LongHaul Posted August 19, 2014 Posted August 19, 2014 Thanks all for the replies, these are all good points. Actually, with the money thing it doesn't affect me as much as it might have seemed like considering I listed it in my post. I am not afraid to spend when it adds value, though I try to be wise about it. But when it comes to unwise purchases, that's when it really bothers me because of with Future value/present value concept. Perhaps I am just unforgiving of myself when it comes to mistakes. The bigger problem for me, though, is my 2nd listed point - and that is "always thinking of the downside and letting the upside take care of itself." With stocks, I am constantly playing devil's advocate against my own investments and it's proven to be a great security (no pun intended) measure. But this can be depressing in life when making semi-major or major decisions. Although I've had a natural inclination towards frugality, this obsessing over the downside is something I trained myself to do in order to become a better investor. But then I keep doing it for non-investing related decisions. Of course, you shouldn't be a blind optimist either, but you need more of a balance between optimism and pessimism in life, more so than in investing. Does this happen to anybody else? As I have gotten older and with young kids I have become more careful and consider the downside of my actions - especially as to physical safety. I heard the CEO of a major energy company always holds the railing of the stairs. At first I thought this was too much and laughed. But it is really a free backup system on safety where he also sets the tone. Basically I think it is good to have a margin of safety or backup system for your life. With spending money I am frugal and my wife says it is too much so I have been trying to balance it all out. I think the balance comment was right on. I think one reason people buy so much is that they have a hole in them and a desire for something. They buy the product and then the desire is gone and they feel happy - for a little bit. Then they have new desires and are unhappy again. So the true source of happiness is not getting more stuff to fulfill unlimited desires - because you will always want more which will make you miserable - but to be content with what you already have. Most religions and philosophies mention this and I think it is right on. Louis CK funny as hell on this. Everything's+Amazing+ +Nobody's+Happy I am not sure of what you mean by always looking at the downside. For safety that is great. For small purchases just look at it in its entirety and make you best call. Feel free to elaborate.
Mephistopheles Posted August 19, 2014 Author Posted August 19, 2014 I am not sure of what you mean by always looking at the downside. For safety that is great. For small purchases just look at it in its entirety and make you best call. Feel free to elaborate. So I generally meant for major life decisions - choosing a new job, new career, whether or not to go to grad school, or even in choosing whether to date someone or not. My first instinct is to think of it like an investment - to focus on the downside. Clearly this is the wrong way to go about such things.
oddballstocks Posted August 19, 2014 Posted August 19, 2014 Thanks all for the replies, these are all good points. Actually, with the money thing it doesn't affect me as much as it might have seemed like considering I listed it in my post. I am not afraid to spend when it adds value, though I try to be wise about it. But when it comes to unwise purchases, that's when it really bothers me because of with Future value/present value concept. Perhaps I am just unforgiving of myself when it comes to mistakes. The bigger problem for me, though, is my 2nd listed point - and that is "always thinking of the downside and letting the upside take care of itself." With stocks, I am constantly playing devil's advocate against my own investments and it's proven to be a great security (no pun intended) measure. But this can be depressing in life when making semi-major or major decisions. Although I've had a natural inclination towards frugality, this obsessing over the downside is something I trained myself to do in order to become a better investor. But then I keep doing it for non-investing related decisions. Of course, you shouldn't be a blind optimist either, but you need more of a balance between optimism and pessimism in life, more so than in investing. Does this happen to anybody else? As I have gotten older and with young kids I have become more careful and consider the downside of my actions - especially as to physical safety. I heard the CEO of a major energy company always holds the railing of the stairs. At first I thought this was too much and laughed. But it is really a free backup system on safety where he also sets the tone. Basically I think it is good to have a margin of safety or backup system for your life. With spending money I am frugal and my wife says it is too much so I have been trying to balance it all out. I think the balance comment was right on. I think one reason people buy so much is that they have a hole in them and a desire for something. They buy the product and then the desire is gone and they feel happy - for a little bit. Then they have new desires and are unhappy again. So the true source of happiness is not getting more stuff to fulfill unlimited desires - because you will always want more which will make you miserable - but to be content with what you already have. Most religions and philosophies mention this and I think it is right on. Louis CK funny as hell on this. Everything's+Amazing+ +Nobody's+Happy I am not sure of what you mean by always looking at the downside. For safety that is great. For small purchases just look at it in its entirety and make you best call. Feel free to elaborate. Do you avoid traveling by car? I ask because that's the riskiest thing you could do maybe unless you're driving an humvee or something similar. Yes, there is a risk of falling down the stairs, but what's the worst case? I guess you could hit your head wrong and die. The same is true of anything, you could be standing outside and get caught off balance in a strong gust of wind, fall over and hit your head and die. So do you not stand outside anymore? The people I know with this attitude live terrible lives, they're afraid of literally everything. They are a prisoner to their own fears, anywhere they go and everything they do something could go wrong. Even if I expire early I'd rather not live like this. I'd rather live a great life that's short verses a terrifyingly long life that I don't enjoy. But to each his own.
yadayada Posted August 19, 2014 Posted August 19, 2014 the danger of doing something analytical for a living is that you basicly slowly turn off the animal side of your brain. If you are that risk averse I would suggest hitting the gym and lifting some weights to get your testosterone levels up. If you don't do that you risk turning into this boring geek that is just not fun to be around and is not living life to the fullest. Don't fall into this mindset of overanalyzing every little thing. Leave that for big decisions and technical decisions in your career. For example in a social interaction you can choose to analyse everything you say and weigh the options. Or you can just say whatever comes to your mind. Study has shown that if the analytical part of your brain is working, your ability to empathise is repressed. So actually being more impulsive works better because of increased empathy. I find heavy work outs (to get overall energy level and t levels up) and meditating every once in a while, and focussing on just turning off my brain helps a lot here.
LongHaul Posted August 19, 2014 Posted August 19, 2014 I am not sure of what you mean by always looking at the downside. For safety that is great. For small purchases just look at it in its entirety and make you best call. Feel free to elaborate. So I generally meant for major life decisions - choosing a new job, new career, whether or not to go to grad school, or even in choosing whether to date someone or not. My first instinct is to think of it like an investment - to focus on the downside. Clearly this is the wrong way to go about such things. I think it is prudent to carefully look at the downside of major life decisions. I think it is smart. However, I like what Ben Franklin did - see below - as I think it is the most rational as it tries to encompass all the facts upside and downside. I also agree with the statement that just being a cynic is lazy. “My way is to divide half a sheet of paper by a line into two columns; writing over the one Pro and over the other Con. Then during three or four days’ consideration, I put down under the different heads short hints of the different motives, that at different time occur to me, for or against the measure. When I have thus got them altogether in one view, I endeavor to estimate their respective weights; and where I find two, one on each side, that seem equal, I strike them both out. If I judge some two reasons con equal to some three reasons pro, I strike out five; and thus proceeding, I find where the balance lies; and if after a day or two of further consideration, nothing new that is of importance occurs on either side, I come to a determination accordingly.” –Benjamin Franklin http://www.artofmanliness.com/2009/08/17/how-to-make-a-decision-like-ben-franklin/ I think what risk someone is willing to take is a personal life decision. If I can avoid dying or getting injured with minimal cost then I think that is the most rational. Everyone has to accept some level of risk - ie driving. But remember you may take a risk and have a little fun but if it costs you your life and decades of fun and life experiences is it really worth it.
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