76 STASHED IDEAS
One factor that will determine how we behave is where we fall on the cold or hot state of the spectrum.
A hot state is when our emotions like fear or exhaustion take over. We are so eager for something that we will grab it the moment it becomes possible. Over the last year, an enormous amount of pressure has been built up. We are about to enter a massive hot state as the pandemic shifts.
Our cold, higher thinking is slow thinking, and hot thinking is fast thinking.
As humans, we struggle to balance the two thinking processes. In a hot state, we have an enormous desire to want. We want to buy impulsively with no concern for our future selves. As countries reopen, the hot states will strike intensely and be very dangerous for our budgets.
Pay attention to the moral licensing words, "I deserve it because..." The permission-giving has some truth to it, but then there's future you that also deserves the good.
After a year of holding back on festivals, plays, or going out without concern about a deadly virus, many of us will spend beyond our limits if we don't prepare for the powerful emotions that will sweep through us.
Our minds are not just based on mathematical equations but mixed up with feelings, reactions, and mental shortcuts. Behavioural economics identified over 100 ways people from all walks of life fail to think straight when it comes to money.
But when we are aware of these biases, we can use the opportunity for self-agency.
Conservatorship/guardianship has recently come under the spotlight with the documentary about Britney Spears, along with the ongoing hearings about her own conservatorship.
Historically, conservatorships/guardianships were designed to protect people with decreasing faculties from those who want to take advantage of them by securing their resources. Independent third parties are assigned legal authority to make decisions on their behalf to best preserve their wellbeing and financial interests.
The conservatorship model has been used to offer similar protections for those who struggle to care for themselves and manage their financial affairs and resources. Several mental health conditions can also make individuals vulnerable to injury, theft, and fraud.
Those who petition for a conservatorship or guardianship must meet a high legal burden of proof that demonstrates to the judge the person's incapacity. If they succeed, they are subject to strict, ongoing court supervision.
Once a conservatorship/guardianship is in place, the legal burden shifts to the individual to show a court that they can keep themselves safe, manage their own affairs, and no longer need conservatorship/guardianship.
This often motivates the individual to submit to treatment, gain insight into their illness, and make positive choices to stay healthy and self-governing.
From 2008 to 2018, 41 states spent less per student after adjusting for inflation.
The increase in the number of people enrolling in college nationwide means less money is available per student.
Many entry-level jobs now require undergraduate degrees. In turn, colleges are making changes to increase the value of the student experience.
It means hiring more faculty, improving the buildings, and making technological improvements, putting more responsibility on the students to pay the costs.
Student loans allow families and students not to worry because they can just borrow to pay for it without deeply questioning what they're really paying for.
Some schools take advantage of the student loan system by setting their tuition at the maximum amount undergrad students can legally borrow.
The most expensive university in the US is Columbia University in New York City. It costs $86,257 a year. Northwestern University is at $78,654, and Barnard College costs $78,044.
Tuition fees include faculty salaries, institutional support, research, student services, campus maintenance etc. It is not part of room and board and other fees. Students considering attending a particular school should look at the net-price calculator on the institution's website.
The cost of college has risen 25% over the past 10 years.
A 2020 survey pointed out that 56% of students feel they can't comfortably pay their tuition. 7% of respondents have had to unenroll and find full-time employment.
After the Great Recession, states faced an economic crisis and started investing less in universities and colleges.
They cut the tuition credits or financial aid they provided to students. The schools were required to make up the loss of money. That is the reason for the drastic rise in tuition after 2010.
We often fill our lives with possessions we don't need.
This is named the Diderot Effect: the tendency to over-consume, spurred by our need for betterment.
French writer and philosopher Denis Diderot once acquired a beautiful scarlet dressing gown. So he got rid of his old gown and admired the new one. But now the rest of his possessions felt old, so he went on a buying spree to replace his old possessions with more extravagant options, eventually leading him into debt.
All this started with one precious object. Diderot was the master of his old robe, but a slave to the new one. We do the same. We buy a cabinet, then buy objects to put on the shelve.
It is possible to curb impulse buying and move to mindful consumption.
Confirmation bias is when you actually seek out evidence to support a predisposed belief.
In this strip, Dilbert's boss believes that his managerial skills can affect the company stock. His belief is later reinforced, mostly by coincidence. However, because he was affected by bias he mistook the research as confirmation.
Sometimes, it is hard to let go of something valuable without realizing that letting go is greater than we think.
Sometimes, a loss can feel more powerful than a gain of the same magnitude and vice versa. Considering the pain of a loss – or euphoria of a gain – can weigh heavily on future decisions it can cause more harm than good.
Dilbert’s boss shows overconfidence by assuming that all management is – himself included – above average. This is hardly the truth, in general. As for Dilbert’s boss, he completely misses the jab attacking his math skills because he’s too focused on himself.
Overconfidence of bosses can end up putting their companies in risky ventures. We all need to take some time to cool our egos and look at the world around us more realistically.
Framing refers to how a person makes decision depending upon how the information is presented. Framing effect is often used in marketing to influence decision-makers and purchases.
You can use this strategy to engage customers to buy your products. But depending on how you frame your messages, it can also be used to make the best of a bad situation.
Written by Scott Adams, is an 'infamous' comic strip that shows a humorous look in office life, but also manifests lessons on behavioral economics.
.... refers to the study of how social and psychological factors (decisions made by an individual, institution or business) can affect the market and its resources.