This blog is in continuation with-
1) 10 ways to make better decisions
2) 10 ways to make better decisions - Caution- DANGER AHEAD
Do read these blogs too.
There are 2 types of decisions which we take-
1) The right decisions.
2) The wrong decisions.
1) THE RIGHT DECISIONS:-
Generally we take numerous right decisions everyday. Like when to wake up, attending the natures call, taking bath, making/having breakfast, reaching the workplace on time. Taking the decisions at workplace, prioritising the work at workplace, eating the lunch. Shopping for groceries, which vegetables to buy, paying the bills, driving a car or a bike. Doing routine chores etc. We make these decisions right almost every time without fail.
2) THE WRONG DECISIONS:-
Many times we make wrong decisions like making bad investments, making bad purchases, going in to bad debit(bad debit is the debit where you are losing money, and good debit where you are earning money), inculcating bad habits in to the children, Various addictions, purchasing a property at wrong place or time or price etc.
Do you recognise any similarities and dissimilarities?
Similarities are such things happens to most people, both kind of decisions are taken by the same individual.
But the differences are big. The right decisions were taken for small things, and decisions were consistently right. While the decisions which went wrong, were taken with the big things, they made huge impact, and they were consistently wrong.
No one wants to make wrong decisions then why people still make wrong decisions??
Well, there are many reasons. The common reasons are-
1) Feedback -
While making small decisions, the feedback is immediate. For example, we feel thirsty, we decide to drink water, drink water, and immediately we feel good. Or if we decide to drink water later, we will feel exhausted and more thirsty because of which we will change our decision to drink water right now, drink and feel satisfaction. Or while driving a car we can see where the car is going and make the adjustments to steering wheel so that it goes towards where we wanted it to go. Or we observe the speed of the car and make necessary adjustments to the gears, breaks and gas pedal so as to maintain the proper speed.
But while making big decisions until we get the feedback of bad decisions, the damage is usually already done. For example if we invest our money in the latest market's favourite stock which is trading at expensive valuations usually when we get the feedback about the worthlessness of the stock, the stock price would have already plummeted and we have no choice but to book loss. Other common example is buying an expensive gas guzzling SUV to show off our status, to realise later that the expensive purchase had many hidden costs and depreciation of value which actually brings our status down.
WE GENERALLY FEEL INSTANT GRATIFICATION FROM PURCHASING OF LIABILITIES.
2) Psychological biases-
To function efficiently our brain uses some cognitive shortcuts. These shortcuts are developed through thousands of years of evolution. These shortcuts enabled human race survive until now.
For example CONSISTENCY BIAS- due to which we try to be consistent with our previous thoughts or actions. Like if I say to someone that Toyota Prius is a good car then afterwards I try to tell things about Toyota Prius which are consistent with Toyota Prius being a good car. I won't go against my own statement of Toyota Prius being a good car, even if I found some evidence that the car is not that practical for someone.
Or if I say to a friend that I am an adventurous person and afterwards he invites me on an adventure expedition then it will be very hard for me to say NO. Because by saying NO, I will feel that I am going against my statement that I am an adventurous person. And I will also feel that I am breaking the trust of my friend, he may not believe me next time.
In ancient days such trust among the group members was necessary to stay in the group. Otherwise one may get expelled from the group which will result in loss of the protection from predators by being in the group, loss of efficiency, loss of guidance by experienced members of the group, loss of mating opportunity in the group etc. Which will result in very hard and dangerous life with drastically reduced lifespan.
Biases are like error of our cognitive apparatus, just like a magnifying lenses which always shows the picture bigger than is actual by a definite proportion.
We have many such biases built in to our thinking process which affects our decision making process to a great degree.
We will study more such biases one by one.
Conclusion:-
Right now just digest what you just read about decision making, the very important thing while decision making is the feedback. Feedback helps us correcting or decisions. If you want to take decisions when instant feedback is not available, develop a good logical strategy to move towards goal, decide checkpoints before starting and make sure you are going as per the plan. A good strategy will yield the results you want over time.
Know the limitations of your decision making process.
That's it for now. Hope the wisdom I am gaining is helping you at least as much as it is helping me.
The motive behind this blog is to share my experience in the journey towards health, wealth and happiness by using COMMON SENSE (SAMANYA BUDDHI) so that you get a more familiar with the terrain of the journey, you don't have to make the mistakes which I have done.
But still there are many more mistakes to be made and much more to be learned.
So see you soon..
Sumit
The POWER is when,
You use ODDS,
To get EVEN.
1) 10 ways to make better decisions
2) 10 ways to make better decisions - Caution- DANGER AHEAD
Do read these blogs too.
There are 2 types of decisions which we take-
1) The right decisions.
2) The wrong decisions.
1) THE RIGHT DECISIONS:-
Generally we take numerous right decisions everyday. Like when to wake up, attending the natures call, taking bath, making/having breakfast, reaching the workplace on time. Taking the decisions at workplace, prioritising the work at workplace, eating the lunch. Shopping for groceries, which vegetables to buy, paying the bills, driving a car or a bike. Doing routine chores etc. We make these decisions right almost every time without fail.
2) THE WRONG DECISIONS:-
Many times we make wrong decisions like making bad investments, making bad purchases, going in to bad debit(bad debit is the debit where you are losing money, and good debit where you are earning money), inculcating bad habits in to the children, Various addictions, purchasing a property at wrong place or time or price etc.
Do you recognise any similarities and dissimilarities?
Similarities are such things happens to most people, both kind of decisions are taken by the same individual.
But the differences are big. The right decisions were taken for small things, and decisions were consistently right. While the decisions which went wrong, were taken with the big things, they made huge impact, and they were consistently wrong.
No one wants to make wrong decisions then why people still make wrong decisions??
Well, there are many reasons. The common reasons are-
1) Feedback -
While making small decisions, the feedback is immediate. For example, we feel thirsty, we decide to drink water, drink water, and immediately we feel good. Or if we decide to drink water later, we will feel exhausted and more thirsty because of which we will change our decision to drink water right now, drink and feel satisfaction. Or while driving a car we can see where the car is going and make the adjustments to steering wheel so that it goes towards where we wanted it to go. Or we observe the speed of the car and make necessary adjustments to the gears, breaks and gas pedal so as to maintain the proper speed.
But while making big decisions until we get the feedback of bad decisions, the damage is usually already done. For example if we invest our money in the latest market's favourite stock which is trading at expensive valuations usually when we get the feedback about the worthlessness of the stock, the stock price would have already plummeted and we have no choice but to book loss. Other common example is buying an expensive gas guzzling SUV to show off our status, to realise later that the expensive purchase had many hidden costs and depreciation of value which actually brings our status down.
WE GENERALLY FEEL INSTANT GRATIFICATION FROM PURCHASING OF LIABILITIES.
2) Psychological biases-
To function efficiently our brain uses some cognitive shortcuts. These shortcuts are developed through thousands of years of evolution. These shortcuts enabled human race survive until now.
For example CONSISTENCY BIAS- due to which we try to be consistent with our previous thoughts or actions. Like if I say to someone that Toyota Prius is a good car then afterwards I try to tell things about Toyota Prius which are consistent with Toyota Prius being a good car. I won't go against my own statement of Toyota Prius being a good car, even if I found some evidence that the car is not that practical for someone.
Or if I say to a friend that I am an adventurous person and afterwards he invites me on an adventure expedition then it will be very hard for me to say NO. Because by saying NO, I will feel that I am going against my statement that I am an adventurous person. And I will also feel that I am breaking the trust of my friend, he may not believe me next time.
In ancient days such trust among the group members was necessary to stay in the group. Otherwise one may get expelled from the group which will result in loss of the protection from predators by being in the group, loss of efficiency, loss of guidance by experienced members of the group, loss of mating opportunity in the group etc. Which will result in very hard and dangerous life with drastically reduced lifespan.
Biases are like error of our cognitive apparatus, just like a magnifying lenses which always shows the picture bigger than is actual by a definite proportion.
We have many such biases built in to our thinking process which affects our decision making process to a great degree.
We will study more such biases one by one.
Conclusion:-
Right now just digest what you just read about decision making, the very important thing while decision making is the feedback. Feedback helps us correcting or decisions. If you want to take decisions when instant feedback is not available, develop a good logical strategy to move towards goal, decide checkpoints before starting and make sure you are going as per the plan. A good strategy will yield the results you want over time.
Know the limitations of your decision making process.
That's it for now. Hope the wisdom I am gaining is helping you at least as much as it is helping me.
The motive behind this blog is to share my experience in the journey towards health, wealth and happiness by using COMMON SENSE (SAMANYA BUDDHI) so that you get a more familiar with the terrain of the journey, you don't have to make the mistakes which I have done.
But still there are many more mistakes to be made and much more to be learned.
So see you soon..
Sumit
The POWER is when,
You use ODDS,
To get EVEN.
