One day, when I’m a multi-billionaire, I’m going to buy a massive plot of land out in the frigid wasteland of the northern Yukon and build a vast complex of unnecessarily poorly-designed buildings. There will be no roads that lead there. No utilities. No central heating. And insufficient staff to maintain the structure. I’ll then call it, “The Hall of Fame of Bad Decisions.”
It will be perfect. Because not only will the hall itself be a bad decision, but anyone who ever attempts to visit it will clearly be making a bad decision as well.
Inside the hall, we will have exhibits for all of the worst decisions ever made. There’d be one for that time when Kodak, despite owning 90% of the market share of the camera industry and inventing the digital camera, decided not to sell them and went bankrupt as a result. There will be another for the time when Decca Records passed on signing The Beatles because they thought “guitar bands are on the way out.” There will be a whole wing for stupid military leaders who tried to invade Russia. And we’ll have a special “Tiger Woods” wing where we rotate in/out celebrities who wreck their own careers by doing something exceedingly dumb.
It’ll be great.
And I guess, while people are there, we’ll trot out a speaker or two and give seminars on how to not make such awful choices. They’ll offer some principles on how to make better life decisions.
Maybe that seminar would go something like this:
Understand Value and Biases
All tough decisions are essentially about weighing values. There’s financial value, emotional value, social value, intellectual value, and so on. You have to consider all of them, weighing them appropriately. And not just in the short-term, but in the long-term as well.
This “weighting” of values is incredibly difficult, largely because we struggle to see things clearly.
As a general rule, we are all heavily biased towards the short-term rewards and towards emotional value. We are biased towards our pre-existing beliefs and protecting our reputation. And we’re also bad at seeing long-term rewards clearly because it’s difficult to look past our immediate fears and anxieties. Our emotions color everything we see.
Our “default” decision-making also makes it incredibly painful emotionally to give up on something we’ve worked a long time on, or to consider that we may have been wrong for years.
The fact is, we’ve all been wrong for years. We’re all wrong about our value estimates. And until we can be honest about how wrong we were in the past, we won’t learn to make better value judgments moving into the future.
Our “default” decision-making also encourages us to avoid short-term failures, even if that means missing out on long-term successes.
No, the sweet spot in decision-making is to find the short-term failures that enable the huge long-term successes to happen in the first place. Because this is what most people are bad at. And because people are bad at it, this is where most of the opportunity lies…
Lose on Purpose (Sometimes)
Ever hear those stories of wildly successful entrepreneurs and how they had, like, 23 failed businesses before they made it big?
The lesson we’re all supposed to take from this is that persistence and hard work is the key to extraordinary success.
And sure, whatever…
Usually, we can’t help but look at them and think about how “lucky” they got. I mean, Amazon! Who knew?!
What we don’t consider is that out of those dozens of failed, half-baked business ideas were all wagers with limited downside and extremely high upside. That is, if they lose, they lose a little. But if they win, they win a lot.
Let’s say I gave you a pair of dice and I told you that if you roll double ones, I’ll give you $10,000. But each roll costs $100. How many times would you roll?
If you’re not bad at math, you would know that you should spend all the money you have rolling those damn dice.
Most people look at each decision as a single roll of the dice. They don’t think about the fact that life is a never-ending sequence of dice rolls. And a strategy that loses a lot per roll can actually make you a big winner in the long run.
Yes, you will lose the dice game way more than you win. But when you win, your winnings will far outstrip your losses, making it a worthwhile wager.
You can apply the same “risky” behavior in your life to achieve more optimal long-term results:
- Propose “moonshot” ideas at work knowing that 90% of them will get shot down, but also that if one of them gets accepted it will be a huge boost to your career.
- Expose your kids to difficult subjects at an early age, knowing that most likely they won’t take to it. But if they do, it will give them a huge advantage throughout their life.
- Be excessively bold in your dating life, stating exactly who and what you want, knowing that the vast majority of people will not be compatible.
- Buy a bunch of difficult books expecting that most of them won’t be useful or comprehensible to you, but also that, occasionally, one will completely change your life.
- Say yes to every invitation knowing that most of the events/people will be kind of dull and you’ll just go home early, but that occasionally you’ll meet someone really important or interesting.
When you think purely in terms of the immediate result, you cut yourself off from the biggest potential gains in life. And the reason most of us do this is because of our pesky emotions. Our emotions are short-term biased. They are obsessed with the present moment. And this prevents good decision-making.
Treat Your Emotions Like You’d Treat a Dog
Here’s one thing I’ve noticed over the years: shitty dogs almost always have shitty owners. The dog’s level of discipline is reflected in the owner’s emotional maturity and self-discipline. It’s very rare to see a dog that’s wrecking the house, eating all the toilet paper and pooping all over the couch and the owner has their own shit together.
This is because our connections with dogs are purely emotional. And if we suck at dealing with our own emotions, then we’ll suck at dealing with our dogs. It’s that simple. If you don’t know how to limit yourself and tell yourself “no” when necessary, then, well, don’t get a dog. And if you do, don’t fucking move into my building.
Our emotions are kind of like our dog that’s living inside our head. We have this part of ourselves that just wants to eat, sleep, fuck and play, but has no conception of future consequences or risks.
That’s the part of ourselves we need to train.
Our emotions are important. But they’re also kind of dumb. They’re not able to think through consequences or consider multiple factors when acting.
Our emotions overreact to things by design. They evolved to keep us alive when we were hunting water buffalo on the savannah and shit like that. When we’re scared we want to run away or hide. When we’re angry we want to break stuff.
Thankfully, our brains evolved logic and the ability to consider the past and the future and all that great stuff. That’s what makes us humans. And not dogs.
The problem is, our “dog brain” is actually what controls our behavior. You can intellectually know that eating ice cream for breakfast is a bad idea, but if your dog brain wants fucking ice cream for breakfast, then that’s ultimately where your body is going to go.
It’s only by training your dog brain with your people brain, “No, bad Mark, ice cream for breakfast is bad, go do something else that feels good and is healthy,” that your dog brain gradually learns.
Do that enough and you have a well-behaved dog brain.
Emotions are great for giving you that umph of passion and spirit, the same way a dog is great for running and fetching stuff and being a great friend and barking when someone weird is hanging out by your bedroom window.
But the dog is limited. It needs context and direction to behave well and function. And that’s your job as the dog owner. Similarly, your dog owner brain must train the dog brain to sit down and shut up when necessary. You must give yourself context and direction. Train yourself to adopt the correct habits and make better decisions. Reward and punish yourself.
Love your dog brain (i.e., love yourself), accept your dog brain (i.e., accept your emotions), but also discipline them.
And every once in a while, indulge yourself… that’s a good boy. Yeah, who’s a good boy? Who’s a good boy? Yes, you’re a good boy.
Optimize Your Life for Fewest Regrets
Regret is sometimes called a “rational emotion” by psychologists. And not really because regret itself makes us more rational—at least not directly—but rather the way we predict regret is often done in a rational-looking way.1
In making decisions, we’ll often consider the options available to us, imagine our future selves after choosing one of these options, and then try to feel how much regret we experience in this simulated future state. We then run this simulation again, choosing a different option, and compare that simulated state of regret/non-regret to the others.
This ability is both a) fucking amazing when you think about it and b) incredibly useful as long as we use the most accurate and complete information available to us (by using all the ideas we’re covering here, of course).
Similarly, a lot of us love envisioning massive success. But if we ask, “Would I regret never having that success?” usually we find that the answer is “no.” Only when it’s “yes” should we probably make the sacrifices to achieve it.
Sometimes, the right decision becomes crystal clear when put into these terms. Legend has it that Jeff Bezos left his cushy, high-paying job to start Amazon because it was so obvious to him that he’d regret it if he got old and didn’t at least try this whole “internet thing.” Staying at his job, on the other hand, carried a lot of future regret that was apparently quite palpable for Bezos.
I personally know a lot of people—myself included—who ultimately made big life decisions largely based on the path of least regret. These decisions are almost always described as the best decisions they’ve ever made. Go figure.
Instead of basing your decisions around success/failure, or happiness/pain, base them around regret avoidance. Our regrets are usually the best measurement of what is actually valuable to us in the long-run.
Write Shit Down
The best way to help you sort out all of your emotional drivel from actual decision-making is to write things down.
Writing things down is a simple but powerful way to clarify everything that’s swirling around in your head. I get emails from readers all the time with long screeds about the issues in their lives only to have them say at the end that they don’t need a reply because writing it all out was so cathartic and revealing for them.
The act of writing forces you to organize and make concrete all the emotional turbulence swirling around in your brain. Vague feelings become structured and measured. Your self-contradictions are laid bare. Rereading what you write reveals your own logic (or lack thereof). And it often reveals new perspectives you hadn’t considered.
And when it comes to mulling over a decision, there are a few specific things you can write about to help you if you’re having difficulties:
- What are the costs and benefits? First, take some time and do a good old-fashioned cost-benefit analysis of your decision. But don’t just do the old-fashioned “pros” and “cons” list. Add a couple more columns. Separate your “pros” into both long-term and short-term. Add a column for regrets associated with each decision. And note if there is any long-shot potential for success (see Principle #2).
- What is your motivation behind the decision and is that a value you want to cultivate in yourself? All the decisions we make, big or small, are motivated in some way or another by our intentions. Sometimes this is very straightforward.Last night, I was motivated by hunger to eat something and there was a burrito in front of me, so I shoveled it into my face hole.Sometimes it’s not so straightforward though. Problems arise when our intentions a) aren’t very clear to us and/or b) conflict with our core values.For example, are you buying that car because you would genuinely benefit from owning it, or because you’re trying to impress the people around you?Or are you filing for full custody of your kids because you think it’s truly in their best interest, or are you trying to get revenge on your ex after finding out they are dating someone new?
Are you trying to start a business because you enjoy the challenges and ups and downs of making your own way, or are you jealous of your friends that have successful businesses and feel like you don’t quite measure up to them?
If you identify some ulterior motives when weighing a decision, stop and ask yourself if your intentions align with who you want to be.
And if you’re asking yourself, “Well shit, I’ve never thought about who I want to be. What should I do?” Then I think you should take out a fresh piece of paper and start writing that down.
For instance, here’s my Horrible Decisions Hall of Fame Table:
- It’s funny
- Oh, Canada!
- Get to research celebrities with hookers
- Lot of work
- Really, really far away
- Joke is only funny for so long
- Illiquid asset
- Seriously, when am I ever going to travel to this thing?
- For the rest of my life, I’ll be the “Dumb Hall of Fame” guy.
- DOING: Tons, lost time, money, etc.
- NOT DOING: Uhh… none, really.
- Do I really want to dedicate a huge portion of my life and legacy to being a clever smart ass? Probably not.
So there you have it. No “Horrible Decision Hall of Fame.” Why? Because it’s a horrible decision.