’ financial decision-making. We start by building a decision-making framework and then help our clients reflect on their response. If you are a client with an important life decision, contact us. If you are not, but you’re looking for a decision-making partner, why not find out what we’re about by making an appointment.
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