Do you hate making a decision? Today we will master the decision making process with Matt Bodnar.
We make dozens of decisions every day. Some of them are minor like what to wear to work, and some are major like deciding between buying a rental property or a house to live in. When you learn to master the decision-making process you can improve every aspect of your life, your job, your health, your relationships and not least of all, your finances.
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A Fellow Podcaster
Matt Bodnar, named to Forbes “30 Under 30 List,” has been called a “Rising Restaurateur Star” by the National Restaurant Association and a “Strategy Pro” by Restaurant Hospitality Magazine. He is a partner at early stage investment firm Fresh Hospitality where he focuses on deal-making and strategy.
Matt is also the creator and host of “The Science of Success” a #1 New & Noteworthy podcast, with almost one million downloads. The podcast is focused on improving decision-making, understanding psychology, and sharing insights from experts.
Matt previously worked as an import/export consultant in Nanjing, China and spent several years at Goldman Sachs before returning to his family roots in the hospitality space.
The Great Investors
Matt became very interested in what commonalities the world’s great investors like Warren Buffett and Charlie Munger had in common. Was it that they were smarter than everyone else? Was the ability to make money through investing some innate trait they were simply born with?
Through his research, Matt concluded the one thing not only all great investors but all successful people in any pursuit shared was the ability to make good decisions.
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We know how powerful compounding interest is when it comes to growing our money. We can use that same power when it comes to improving our decision-making abilities.
If we strive to make our decisions just 1% better each day, every part of our lives those decisions touch will improve.
How do you make that 1% improvement? By having as much information as you can, that will help make a decision. If you’re trying to decide between two job offers you want to know what the pay is, what the benefits, both financial (401k, insurance benefits) and non-monetary (vacation time, flex scheduling, telecommuting) are. What is the culture like at each company? What do you want out of a new job?
Really grill yourself when you have to make a decision so you can pull out the answers that will help you make the correct decision.
Have you ever gone clothes shopping knowing that you need new clothes but without much of an idea of what you want to buy? You spend forever looking and may come away with nothing. That can happen when we don’t have a plan and are faced with too many choices.
Analysis paralysis can be, well, paralyzing. We have so many choices and so much information at our fingertips. When you are trying to pick a stock there is more information available than you could possibly read and much of it, maybe you won’t even understand. But you still have to choose.
So you go back to asking yourself questions. Does this company make a product I believe in? Does this company act in ways that align with my ethics? By asking these kinds of questions, you can start to narrow your list of choices down until the right choice becomes obvious.
No Decision is Still a Decision
Of course, not making a decision is a decision in itself and can have worse consequences than making the wrong decision. It’s scary though because making a decision means lots of other possibilities are cut off.
But having made a decision always feels better than having to decide. You’ll feel calmer even if you aren’t 100% sure that you’ve made the correct decision. And if you have made the wrong choice, you can learn from it and use the lesson to make better decisions going forward, something you miss out on when you are too afraid to decide.
Okay, you’re ready. You want to master the decision-making process. How can you do that? Is it like a muscle that you can grow through regularly using it?
Start a decision journal. You don’t need to document the little things like what you decided to have for dinner (unless poor food choices are something you are trying to overcome), but you should aim to fully document one decision a month, a fairly impactful one like whether to pay off debt or invest with that money.
When you journal your decision-making process, you have the benefit of hindsight. You can read back through it and see a pattern emerge. Maybe you think only in the short-term, or maybe your decisions are too fear based. When you see that pattern, you can take steps to correct it.
There are two types of mindsets when it comes to making decisions; the limiting mindset and the growth mindset.
The limiting mindset is a belief you have that gets in the way of achieving what you are truly capable of. You think something is always true. You can never save money. You will never be happy with your job. Thoughts like these are very destructive and can cause you to sabotage yourself over and over.
You might not even be aware of having this kind of mindset, it’s part of your subconscious and is rooted in fear.
You can break out of that by developing a growth mindset. People with a growth mindset believe that they can improve their abilities (like decision making) through dedication and hard work. That comes back to asking questions. What is that fear? How can I learn from my past mistakes? What are the most obvious bad decisions I have made in the past and can make now or in the future? Let me not make those.
Nothing is set in stone. Focus on learning and growing. You can revamp the way your brain thinks. Neuroplasticity describes how things we experience create new neural pathways in our brains. When we learn new things there are functional changes in our brains; new pathways are formed.
An interesting explanation of this is how people typically react in a plane crash. Some people will try to gather their belongings before escaping a burning plane. Why? It seems crazy. But there is a path in our brain that was forged the first time we exited a plane and reinforced every subsequent time we did it.
You stand up, gather your things and walk off the plane. The brain doesn’t have a pathway to tell us what to do when the plane has crashed, so we do what we have always done. But just by thinking of what you should do in the event of a plane crash, leave your things and get out as quickly as possible, a new pathway has been formed, and we will know what to do in the event of a plane crash even though we have never actually done it.
Gathering your things from a burning plane before exiting is the limiting mindset. Just getting the hell off the plane is the growth mindset. You can revamp your brain.
Making decisions is uncomfortable, and some of us put if off for as long as possible. But discomfort is part of life and avoiding it makes it harder to take. Make it a habit of embracing discomfort. Do one scary thing every day, something that might end up in rejection.
Ask for a discount when you buy your coffee. Ask someone “out of your league” out for a drink. Ask 300 strangers to take a selfie with you in a month (don’t do this in NYC, you’ll get maced).
Getting used to being uncomfortable on an innocuous day to day situation can help you get more comfortable making important decisions.
Always a Silver Lining
Not every decision we make will be a good one or the right one. But each one can be a learning opportunity, so the next decision and the next and the next are better than the last.
Riverhorse Tripel Horse: A Belgian style ale brewed with spices.
The Science of Success: Get the guide to making better decisions.
The Science of Success Podcast: Unleash your human potential.
Mindset: The book that changed Matt’s life by Carol Dweck.
Seeking Wisdom: Peter Bevelin
Poor Charlie’s Almanack: Peter D. Kaufman and Ed Wexler
Predictably Irrational: Dan Ariely
Influence: Robert Cialdini
Thinking Fast and Slow: Daniel Kahneman