In this episode, we discuss how it’s important not to fool yourself because it just leads to bad and wasteful things.
Full Transcript
Hi Everyone, welcome to the You’re Daily Cup of Joe Podcast, with your host Joe Bautista. In this podcast, my goal is to give you quick lessons that you can reflect on in your journal so you can grow yourself physically, mentally, emotionally, and spiritually and have a better career, better relationships, and better personal finances while you enjoy your morning cup of coffee.
I’m also the author of the book “More You Know, More You Grow: How to Get Better Every Day”. In this book, I wrote down over 30 tips to help you grow in those four cornerstones. I’m also the founder of Grow With Joe, where I combine self-development coaching and financial planning for Latino Professionals.
At the end of today’s podcast episode, I’m going to give you a prompt question to reflect on in your journal. The idea is to take one to five minutes to reflect on today’s lesson and write a minimum of one paragraph on how you can apply the lesson in your life life. You can use an actual journal, a word document like on Google Drive, or your note-taking app like Evernote. The idea is that you’re actually thinking about how to process the information to help you improve your life.
In today’s episode, we’re are going to talk about the easiest person to fool, and the easiest person to fool is yourself. The reason why the easiest person to fool is our self because there are 25 cognitive biases. I’m not going to explain all the cognitive biases but I recommend you do a google search or look at the show notes to get a link to the Wikipedia page.
I’m just going to go over how to deal with them. The thing with this 25 cognitive biases is that you might have one or all 25 that you’re dealing with and the key thing is that you should work on all of them at once, you should just target one, beware of that bias so it doesn’t take advantage of you.
Another bias is reciprocation tendency where if someone does a favor or disfavor to you, you want to reciprocate the behavior back to the person. This is used in many situations, where someone gives you a meal, and you want to reciprocate that providing something back.
If I go into a candy store, and they provide me a free sample, then I’m going to want to buy something. I remember going into a Candy Store in Chicago that was owned by a Marine Corps veteran. I saw that he had a Marine Corps pin on and we started talking, and I mentioned that I was a Marine as well. Then he offered me a free sample, and from there I felt like I had to support his business.
He gave me a free sample, I wanted to support a fellow veteran and business owner. I was affected by the reciprocation tendency, the Kantian Fairness Tendency, the liking/loving tendency, and the social-proof tendency. I wanted this fellow veteran to like me and think that I was being fair to my fellow veterans and business owners because if I was in the same position, I would like the support. I ended up buying like $20 worth of candy that I brought back to my sister that I didn’t even try. It made my sister happy that I did it so there is another bias.
Even though I fell for all of these biases, it doesn’t mean it’s a bad thing either. It is a good thing to make other people and $20 is not a lot of money to spend and I can make that back in the future. You can go through these cognitive biases and it’s okay. I’m not saying it’s a bad thing to spend $20. It’s actually okay and made the world a little bit better by spreading some cheer. Just make sure you’re doing it because you want to do it and doing for some faulty reason.
If the guy gave me a free sample and then convince me to buy a thousand pounds of chocolate, it would probably make him very happy but make me upset that I spent thousands of dollars on chocolate because I let cognitive biases cloud my judgment. This scenario would have turned out bad for me but $20 is fine.
These cognitive biases are also to have in life because it would be too mentally exhausting to think about every little thing. I know that every Marine is a good person, but for the most part, they are great people to be around. I just have to be okay with getting let down the five to ten percent. It’s going to happen and that’s how we build a society on trust. If we questioned everything, then society would come to a halt. Nothing would get down.
There are times with these cognitive biases can fool you into doing something that you shouldn’t be doing. If you have the overoptimism tendency when it comes to playing the lotto, where you think you have a great chance at winning than you actually do, then this can hurt your pocketbook.
In the case of me buying the candy, I don’t think I was fooled as a person, and if I was it’s fine but the costs are so low. You have to accept some losses at life and at least I was able to give the chocolate to my sister and make her happy.
You want to be aware of these cognitive biases when the costs are high. If you get a free cup of coffee from a car salesman and you feel obligated to buy the bigger package car than you can afford, then that is an issue. You can be fooled that you like the car and it just ends up harming you down the road. Being fooled can happen with purchases, the people that you hang around, and the activities that you do. You participate in them or make bad decisions because you’re fooled into the wrong things. I continue to get fooled to this day but the thing is I like to reflect on what I’m doing and ask myself, is this what I really want to do.
When it comes to doing something for ten years, that is a high cost and you don’t want to fool yourself for that long either. Time is short and you want to make sure you’re making wise decisions that affect you long term. This might mean leaving a job since you’re no longer following the availability-misweighting tendency and know there are other jobs out there for you.
If you followed all these cognitive biases then you would just be a robot and would not really have any fun, so disregard them when needed but have the wisdom to know when to use them. Do this and you should have a good life.
That’s it for today’s episode, and to summarize it, the person you don’t want to fool is yourself, and you’re the easiest person to fool. So make sure you take a look at the show notes at growwithjoe.me/episode185 to get a link to the 25 cognitive biases or you can check out Poor Charlie’s Almanac, which will give you even more tips on how not to fool yourself. But like I said, it can be very taxing if you always avoided these cognitive biases, so it’s okay to allow them to creep in when the stakes are lower but once the stakes start to get higher, then you want to take a timeout and see if you’re fooling yourself into a huge mistake. Life is about minimizing your huge mistakes, and if you can do this then you’re going to live a good life.
So in your journal, ask yourself, what are some cognitive biases that you’re dealing with? Are they positive? Or are the negative for you? Then ask yourself how can you address them or you can use them to make your life better. For a lot of these biases, they just require a cool-off period, so don’t be pushed into making a quick decision when the stakes are high. Just write a paragraph or two, on what you learned and how you can use the information to improve your life.
Thanks for listening today! To get a free copy of my book “More You Know, More You Grow: How to get better every day” just go to my website growwithjoe.me/book and just pay for shipping and handling.
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Thanks for joining me today and remember if you go with Joe, you can grow with Joe, cause Joe knows Dough.
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https://www.allencheng.com/25-cognitive-biases-charlie-munger/#Bias_7_Kantian_Fairness_Tendencyhttps://www.amazon.com/Poor-Charlies-Almanack-Charles-Expanded/dp/1578645018/ref=sr_1_2?crid=3ADVRSNSECPRK&keywords=poor+charlies+almanack&qid=1573593750&sprefix=poor+charlies+%2Caps%2C233&sr=8-2
