I have had many plans in my life; some were successful, and some failed.
More often than not, the failed plans could have been avoided.
I like to jump head first into things, which is not always wise. I am sure you have many plans for your money and career.
My question for you is: have you bounced any of your ideas off of anyone? Do you have any mentors or friends who are further along in their financial journey to provide you with perspective?
“Plans fail for lack of counsel, but with many advisers they succeed.”
We All Have Blind Spots
The issue with developing plans without any guidance is this: you will miss something in the process. Unfortunately, we are not experts in everything. I have made countless decisions in the past where I did not invite anyone into the decision-making process. Nor did I consult any books or other resources in my plans. I was convinced that I knew what was going on and I didn’t need any help. It was all in my head. Unfortunately, we all have blind spots, and without some assistance, we will miss things.
Harvard Business Review authors, John Dame and Jeff Gedmin, explain two blind spots that trip us up in decision-making and planning[i].
The first is confirmation bias:
Confirmation bias refers to our tendency, when receiving new information, to process it in a way that it fits our pre-existing narrative about a situation or problem. In other words, if you’re already think that New Yorkers are rude, you will find the examples on your trip to Manhattan to validate your thinking. Disconfirming evidence—the helpful taxi driver, the friendly waiter—gets pushed aside. They’re just “the exception.”
The second is hindsight bias:
Hindsight bias is the “I knew it all along” feeling. It is when you look at past events and you claim to know exactly why things played out the way it did. The problem is that we tend to have selective memories. We claim we knew that “it” (insert situation or problem) was going happen, but in reality, we had no idea. The issue here is that when we engage in this type of thinking, we do not stop to examine why something really happened. It gets in the way of learning from our experiences.[ii]
Many Means More Than One
So, when I eventually did start inviting others into my decision-making process, it was usually just one person (my go to person). Or I would consult that one resource (Wikipedia). The word “many” in the proverb means more than one. Consulting many people and many different resources makes a big difference. By having a collection of advisors, you can fight against confirmation and hindsight biases in your planning. They will force you to look at a potential plan from different angles to get a complete picture and help you examine your assumptions.
Look for People Who Are a Step Ahead of You
How do we get our own “advisory board?” Seek out friends and family in your network who are seeing results in the area you are trying to explore. If you don’t see evidence of success or effectiveness, don’t follow them. I applied this principle in my own life when I was about to get married. Before getting married to my wife, I sought out people who were married and had fulfilling marriages. I noticed during the engagement period; there was never a lack of advice that we received from others. The issue was where the advice was coming from. Some claimed to be experts but had broken marriages. I even got marriage advice from people who weren’t even married!
Build Your Knowledge Base
Depending on the significance of the project/goal you are trying to accomplish, just getting advice from friends and family will not be enough. Books and other resources created by industry leaders will serve as another counselor for you. While a friend or a family member can speak from experience, a book can speak from research gathered from multiple different sources.
It Takes a Village to Build Wealth
No person is an island. We need people. The combination of advisors with resources will give you the ability to make informed plans. The possibility of overlooking things in the process will reduce, and the opportunity to succeed will increase.
[i] Dame, John and Gedmin, Jeffery. (2013, October 2). “Three Tips for Overcoming Your Blind Spots”. Retrieved from https://hbr.org/2013/10/three-tips-for-overcoming-your-blind-spots
[ii] Roese, Neal J. (2012, September 6). “I knew it all along…didn’t I?”. Retrieved from https://www.psychologicalscience.org.
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