Before you complete your day, you will make 10,000 decisions. That number comes to us from Noreena Hertz, an economist and author of Eyes Wide Open: How to Make Smart Decisions in a Confusing World. Ms. Hertz explains that the choices we make in our daily lives range in importance from what to eat (227 decisions about food alone), to potentially life altering decisions.
It’s no secret that tough choices are part of life, and the quality of your decisions dictates your course. Unfortunately, however, biases and distractions can easily cloud decision-making, causing you to make choices that may not be in your best overall interest.
In order to ensure that your financial decisions best reflect your values, you must institute a decision-making framework. Here are nine easy steps that will help you make the most informed and objective decisions:
1. Define the decisions, when it needs to be made, and whom it affects
2. Identify the biases that may impact your decision-making
3. Quantify the costs, both real and intangible, of your decision
4. Quantify the benefits, both real and intangible, of your decision
5. Determine whether you have the assets and the current resources to make the decision
6. Make appropriate adjustments to your decision or determine the tradeoffs you’d need to make in order to move forward
7. Determine whether or not it’s prudent to go ahead
8. Create bullet-point list of steps to take
9. Confirm that you’ve made an informed and objective decision
Keep this checklist handy as you face the 10,000 decisions awaiting you today. It can help you make decisions serve as an extension of your personal values.
United Capital Financial Advisers, LLC (“United Capital”), is an affiliate of Goldman Sachs & Co. LLC and subsidiaries of the Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management and financial services organization. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.
The information contained in this blog is intended for information only, is not a recommendation, and should not be considered investment advice. Please contact your financial adviser with questions about your specific needs and circumstances. This blog is a sponsored blog created or supported by United Capital and its employees, organization or group of organizations. This blog does not accept any form of advertising, sponsorship, or paid insertions. Certain authors of our blog posts may be influenced by their background, occupation, religion, political affiliation or experience. It is important to note that the views and opinions expressed on this blog are that of the owner, and not necessarily United Capital Financial Advisers. As a Registered Investment Adviser, United Capital does not allow any testimonials on their blog, and any comments deemed as such United Capital will remove.
United Capital does not offer tax, legal, or accounting advice; therefore all articles should not be taken as such. Readers should obtain their own independent legal, tax or accounting advice based on their particular circumstances. All referenced entities in this site are separate and unrelated to United Capital. Any references to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring by United Capital.