126: Choices, Choices, Choices
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Coffee☕ or tea? Oat milk or almond milk🥛? Grande or venti? We’re diving into the world of the paradox of choices and how it affects our ability to make decisions.
Over the weekend, we were having a chat with a friend and we were talking about how some people can make decisions quickly and decisively, while others are paralyzed by the thought of choosing.
Do you remember The Matrix when Keanu Reeves had to decide between the red pill or the blue one? 💊 What if he chose the wrong one? Does this sound familiar?
When we have too many options and it makes it harder for us to make a decision, that’s what’s known as the paradox of choices.
We find ourselves thinking, “wow, there are so many options, what if I choose the wrong one?” This is a classic case of analysis paralysis.
The problem is when we are stuck in the analysis paralysis zone, we are unable to make and take decisive actions even though doing so is in our best interest.
One common thought and paradox of choice when it comes to investing is the fear of losing money. This is totally understandable. The thought of putting money into an investment and potentially losing it can be scary, and can stop someone from taking action. 💸
Another paradox of choice is the classic case of overthinking. Overthinking and second-guessing every decision can also lead to analysis paralysis. People may become too focused on finding the “perfect” investment or analyzing every detail, instead of making a decision. Have you ever heard the phrase progress over perfection?
Maybe you also struggle with the issue of not having enough information; that’s not a good feeling either. Not knowing enough about the market or investments can cause someone to feel overwhelmed and unsure about where to start.
Along the same lines is lack of trust in the market. If someone doesn’t trust the stock market or investment industry, they may understandably feel nervous about investing their money. Maybe this mistrust even comes from a palace of insecurity due to lack of knowledge – it’s all interrelated.
Finally, there’s the classic of avoiding decision-making. This can apply to a lot of areas of life, and some people may simply avoid making a decision altogether because they’re afraid of making the wrong choice. This might be tied into perfectionism, but it shows up in many places, and finances are no exception. 👇
A Framework for Decision-Making
We’re here to help, so we’re going to give you a toolbox to help you build a framework so you can make decisions like a boss! Are you ready? Let’s do this!
First up, is prioritizing a framework. This one’s pretty simple, just make a list of all your options and then rank them in order of importance. Boom💥! Decision-making just got a whole lot easier. For multifamily apartment investors, maybe you can dig a little deeper and ask the question: what’s your investment priority – cash flow, appreciation, or tax benefits?
What’s your investment horizon? No matter what your unique situation is, there’s always going to be a top priority, so it’s important to recognize what that is (and isn’t) before you dive in.
#2: Seek Advice
Next up, we have the seek-advice framework. Find someone you trust 🤝, and ask for their opinion. Please keep in mind that this should be someone qualified in the area – you wouldn’t ask your trusted mechanic for legal advice, and you wouldn’t ask your lawyer how to fix your car.
But the awesome thing is that this person might have a different perspective that will help you see things in a new light. Plus, it’s always good to have a friend in your corner. When it comes to investments, perhaps seek out a couple of referrals to vet out the general partner you will be working with.
#3: Make a Pros and Cons List
Third on the list is a pros and cons framework. We LOVE ❤️️ a good pros and cons list, and it can be so helpful for many, many different areas of life. Start by writing down all the pros and cons of each option and weigh them against each other. It’s like a superhero showdown, but with choices instead of superpowers.
#4: Use a Decision-Making Model
Fourth, we have the decision-making model framework. This one’s a little more structured, but it can be super helpful if you’re feeling overwhelmed. There’s a model called the Decision Matrix that you can use to make decisions based on specific criteria. It’s like having a superhero mentor to guide you. 🤩😎
#5: Trust your Gut
And, finally, we have the trust in your gut framework. Sometimes, you just have to go with your instincts and trust that you’ll make the right decision. Everybody talks about gut health these days, but we think one of the healthiest things you can do is trust your gut instinct; it’s saved us more than a few times. Think about it like having a superhero sidekick that always has your back.
Making decisions and living with the consequences is part of life. So, don’t stress about it too much. Trust that you have the tools to handle whatever outcome comes your way, trust your instincts, and set yourself up for success. For even more tools, consider joining the Kitti Freedom Club so that you too can become a financial freedom expert! 👋👋
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