Welcome back to life planning month here at Optimize Your Life!
But what happens when a small change isn’t the answer? What do we do when we need to consider a big change to our lives?
Maybe the best way to get more balance in your life is to get a new job. Maybe the best way to save more money is to move to a different state with a lower cost-of-living. Maybe you’re considering going back to school to increase your earning potential. Maybe you’re debating whether to expand your family and have a kid.
These aren’t small changes. They aren’t easily translated into daily habits.
They’re also scary.
When approaching big decisions like these, how do you analyze the risks? How do you weigh the pros and cons?
Today we dive into these questions.
Looking at Our Brains
For me, the first step in any decision-making process is knowing where your brain may be tricking you.
Our brains are pretty impressive little tools.
Look around you. Look at everything we’ve figured out how to create.
Think about your day. From waking up in a bed under a roof that protects you from the weather (maybe in an air-conditioned or heated room), to commuting to work in a car on planned and organized roads or a train with underground tracks, to swiping a piece of plastic to pay for food that you don’t grow.
Everything is amazing! We’ve achieved quite a bit as a society thanks to our brains.
Ancient Brains in the Modern World
The problem is that our brains developed over millions of years. Human civilization has only existed for about five thousand years. Much of modern life came about in the last few hundred years.
This isn’t enough time for our brains to catch up with our new realities.
This is why we have things like fear of public speaking.
Fear induces an adrenaline rush that pushes us into a fight or flight response in order to protect us from danger. Neither fighting nor fleeing were great options when I had to give presentations in front of my class in high school, but my brain still told my body that they would be.
Maybe in an ancient tribe screwing up my interactions with my classmates would have resulted in exile and increased likelihood of death. In my classroom though, it may have led to some teasing and probably would have been forgotten within a few days.
My brain just wasn’t adapted for the situation.
Status Quo Bias
One consequence of our poorly-adapted brains is the status quo bias.
Basically, we fear change and we overvalue the way things are now.
I’ve written about the studies behind the status quo bias before, but they span all areas of life.
We overvalue things that we own. We’re prefer investments that we already have, even if the choices were made by someone else. We’re more likely to vote for our incumbent congressperson even though we think Congress sucks.
Our brains are wired to think that change is bad. That change is more risky than it really is.
Which makes sense for an ancient human focused on survival. It doesn’t make sense for a modern human trying to optimize their life.
Lean Towards Change
Because of this, you should try to lean the other way.
Recognize that your brain will overvalue the status quo, and consciously put some more weight behind the change option.
Obviously don’t take this too far. If you’ve got a steady job that you like and a satisfying family life, maybe don’t up and move to Ukraine alone just because it is a change.
But if there’s a decision where you really aren’t sure which option is better, give the benefit of the doubt to the change.
There is a point that economist Tyler Cowen made on the Ezra Klein Show that has stuck with me when the two were discussing decision-making:
“If you are considering a change, you are past the point where you should have made it.”
When considering any change we need to remember that our brains are rigged against change. If we’re even thinking about it, then we’ve gotten past a high barrier and need to give that some serious consideration.
Looking for a more organized and systematic way to address your fears?
Nerd. But also, me too.
Ferriss’s approach consists of three main parts: think about the fear, think about the benefits of success, and think about the negatives of inaction.
EXPLORE YOUR FEAR
First, think through the worst possible outcomes. Essentially: What if your fears came true?
If you make this big change that you’re considering and everything goes horribly, what does that look like? List out the specific negative outcomes.
Next, take each negative outcome and think of ways that you could prevent it. Finally, if you can’t prevent it, list out some ways that you could repair the damage.
The question you’re basically looking at is: Even if your worst fears are true, would it really be as bad as it feels?
Maybe you’re afraid that if you move to a new state you won’t be able to find a job, which will lead you to run out of money. Steps towards preventing this from happening could include saving a larger emergency fund before moving, buying or renting a less expensive house, and starting to network and job hunt before the move.
If you do all of these things and still find yourself running low on money, then maybe you could work on some freelance or part time work while looking for a full time job. This wouldn’t pay as much, but could stretch your money out and help to temporarily repair the lack of income.
With all of these plans in place there is still certainly a risk. There is some reason to fear. But it isn’t nearly as bad as our gut reaction would lead us to believe.
Ferriss’s next phase is a single question: What might be the benefits of an attempt or partial success?
If everything goes perfectly with our plans we’ll achieve unthinkable success and never have to worry about anything ever again. But what about a lower standard? What if we only achieve partial success? Are there any benefits to making the change even if we fail?
By framing these first two phases as he does, Ferriss is setting a very conservative structure to his decision-making. He’s comparing the negatives of everything going completely wrong to the positives of some things going right.
Even with this conservative framework, Ferriss finds that we’re still over-weighting our fears.
THE COST OF INACTION
Finally, think about what doing nothing means.
What are the emotional, physical, financial, or other downsides of not making the change? What will that look like in six months? A year? Three years?
This is where we really account for the status quo bias. We always think about the negative consequences of making a big change. But what about the negative consequences of doing nothing?
If Tyler Cowen is right that “If you are considering a change, you are past the point where you should have made it,” then continued inaction will look even worse. You’ll continue moving further and further past that point and the negatives will continue to pile up.
Make those negatives real and noticeable. Think about your life at specific points in the future and how it would look without making the change you’re considering.
By taking these steps and applying logic to your fears, you can properly analyze the risks in big decisions and make the best choices for your life.
Join the Conversation!
Go ahead and make your pros and cons list, but keep your brain’s shortcomings in mind!
Make a plan so that you don’t let outdated impulses trick you into making a sub-optimal decision.
What do you think? Do you have a system for analyzing big decisions? Do you have experience with the status quo bias? Let us know in the comments!