Making decisions can be extremely emotional, especially when there is money involved in that decision. It’s very easy to convince yourself one way or another when you’re emotionally swayed in a certain direction. This can be really detrimental and cost you lots of difficult lessons and money in the long run. Making decisions based on purely emotion and not fact is not a sound approach to becoming financially free. I, as an emotional person, have had to learn this lesson the hard way time after time. Decision making is a difficult thing when you’re exploding with enthusiasm. The difficult but necessary thing to do is to look at any situation through the lens of facts rather than emotions even if our heart doesn’t want us to.
Transitioning from why we should do it to why we shouldn’t
In my real estate career so far I’ve made a lot of decisions based on excitement and enthusiasm. While these emotions are great, they can lead to a slippery slope if deployed recklessly. My problem is the complete opposite of those who are too fearful to take action, both of which extremes can have negative consequences. The best place to live in this realm is somewhere in the middle. When I got real estate deals that came across my desk up until recently, I would always search for the reasons why they were good to pursue and put the bad on the backburner for the sake of trying to get any deal done. I know now that this approach was extremely reckless. The better approach is to extract the pros and cons objectively and see which side outweighs the other in a way in which you feel comfortable. Play devil’s advocate with yourself and play out the worst case scenario. Is that a situation you could live with if that happened? How would you remedy it? Are you confident you are capable of taking on this challenge? If the answers to any of these questions are unclear, that is reason enough to decide that proceeding is probably not the prudent decision. In my experience, I’ve learned that it’s preferential to say no to many more things than you say yes to. 99% of the deals I look at are put aside. If they don’t have multiple exit strategies I won’t do them. This approach can be taken and applied to anything involving finances and financial freedom. The more picky you are and the more you analyze every decision deeply, the better success you’ll have. Again, this doesn’t mean to enter analysis paralysis and never move on anything out of fear. It means to be aware of both sides of the coin and not let your emotions sway you one way or another.
Dealing with emotions and decision making
Emotions are a very tough thing to control. Most people (and by most I mean 95% of people) make the majority of their decisions based simply off emotion. Emotions are so powerful that they can overtake your ability to use logic and reason to come to a savvy conclusion. It’s going to take time, discipline, and hard work to learn how to control your emotions. You’ll need to really pay attention to how you react to things off the bat and how they make you feel. Being conscious of the emotions you feel is step one to controlling them. Most of the time, people don’t recognize the emotion they feel before acting on it. This is a basis for serious problems and issues to arise. Just like giving into the emotion of anger might cause you to say or do something in a spat with a significant other that logic would advise you against doing, the emotion of strong excitement might do the same when entertaining a financial decision. Once an emotion to a situation is recognized by you, you must learn how to break that emotion away from the situation as best you can. This will help you analyze the raw facts of what it really is you’re looking at and how to move forward. Most of the time, your emotions will deceive you. For me, that has been a big issue. I’ve pushed deals along that really should’ve been killed immediately based on facts because I wanted to get a contract signed so I can feel good. My emotions influenced these decisions greatly and I can say with absolute certainty that this has cost me money and massive amounts of time. Although the lessons I’ve learned from these experiences have been invaluable, my goal here is to help others not make these same mistakes. Learn to control your emotions early on and it will serve you well on your quest for financial freedom.