START A PETITION 25,136,189 members: the world's largest community for good
START A PETITION
x

5 Tips to Avoid Bad Decisions

5 Tips to Avoid Bad Decisions

The holocaust never happened. The moon landing was staged. How do I know this? I did a Google search. No matter what your position, you can find support. The lesson? Be careful what you ask, or maybe more appropriately, be careful how you ask. In psychology, the term for this is confirmation bias and it can have damaging consequences for your finances and your life if you’re not careful.

Nobody likes to be wrong, so we’ll actively try to find support for our existing beliefs. We’ll scour the web to try to find anybody saying anything that remotely resembles our own beliefs.

The problem with confirmation bias is that you selectively filter what information you choose to pay attention to and value. So not only will you actively look for evidence and seek experts that confirm your existing beliefs, but even more pernicious, you’ll hide from or discredit any information that contradicts your viewpoint. This can cause you to dump money into a failing business, time into a bad relationship, or even to stay in a stock too long.

For example, let’s say after watching the stock market go up and up and up over the past year, you decided to jump back in a month ago (woops). Now you’re fully invested and you’ve just seen the market drop 10%. If you’re suffering from confirmation bias, instead of rationally evaluating the long-term economic and financial outlook of the U.S. and global economy, you may selectively read just those blogs or columns that are bullish. If you come across an article that is bearish, you’ll dismiss it, or maybe not even read it.

Confirmation bias isn’t just a problem for investors. It’s a problem you need to be aware of when looking for a spouse, starting a business, interviewing for a new job, managing people, and any other situation where a supply of fresh information can help you make better decisions.

Confirmation bias is very difficult to recognize, but here are five tips you can use to help minimize this cognitive distortion:

1.  Remove your ego. At its root, confirmation bias is an ego disease. We hate to be wrong and we’re desperate for others to validate our position. Seek the truth over being right, because if you disregard the truth long enough, you’ll eventually be proven wrong anyway.

2.  Seek disagreement. Foster an environment where it is not only okay to disagree but encouraged. Asking friends, family, and employees “Am I right?” will likely get only those who agree with you to speak up. A better question is, “Why am I wrong?” At meetings, require everyone to play devil’s advocate. Early on it might be difficult to get this kind of feedback from others because they’re probably not used to thinking about why you’re wrong (well, at least verbalizing it), so turn it into a game and reward the best answers.

3.  Ask better questions. One of the most worthless questions to ask a friend or co-worker is “How do you think I did?” It’s worthless because you’ll never get any constructive feedback. A much better question is “What could I have done differently to make it better?” By changing the question ever so slightly, you’ll be shocked at the honest advice you’ll hear.

4.  Keep information channels open. Constantly seek alternative views and opinions in print, on TV, and in person. That might mean visiting websites, reading newspapers, and watching shows that you’ve previously avoided. Remember, seek the truth, not evidence that you’re right.

5.  Google better. Don’t search what you want to prove, because with over 3 billion web pages, you’re bound to find one that agrees with you. Instead, use open-ended searches that aren’t biased.

Keep these five tips in mind and you’ll avoid confirmation bias.

(Three wise monkeys image by Moyan_BrennCC 2.0)

Are you ready to create more money, time, energy, and passion in your life? Learn how to live your best life now with these free resources:

Get the “Achieving Peak Performance” ebook and video now!
(free for a limited time)

You can also join a community of passionate people at Richer Life who want to achieve more in life and at work. With your free membership, you can participate in conversations I have with experts, celebrities, authors, and thought leaders that are laser-focused on practical ways to drive more money, motivation, and meaning into your life. Take the first step toward creating a better life by joining Richer Life for free now!

Read more: Career, Community, Guidance, Inspiration, Life, Self-Help

have you shared this story yet?

go ahead, give it a little love

Robert Pagliarini

Robert Pagliarini is obsessed with improvement, making the most of his time and energy, and inspiring others to live life to the fullest by radically changing the way they invest their time and energy. He is the founder of RicherLife.com, a community of passionate people who want to learn and achieve more in life and at work and the co-founder of The Band of Brothers Foundation, a non-profit helping kids around the world.

48 comments

+ add your own
4:26AM PDT on Apr 20, 2013

Keep to be open

1:40AM PDT on Apr 20, 2013

thanks for the tips

6:19AM PST on Feb 13, 2012

great, thanks

6:14PM PST on Feb 9, 2012

Seems like sound advise.

10:35AM PST on Feb 4, 2012

thanks

12:01AM PST on Jan 30, 2012

Thank you for very informative and useful post.Cheers.

11:56AM PST on Jan 24, 2012

911 was an inside job.

5:41AM PST on Jan 24, 2012

Thanks

4:10AM PST on Jan 24, 2012

Great article!!!! Powerful and Enlightening. I will keep this one on file for sure. Thanks.

5:31PM PST on Jan 23, 2012

Copied down the list and am going to share it with the students who think finding something online proves its true!

add your comment



Disclaimer: The views expressed above are solely those of the author and may not reflect those of
Care2, Inc., its employees or advertisers.

people are talking

I do not add salt to anything yet I am probably getting more than I need from the foods I eat. Thank…

Thank you for the article...

No real news here, but good to be reminded about hydration. I find activity breaks during long tasks…

Story idea? Want to blog? Contact the editors!



Select names from your address book   |   Help
   

We hate spam. We do not sell or share the email addresses you provide.