Category Archives: Decision making

Want to be free? Embrace uncertainty

Decision making, Failure, Planning, Uncertainty

Uncertainty is the price of freedom

I read somewhere that the price of freedom is uncertainty.  I have been reflecting on that a lot over the past few weeks and I agree with the statement.  When you have a nice steady job that pays the bills, you can live comfortably.  You have certainty.  Your salary will come into your bank account at the end of the month.  You can book your foreign holiday in 6 months time.  You can get a loan to buy a new car and know that in 3 years time you will be  happily paying off your car loan – ‘no worries’ as the Aussies say.

However if you are feeling unfulfilled and bored out of your mind and want to leave that job to start a business you will be trading your nice certain situation for uncertainty.  You may not know in 6 months if you can cover your bills let alone go on a foreign holiday.

The best advice is to start your business on the side as you keep your day job.  That way you can allow your business to grow as you keep your secure position.  When you see that the business works and can support you and when the demands of the business are such that you must leave then leave.  Your job is your safety net if the business fails.   The reality is that many businesses do fail or at least struggle to survive.  Statistics from the U.S. Small Business Association (SBA), show that 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10.

No regrets

Of course even if your business does fail it is not the end of the world.  Take the lessons of that failure with you and start again.  In many ways the worst failure of all is to live a life controlled by your boss which is safe comfortable, certain and ultimately boring.  Do you really just want to tip toe quietly towards death?  One of the top five regrets of the dying (from a book by Bronnie Ware) is not having the courage of living a life true to yourself and not pursuing your dreams.  The price of freedom is uncertainly.

Best wishes,

Tom

Check out my course 30 Experiments in personal change.  Get the course at the special price of $9.99 for readers of this blog.

Smarter Decision Making

Decision making, Personal Development Book Reviews

I am reading a book at the moment by a professional poker player, Annie Duke.  The title of the book is “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.”  I must say it is a very interesting read.  Annie was studying for a PhD in cogitative science at the University of Pennsylvanian when she ended up trying her hand at poker and making a career out of it.  She went on to win many poker competitions and millions of dollars from a 20 year career in poker.  Poker players have to make good decisions under pressure in a short amount of time or go broke – who better to learn decision making from than a champion poker player!

Game theory

It turns out that game theory developed initially by a man called John von Neumanns is based on poker.  Making decisions in the real world is similar to making decisions in poker in that there are so many unknown variables.  Chess is a different type of game in that in any chess situation there is a best move.  Chess is more mathematical and certain in that if you lose a game you can trace your loss back to a certain move or series of moves.

Motivated reasoning

When it comes to decision making we live in a really uncertain and ambiguous world but we like to think of ourselves as great decision makers.   When things go well we tell ourselves that we are great decision makers (or great poker players!) and when things go badly we tell ourselves that it was just bad luck.  We have a cognitive bias in that we tend to pay a lot of attention to confirming evidence (we have a great strategy and are great decision makers)  and work to discredit dis-confirming evidence (that we might have a bad strategy or have made poor decisions).  In other words we are not the objective, rational creatures we like to think we are!  When people form and cling to false beliefs, even despite overwhelming evidence, the phenomenon is labeled “motivated reasoning”.

When I drop my teenage son to the bus if the bus arrives just as I drop him he says “perfect timing” – a great result as he does not have to wait around.  This reinforces his belief that he is a great planner and does not waste time.  If he misses the bus then it was just bad luck and was not his fault.  No need therefore to examine the underlying flawed strategy of leaving for the bus at the last minute!

Summary

In summary none of us like to be wrong.  Our brains are built to seek confirming evidence that we are right and it is uncomfortable to dig deeper and consider the fact that our underlying strategy may be wrong.  After all changing one’s mind and changing one’s lifestyle or strategy is hard work and we prefer to ignore something which does not fit into our view of the world.  Awareness of this cognitive bias is an important step towards making better decisions and being a better poker player!

Best wishes,

Tom

PS  Special Offer:  Don’t wait for the New Year to start improving your life for the better.  Do it now!  Check out my online course at Udemy (at a discounted price of $19.99):  Transform your Life: 30 experiments in personal change.  (1,705 students to date and a 4.67 star rating out of 5!)