Do you ever think to yourself, “Why did I do that?” after making a decision? We all make poor choices. For example:
- Buying a SUV that eats up all of your money
- Starting a relationship without being in love
- Accepting a job that you don’t enjoy
- Inventing goods that no one wants
Things happen (the above examples are all about me). However, the interesting thing is that these terrible choices never appear horrible at the time.
Warren Buffet’s & Charlie Munger’s Decision-Making Process
I’ve been reading about Warren Buffet’s and Charlie Munger’s decision-making processes, two of the world’s most successful investors. Buffett and Munger have a learning relationship, according to Alice Schroeder’s biography of Warren Buffett. Buffett and Munger have a learning technique focused on what you should avoid doing, according to Alice Schroeder’s biography of Warren Buffett. They recognize faults and make every effort to avoid them. The old saying goes:
“Smart people do stupid things”
Charlie Munger
As Charlie Munger puts it. It is impossible to prevent making a mistake. You may, however, make every effort to avoid making poor choices. You can also make your blunders by learning from other people’s mistakes. That way, you’ll be able to learn more quickly.
Do not Overthink
Intelligent people are far too focused on doing the right thing. They aspire to have the ideal life, career, home, business, automobile, vacation, and so on. You get analysis paralysis when you place too much pressure on yourself to make the proper judgments.
Buffett and Munger have a learning technique that is centered on what you should avoid doing, according to Alice Schroeder’s biography of Warren Buffett. They recognize errors and make every effort to avoid making them.
I recently had a conversation with a buddy who was looking for a new job, which went like this:
I appreciate the company I work for, but my job isn’t engaging anymore, he said when I asked him to explain his thought process. This is my fourth year doing this job. Yes, I’ve been promoted twice, but the work remains the same. As a result, I’ve been researching different firms. But what if I try something new and it doesn’t work out? It’s going to be necessary for me to relocate. “Just hearing myself communicating about it causes me to do something else; overthink it. We both burst out laughing. I’m the same way when it comes to overthinking. I’m sure you’ve been there as well.
You become paralyzed if you overanalyze every single decision. Result? Nothing. That’s a terrible outcome! People waste their lives in this manner. Making yourself aware of your thinking process is the only way to stop overthinking. When I asked my friend about his thought process, he discovered how ridiculous it was. You do not influence the future. So don’t even consider it.
Make Minor Choices, Decide Frequently
I recently finished Peter Bevelin’s Seeking Wisdom. It’s about Charlie Munger’s method of thinking. Avoiding mistakes is one of his decision-making techniques. However, this might be construed in a variety of ways. You may be afraid of making decisions because you are afraid of making mistakes. You don’t make any decisions as a result of this. As Munger puts it:
“The difference between a successful business and a bad business is that good firms present you with a series of easy choices. Bad businesses make difficult decisions regularly.”
That Munger quote can be interpreted in a variety of ways. This is how I interpret it.
It’s simple when you make little decisions early on before they become major ones. When you put off making decisions, they grow larger – and more painful. For instance, I’m not pleased with the email service provider I use to send out my newsletter. Their help is greatly appreciated. This is something that has been on my mind for over 1.5 years. My list was less than half the size it is now at the time. I just had one online course as well. Now I’m down to three. Moving to a new provider is becoming increasingly difficult. It would have been simple if I had relocated earlier. It’s become a torturous procedure. It’s the same in real life. It becomes more difficult to exit a terrible relationship the longer you stay in it. It’s also true in your profession.
Better Decisions Are Made When Decisions Are Made Earlier
The earlier and more judgments you make, the more likely you are to make better ones. There are no right or wrong decisions, I often remark – only choices. That isn’t fully correct. There is, of course, a variation in the quality of our options. That is the subject of a separate article. But here’s the thing: deciding not to make a decision is a decision in itself. That’s fine if it’s a deliberate move. You consider something and determine that the wisest course of action is to do nothing. However, I’m referring to deferring a decision, as in “I’ll think about it later. “You’re always making decisions, no matter what. We need to make more deliberate decisions sooner rather than later. Because, in the end, all you need is a few good choices throughout your lifetime. What is going to be your best? You only find out after you’ve taken a decision, as you might expect.
