In this episode, we discuss how we need to know how the brain thinks about solving problems and how we can use this information to help us take advantage of life and not be the sucker in life.
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.
In today’s episode, we are going to talk about slow and fast thinking. There is a really good book on behavior economics called, “Thinking, Slow and Fast” by Daniel Kahneman. This guy with his partner Amos Tversky were the pioneers on behavioral economics. In traditional economics, you assume that everyone in a market transaction is a rational individual that is doing something to maximize their own benefit. But what Daniel Kahneman discovered that there are a bunch of rules of thumb that people use to make decisions, and these rules of thumbs can cause people to make bad decisions.
For example, “If a bat and a ball cost $1.10 and the bat is a dollar more than the ball. How much is the ball?” I’ll give you five seconds to answer. Now the answer is that the ball is 5 cents and most people will say ten cents, but this isn’t correct because if the ball is ten cents, and the bat is a dollar more than the ball, this would make the bat a $1.10 and then would make the total is $1.20 instead of $1.10.
The brain is always looking for shortcuts because it wants to converse energy. Your brain consumes 20% of the calories that you consume and thousands of years ago, food was not as plentiful as it is today. So your amygdala is responsible for your quick thinking. It’s the size of a walnut but is responsible for 95% of your decision in a day. So when you hear a question similar to the bat and the ball, your amygdala will treat this question like what is two plus two instead of what is 8000 divided by 45.
Now I don’t know the answer to this question but it would require me to slow down and do some math. This is what your prefrontal cortex is responsible for, the slow thinking. It requires more energy and more time for it to work.
I love to understand how my mind works because it’s going to allow me to make better decisions for myself. If someone presents information int he right way to me, then I can be fooled into making a poor decision because my amygdala is thinking I’m taking a shortcut that is good for me but it really I should have used my slow thinking. And this is the biggest thing about understanding the difference between slow and fast thinking, so you can take advantage of more situations and be less of the sucker.
Now you don’t want to have all your decisions to be slow thinking because not everything requires slow thinking. When it comes relaxing, you don’t want to spend an hour choosing between a movie, it’s best to choose a movie within five minutes so you can start relaxing and you just go off some basic assumptions that you like. For example, you want to watch a comedy to whine down. The cost of making a poor decision in this is just 15 minutes of your time if you don’t end up liking the movie.
When it comes to making a huge purchase or choosing a career, you want to take time to slow down because the opportunity costs for being wrong are huge. Even though I know about slow and fast thinking, I still make wrong decisions but I feel with meditation and journaling, I’m able to move on with my mistakes and make better decisions in the future.
When it comes to slow thinking, it can also be uncomfortable. For the past couple of months, I was learning how to create web pages and this is something that I’m not familiar with and I ended up being frustrated a lot because things were not working like I wanted to. So when this happens, the best thing for me to reach out to an expert and work on something.
This required a lot of slow thinking and now I feel like an expert and I have another skill to help me out. What helped me continue through the frustration was my understanding of slow and fast thinking. My fast thinking is trying to tell me that this is painful and I should do something easier, but I know with my slow thinking that these tasks will be more valuable to me once I master it. To understand your slow and fast thinking, and this should help you get more control over your life.
And that’s it for today’s episode, to summarize it, understand slow and fast thinking. A great book to check out to help you with this concept is Daniel Kahneman’s book called “Thinking, Slow and Fast.” One thing I miss about DC is all the book signings I used to go to. I had the opportunity to see Daniel Kahneman speak about his book and he signed a copy for me. And I love to learn about these concepts about the human mind because it helps me in my journey as a business owner and as a human being.
I don’t think I would start my own business and become a digital nomad if I didn’t understand how my mind could be sabotaging me and your amygdala can be sabotaging you if you’re not aware of it. You could also be spending too much time thinking about stuff and you should just let your emotions take over. This is a balance and once you master the balance, I feel like your life is going to be a lot better.
If you would like to get the journal questions for today’s episode, you can sign-up for my monthly journaling subscription newsletter, where you get daily journal questions Monday through Friday, and as a bonus, you will also get my time management course and my personal development cheat sheet. You can get all this for $13/mo, which is less than the cost of an audible subscription and it’s less work to gain more wisdom. You can get this offer at growwithjoe.me/journal
Thanks for listening today! To get a free copy of my Audiobook “More You Know, More You Grow: How to get better every day” just go to my website growwithjoe.me/book and you can download it right there.
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