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3 Reasons Why You Make Terrible Decisions (And How to Stop)

Status Distorts Our Perceptions

Our perceptions and emotions get skewed when we are in the presence of extreme beauty, power and wealth.

People of status and power are constantly bending reality around us and creating a ‘Halo Effect’, making us feel that they are smarter, more amusing and charismatic than they really are. This affects our judgement and decision making.

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Taking risks is a way towards potential growth, even if it is not according to the original plan.

When entrepreneurs fail at their startup, a large chunk of them still benefit by:

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  • A pivot towards another company.
Decision Modeling

One needs to take into consideration that any risky decision has the probability of failure, keeping in mind the potential benefits of not reaching the goal.

The ideal decision model should:

  1. Calculate or research about the baseline likelihood of success.
  2. Take a self-assessment of one’s own ability.
  3. Take into account the situation where the results of the decision are less than required.
  4. Take into consideration the opportunity cost.
  5. Ask oneself if the activity being undertaken is providing joy even without any outcome.
Make Better Choices
  • Seek good information. Be skeptic and never just assume that what you’re being told is always true.
  • Avoid common pitfalls, like making decisions without enough time or in...
Life doesn’t happen to us; we are an active participant. We get out of life what we choose.”
Mike Whitaker
All Decisions Are Not Created Equal

  • Small decisions: Impact you for a day, such as what you wear and what you eat.
  • Medium decisions: Impact your life for a year or so, such as deciding to go back to school or take on a roommate.
  • Big decisions: These are made once or twice a year, and successful people use their goals to navigate to the right choice.

Decision making using goals

Successful people have 4 strategies that help them clearly define what they want:

  • They keep 5 prime goals and stay focused on them.
  • They identify the top priority and give it favorable treatment when making decisions.
  • They look for goal and decision overlap, treating this decision with more care.
  • They appreciate momentum, identifying the benefits of continuing to move in the right direction.