In this episode, we discuss how to make better decisions, and why you should avoid bad decisions at all costs.
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 how to make a better decision. The thing with decisions is that we are usually uncertain about our decisions. We feel like oh we should do this thing and then ten minutes later, we’re like, never mind. One of the cogitative biases that get people is loss aversion. People hate losing twice as much as we like winning. If I found a 20 dollar bill on the sidewalk, and then 30 minutes I lost that 20 dollar bill, I would feel more pain than finding that 20 dollar bill. And it the grand scheme of things, that money was house money anyways because I just found it.
This is an important concept to know because in life, you will have some losses and you just have to make sure that they are controlled losses. I heard a great metric on a podcast where if your income is under $10,000/yr you can only really afford to lose up to a hundred dollars. So your decision should go beyond that until you build up your income up to that point. Then once you’re in the 10,000 to 100,000 range, then you can afford a thousand dollar decisions. This is a sliding scale and not a perfect solution but is a good reference point. If you make $50,000 for the year, then you can afford $4000-$5000 for the year on a new business adventure. Then once your income is over $100,000, then you can provide tens of thousands in business decisions.
Right now, I only spend in the low thousands but this is what I can afford. Instead of spending thousands of dollars on coaching, I just buy the course for $50 or $200. I learn a lot from the courses and then I implement what I learned so that I can leverage that money into more opportunities. If I take a course and it doesn’t work out for me, then I didn’t lose that much money. I can make it back. There are going to be some courses that won’t be good or books that I read that won’t be good, but I just have to accept that. I’m not going to swing a hundred percent, I’m going to swing 30% and this should be good enough. So if you use this metric when it comes to your decision making progress, that you won’t be taking on too much risk. If you’re going to get into a network marketing business and you make nothing right now, then don’t take on thousands of dollars in business debt. Work for someone else for free if you have to so you can learn the ropes and then once you feel like you’re ready, start slow. Going all in hardly works out.
Also when you’re making a decision, don’t use the number 7. Seven is a cop-out. It’s a safe number that will tell you it’s okay to be inactive because you’re not sure of something. So if something is 6 or below, then you don’t do it. If it’s 8 or higher then this is something that you should do. When you use this method, which I got from Kyle Maynard who is the first quadruple amputee to ascend Mount Kilimanjaro, it allows you to focus on the things you really care about and avoid the things that you don’t care about. How many times have we been suckered into doing something because we were on the fence and the other person was able to convince us? It probably happened too many times. When you do the quick calculation in your head, then if it’s an 8 or higher, then you know you should be doing it.
We should avoid as much as possible the things that we don’t want to do in life. I thought I was going to be able to help out my cousin with his e-commerce business but I realized that it would take more time than I thought and I couldn’t focus on my Grow With Joe Business and his business at the same time. Since I enjoy my Grow With Joe Business way more, I told my cousin that I couldn’t help out anymore. It was a ten for my business for a 4 for helping him out. So I was able to move away from that business and just focus on my business. It was only for a couple of months and so I didn’t waste too much business. I guess I started out as a ten with helping him out but then it slipped past a seven. And this will happen when you make a decision. The key thing is you got to ask yourself, are you willing to get back to an 8 or higher, or is it better to move on to something else. I know for me, it was better to move on and just focus on what matters to me. There are no hard feelings between me and my cousin because we knew it was for the best.
When you make a good decision and don’t hold on to the bad ones, then you’re going to feel a lot more freedom and that is a feeling that we should strive for.
That’s it for today’s episode, to summarize it, we need to know how to make the right decisions. The way we do that is that we don’t get too afraid of losses but we need to make sure those losses won’t crush us. So use the method I used in this podcast about how much losses you can handle. This is just a rule of thumb and you need to be okay with any risk that you take and the losses that you may face. But when you accept that risk, there is also a reward that you can have as well. The other way to make a good decision is not to use the number seven when you rate something on a scale of 1-10. This is about removing uncertainty from your life and to know when to move on from a decision. Life is about making the best decisions and minimizing bad decisions. Do this and you will have a good life.
So in your journal, ask yourself, what is a decision that you need to make? How would you rate that decision on a scale of 1-10? Should you continue with the decision or say no to it? Is the risk too big to handle? Take some time to answer these questions and you should be in a better spot. Sometime you might make a bad decision but that’s okay, you can rebound and then make the right one.
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.
I have a quiz on my website that grades your inner circle, so if you want to find out if your inner circle is an A, B, C, D, or F, you can take that quiz at growwithjoe.me/quiz
I’m also trying to do a feedback Friday episode, so if you have a question that you would like to have my answer on the air, just e-mail me at [email protected]
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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.
*Music outro
