Living with the decisions we make. Part 2 Simple steps

 

As I posted last week that I could live with my decisions as long as I accept the guardrails imposed and I kept my overall goals in perspective.  This attitude helps deal with the emotional aspect of  living with decisions.    The goal cannot be overstated: confidence and control.  When things go wrong how do we maintain confidence and control?  If an investor losses money on an investment how do they confidently make the next investment decision?  How would we?

After an immediate emotional reaction the most obvious response to a decision going wrong is to learn from it.  This is probably the advice you have received from teachers, mentors, parents and anyone that may guide you through life.  We can learn a lot from decisions that result in negative outcomes.  We should be able to learn from all of our decisions, the good and the bad.  However, good decisions are often clouded by our own self gratification that we tend to not learn from them.  Decisions that do not lead to desired results give us the opportunity to reflect on our decision process.  In a lot of cases we need to take corrective action that helps us understand our mistakes and help us in future decisions.

So what are our first steps after we realize a decision we made is not going the way we want it to.  We have determined that the current circumstances are a legitimate concern (Legitimacy / Severity / Timing).  We also have determined that the severity requires some type of response.  What are the appropriate responses?  As with most things, I look at a continuum.  At one end of the continuum is a literal "Do nothing, just live with it.  On the opposite end a full court press to rectify the situation.  Usually our response is somewhere between these two extremes.

The act of not responding would occur in 2 possible scenarios.  First, the severity is low and any kind of response would not result in any tangible benefit.  You decide to go to a new restaurant.  You want to show your spouse how much you appreciate her.  The night does not go well.  The service was poor and the food was not prepared well.  You decide to forget the entire night.  You could complain and maybe get your meal comp'd.  Would that really help?  You wanted a nice evening and restitution may make your pocket book feel better but it is unlikely to make you feel that the evening was a success.  What to learn from this?  Maybe you should have looked on line for reviews.  It could be that your true tolerance for risk is very low.  A person that tolerates risk may approach the evening with less certainty as to the experience and may be able to appreciate their role in it.

A second reason for not responding is a lack of any positive outcome from doing so.  You invested funds and the endeavor was a total bust.  There was no wrong doing, nothing illegal, and no assets remain.  What ever you invested is gone.  You suck it up and move on.  You knew it was a risk and you went ahead with the investment.  Hopefully it was money you could afford to lose.  If it was money you could not afford to lose then you may want to learn about your motivations and what lead you to take this unnecessary risk.  Were you impatient or was there a level of desperation that motivated you to take a risk that was clearly dangerous.

A common theme of these scenarios is the transactional nature of them.  The decisions are go/no go.  Should I invest or should I not invest.  Go to a new restaurant or an established one.  The outcomes of these give us insight into some simple yet profound aspects of our character.  These traits are important because the provide the foundation for more in-depth decisions.  How we handle simple transactional decisions will dictate how we approach more complex decisions.   I have presented just three things we can learn, there is more.  How patient we are, our tolerance of risk and our appreciation of level of distress will weigh heavily on how we make decisions and how we live with those decisions. 

What is a bad decision that you just walked away from?  Leave a comment about it and what you learned from it.