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Why efficiency is dangerous and slowing down makes life better | Psyche Ideas

Inefficiency creates a buffer

Some inefficiency can be seen as an insurance policy.

Year after year, if you don't get into a car accident, you may think that you have 'wasted' money on insurance. But insurance enables us to be resilient against problems that could overtake us. To be prepared, we need to learn to live less efficiently.

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Why efficiency is dangerous and slowing down makes life better | Psyche Ideas

Why efficiency is dangerous and slowing down makes life better | Psyche Ideas

https://psyche.co/ideas/why-efficiency-is-dangerous-and-slowing-down-makes-life-better

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Key Ideas

We worship efficiency

We often see efficiency as good and inefficiency as wasteful. Economists teach us that increased efficiency improves our standard of living and make our lives better.

However, too much of a good thing has the opposite effect. Some motivation produces excellent performance while too much produce choking. Some choice creates good outcomes but too much leads to paralysis and bad decisions. The challenge we face is in finding the right balance.

Inefficiency creates a buffer

Some inefficiency can be seen as an insurance policy.

Year after year, if you don't get into a car accident, you may think that you have 'wasted' money on insurance. But insurance enables us to be resilient against problems that could overtake us. To be prepared, we need to learn to live less efficiently.

Analyzing our options in uncertain times

In the face of radical uncertainty, instead of asking which option will give the best results, we should be asking which option will provide us with good-enough results under the broadest range of future states.

Instead of maximizing return on investments, we should be setting a financial goal. Then we should choose investments that will allow us to achieve that goal under the widest set of future financial circumstances.

It's perhaps time to rekindle social norms that serve to slow us down in an uncertain world.

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Inefficiency

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Total efficiency constrains us. We become highly invested in maintaining the status quo because that is where we excel.

However, innovation is a threat and change is terrifying. Being perfect at something is dangerous if that is all you can do.

Inefficiency Allows for Change

Inefficiency forces us to develop other traits that give us the flexibility to adapt to changing circumstances.

Leave aside the fear of new challenges. Leave aside the fear of not being the best. When you put yourself in situations where you aren't the most skilled, you learn and grow and adapt. When change comes, you will have a broader range of skills to explore new possibilities.

Financial planning

 ...is the process which provides you a framework for achieving your life goals in a systematic and planned way by avoiding shocks and surprises.

Try making a budget
  • Create a full inventory of expenses in front of you: Categorize them into fixed and variable; urgent and non-urgent; necessities and luxury; avoidable and unavoidable.
  • You can create a hierarchy of needs and decide which one’s to address first. It’s all about prioritizing. 
  • Accept that you have limited resources and unlimited wants. But you have to manage your resources. The sooner you accept this fact, the better you can control your impulses towards avoidable expenditures.
Maintain a personal balance sheet

It’s a statement wherein you can jot down your assets and liabilities.

  • Pull together your bank statements and other proofs of the liabilities
  • List down your assets like the bank balance, all investments, home value, and value of other assets.
  • Take a sum of all the assets to arrive at the total value of your assets.
  • List down your liabilities the (car loan, home loan, credit card balances etc.)
  • The sum of all the liabilities will show the value of the money you owe.
  • When you subtract the value of liabilities from assets, you get your Net Worth.

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Budget for the life you have. When you’re going through your budget and assigning spending categories, be realistic. 

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This becomes a problem when you’re spending for a life you can’t afford. It puts pressure on your budget and encourages you to live in a paycheck to paycheck cycle.

Assess your financial situation, cut back on your expenses, prioritize your money goals, and then come up with a new spending plan.

Budgeting Without a Purpose

It’s hard to stick to a budget that doesn’t have a goal.

When there isn’t one, your budget becomes an afterthought rather than a spending plan to reach your financial goals.

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Technology, just like the mind, is a very good slave, but a bad master. The technologies by itself are life-giving and useful, but if we are spending the whole day on Twitter, fighting with whoever we don’t agree with, we are ruining our psychological health.

We tend to spiral into the news black hole for hours, but just looking at the front page of the New York Times or Washington Post once or twice a day should be enough.

Accidental Benefits Of Technology

Technology is neutral by itself, and how we use that tool matters. 

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Risk Compensation
Risk Compensation

Risk protection is normally done to minimize the harm a particular activity can do to us. There are various things we do to reduce our risk, to make ourselves safer.

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Risk Compensation Effects
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  • Children (and even adults) take more physical risks while playing a sport with protective gear.
  • Safety features like Anti-lock brakes in vehicles ended up increasing the accidents for taxi drivers in Germany
  • Child-proof caps on medicine bottles made parents careless about their being opened by kids, including the ones which don’t have the safety feature.
The Carelessness Effect

Having a safety device in place, and armed with the knowledge that we can push the envelope a bit, the appetite for risk increases.

  • People who have an emergency fund in place tend to be less careful about their investments.
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Part of the expected value is estimating the chance or probability of the situation.

Many people have poor judgement calculating real probabilities. They overstate the chance of rare events and underestimate the possibility of common events.

For example, many people don't like to fly on planes because they are scared they might be in a crash, yet the actual chance is close to zero.

The cost or payoff

The cost or payoff is not always clear.

For example, people feel more pain from the loss of a dollar than pleasure from a dollar gained. It is called loss aversion. 

The prospect theory combines the ideas of loss aversion and over- and under-weighing the odds. It helps to calculate the real expected value.

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  • Some people have become so specialized that they no longer grasp their purpose, and could fall into the trap of not bothering.
  • Some people sabotage themselves by never trying because they fear success or they fear failure.
  • There are also those that feel so hopeless that they cannot begin to think through it. 
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Idleness, or to be doing nothing, is not the same as laziness. Idleness can amount to laziness, but can also be a clever way of accomplishing tasks.

Idleness can be used to observe life, gather inspiration, gain perspective or to maintain health for important tasks. Sometimes the best way of using time is to waste it.

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If you courageously confront fear for 20 seconds every single day, before you know it, you’ll be in a different socio-economic and social situation.

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When we are curious, we view tough situations more creatively. Studies have found that curiosity is associated with less defensive reactions to stress and less aggressive reactions to provocation.

Reduced group conflict

Curiosity encourages members of a group to put themselves in one another’s shoes and take an interest in one another’s ideas rather than focus only on their own perspective.

Thus, conflicts are less heated, and groups achieve better results.

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