A few weeks ago, I made the decision to buy a bike and ride to work off the back of a desire to change my lifestyle to include more physical activity. So off to the shop I went to purchase a bike.
Walking in I was greeted by a friendly sales assistant who asked me what I would be using the bike for, how often I would be using it and whether I'd ridden that type of bike before. He then recommended a bike which would be suitable for me.
This purchase has made me reflect on some of the discussions I've had with clients over the past few weeks. Should I buy a house or should I rent? Should I buy rooms to support my private practice? Should I establish a self-managed super fund?
The book 'Decisive' by Chip and Dan Heath walks through some of the common mistakes people make when making decisions. Chip and Dan suggest three decision pitfalls we encounter as well as suggesting some helpful ways to avoid these pitfalls:
When I decided I was going to buy a bike, the first thing I did was jump on my laptop and google 'entry level road bikes'. I 'knew' exactly the type of bike I wanted and after looking at a number of websites I finally found one telling me what I wanted to hear... a road bike was the best solution!
Upon reflection, I'd made all the classic mistakes. I hadn't considered the various options available to me (I wanted a road bike), I was blindsided by emotion (the Tour de France was on television!) and went looking for data to support the decision I had already made (confirmation bias).
During our lives we'll each make a number of decisions, varying in both importance and impact. Financial decisions can have a significant impact on our lives and so it's important that we identify all the options (however improbable) and carefully consider the pros and cons of each so an informed decision can be made.
Often the mark of a good adviser is the questions they ask to help clients make smart decisions. That is why here at Medical Financial Planning we make sure we take the time to understand our client's individual situation and options and then help them to move forward with clarity and direction.
|Tags: Financial planning Planning|
For Events and News