How to change your mind

Welcome to the Making Margin podcast! Greenway’s team is here to discuss common financial mistakes and to help you navigate them.

Meet the voices behind Making Margin:

Today we’re talking about changing your mind, which seems abstract, but actually has a lot of applications to finance.

As we start to get to know our clients, we like to find out about their background; then we talk through where they are now, then where they (think) they want to go
Reality is that a financial plan is just a lot of assumptions about an unknown future, and we’re creating it with our current selves

Discussion Topics:

Tell me something you were convinced about that you’ve changed your mind on (style, preference, whatever). Do you think you’ll change your mind about that thing again?
Are there other things you’re convinced you will/won’t change your mind about?
How can we build plans that allow for people to change their mind (a potentially expensive reality)?
We all have inherent biases due to our way of thinking. Here is just a small sample of common cognitive biases:
Law of small numbers: We bias towards anecdotal examples rather than statistically significant data. So we may generalize one incident to an entire population.
Confirmation bias: We may be too quick to seize on limited evidence that confirms our existing perspective. And we may be too quick to dismiss contradictory evidence for the same reason.
Over-optimism: We tend to come up with plans and forecasts that are unrealistically close to best-case scenarios.
Assigning cause to random chance: We are quick to assign causality to events that may in fact be unconnected.
Recency bias: We bias towards recent events when we make judgments and decisions.

Resources:

How Risky Is It, Really?: Why Our Fears Don't Always Match the Facts

https://www.amazon.com/gp/product/B003O86EZK/ref=dbs_a_def_rwt_bibl_vppi_i0

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