How to Make the Next Right Decision
How to Make the Next Right Decision
Whether it’s starting a new job or leaving the current job, going back to university, travelling/moving to a new city or deciding to buy a house, we all make life-changing decisions every day. Not only that, but when we make a decision similar to the opportunity cost, we are effectively ‘cutting away’ from certain possibilities and choosing one option or course of action over the other alternatives. For example, if you go back to university to study full-time, you are effectively choosing to miss out on full-time income and employment experience, networking and other opportunities. All of this can only make decision-making a challenging process. So how do you make the right decisions and know whether you have made the right decision?
The Sunk Cost Fallacy
The sunk cost fallacy is our tendency to make decisions based on the amount of time, money, or effort we've already invested in something rather than what will bring us the best results in the future. For example, it's like realising your current career, job, studies, or location you live is not serving you anymore and still sticking with it because you don’t want to ‘waste’ the time, money and effort (the sunk cost) you have already put into it.
Sometimes it’s difficult to accept that something we've invested in isn't working out anymore, and it can be tough to let go when we've put a lot into it. But the past and what you have already invested are all gone. No matter what you decide to do in the future, there is no way of recovering them. So, it's better to focus on the present circumstances, not dwell on the past or what we have invested and make decisions that impact our future outcomes. Ultimately, it's better to make a choice that leads to better results for our future rather than sticking with something just because we don't want to see our past investments go to waste.
So, next time you find yourself struggling to let go of something, take a step back and ask yourself if the sunk cost fallacy is swaying you. It's better to change now rather than continue down a path that isn't right for you.
Quitting Framework
So, you have taken a step back and figured not to let sunk cost fallacy sway you. But if you are deciding on quitting or whether to stick with something, how do you make that decision? Stephen Bartlett's "Happy Sexy Millionaire" is an excellent book to answer this question as it outlines the ‘quitting framework’.
According to the framework, the first thing you should do when considering quitting something is to ask yourself why you're thinking about quitting in the first place. There are generally two options here: either you don’t enjoy the thing anymore/it’s unpleasant, or it's hard.
a) If the thing is hard, ask yourself if the potential reward of continuing is worth the challenge. If the answer is yes, then you should keep going. If the answer is no, it might be time to consider quitting.
b) If you don’t enjoy the thing/it’s unpleasant, ask yourself if you believe there is a way to make it enjoyable again/make it not unpleasant. If the answer is no, or if you've tried your best and still haven't been able to make the thing enjoyable/not unpleasant, then it might be time to quit. However, if the answer is yes, ask yourself one final question: is it worth trying to make it enjoyable or not unpleasant? If the answer is also yes, then you should stick with it. If the answer is no, it might be time to move on.
This framework helps to decide what to quit, stick with, and be more intentional about your decisions.
Questions to ask yourself when making a decision
a) Will I regret not making this decision? For example, suppose you are considering starting a new exercise routine, joining a volunteer organisation or saying yes to that opportunity. Ask yourself, in one year, if you will regret not doing it today. The pain of regret is far worse than anything.
b) What is the risk of doing nothing? Inaction often feels like the safe path but can also have consequences. Doing nothing is also a decision, and it's important to consider the risks of inaction.
c) What is the worst-case scenario? For example, if you decide to invest some money in something, change careers, or start that side project, what’s the worst thing that could happen? Can you live with that/overcome that outcome? If the answer is yes, then make the decision.
Ultimately, the most important thing is to decide by not overanalysing any of these questions, worrying about all the different options or other people’s opinions.
“You do not know where your decisions come from; they pop up like hiccups. People have a great deal of anxiety about making decisions, ‘Did I think this over long enough? Did I take enough data into consideration?’ And if you think it through... you find you never could take enough data into consideration. ”
How do you know whether you have made the ‘right decision’?
Most of the time, it comes down to picking one of the options available and sticking with it. Whichever option you choose, you'll never know how the other options would have played out. There is no way for you to figure out what the alternative would have been. So, once you go through the above questions without overanalysing them, you have to pick whatever option you think is the best. If that option ends up being the best and works out for you, then perfect. But if it doesn't work out, adjust based on the situation, and move on. Because at any given point, there is no way for you to know the outcome of your decision beforehand.
For example, suppose you are considering moving overseas for a new job/career or staying in your current job/career and getting promoted. Say you decide to go overseas, and that job ends up being the best job ever for you, and you receive so many further opportunities because of that - you would consider that a ‘right decision’. But you could also move overseas for that same new job/career and get laid off permanently within a few months or get caught up in an accident or a firearm violence event - you would consider that a ‘wrong decision’. Likewise, if you instead decide to stay in your current job/career and get promoted, you may have a positive or a negative outcome. But you wouldn’t have known that outcome before you made the decision.
You don’t have the option to go into the future to know for sure that you are making the 'right decision’ now.
Key Points:
Recognise that you don't always have a choice: This doesn't mean you should rush into every decision without considering the consequences. But the effects of not making a decision can be just as detrimental as making the wrong one. In these cases, you must recognise that you have no choice but to act.
Don't overthink things: Trust your intuition, and don't get bogged down by trying to make the perfect decision. The ideal decision isn't always possible, and overthinking can lead to paralysis and inaction.
Don't be paralysed by your options: It's natural to want to make the best decision, but sometimes having too many options can be overwhelming. If you're good at many things, pick one and go with it. You can always explore your other options later.
Take action: Instead of spending a lot of valuable time deciding which option is the best, take action and start working on something. You'll get a better sense of what works and what doesn't as you go, and you'll be able to make more informed decisions in the future.
Once you make that decision, you must stick with it and not look back. Be confident with what you have decided, live with that decision and move on. Ultimately, making the right decision is about not being swayed by the sunk cost fallacy, recognising when you have to act, focusing on a few key questions/options, not overthinking, trusting your intuition, and taking action.