When it comes to decision-making, do you operate on logic or intuition? What about when it comes to major life decisions? Your real estate investments?
Understanding Your Thought Processes
In his book, “Thinking, Fast and Slow,” Daniel Kahneman describes the difference between two kinds of thoughts. System #1 is fast, instinctive and emotional; System #2 is slower, more deliberative, and more logical. These two systems associated with your brain are responsible for how and when you think and they work together to help you make decisions.
Simple evaluations are the work of System #1, while careful assessment and comparison are the work of System #2. When it comes to your major decisions, these two systems will work hand in hand, but it’s incredibly important to recognize that your best outcomes will result when you focus more on evidence than instinct.
Balancing Evidence and Instinct
Why? According to Kahneman, people are more apt to make decisions based on bias and intuition – decisions that are affected by personal experience and memories. Experiences and memories that are only somewhat reliable. And, interestingly enough, when it comes to taking risks we humans tend to look for the safest bet. It turns out that we’re more particular about avoiding losses than working hard to secure gains.
The Importance of Slow Thinking
It’s ok to trust your basic intuition in typical situations and conditions. However, when it comes to major decisions (like purchasing real estate), it’s important to evaluate many conditions so you can plan and execute successfully. Slow thinking requires a conscious thought process using logic rather than memory and emotions. When it comes to big decisions, e.g., one of the largest financial transactions of your life, placing facts over assumptions is wise. So.Is.Thinking.Slow.
Mastering the Art of Thinking
You’ll easily make better decisions when you control how well you think. Understanding your two systems and training yourself to control your thoughts gives you a distinct advantage. When you exercise logic, precision, and clear-thinking, you’ll succeed. And, when you understand your two systems of thoughts and how to switch between fast and slow thinking, you’ll be less biased and more focused on evidence – evidence that will open your mind to more options and help you make better choices.
Thinking is an art we must master and though there is no magic recipe for success, thinking slow will give you maximum focus – focus that will help you master your decision-making. And.Your.Life.
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