My Process For Making Huge Decisions Ep 536

In this podcast, the host and founder of acquisition.com, discusses the critical importance of decision-making and the influence of emotions and biases on our choices. He emphasizes that decisions are the pivotal moments that shape our lives and highlights the significance of creating the right environment for making significant, irreversible decisions. He shares personal experiences and a decision-making framework involving rest, nutrition, separation from daily routines, and operating from a place of abundance to minimize emotional impact and make more rational choices. The host's key message is that by controlling the environment and acknowledging our emotional and cognitive biases, we can make clearer, more beneficial decisions for our long-term success.

• Speaker A emphasizes the importance of reducing anxieties, stressors, and noise to avoid emotional triggers that can lead to poor decision-making.
• The goal is to create a conducive environment for making rational and effective decisions without being influenced by irrelevant data points or emotions.

"What we're doing here is we're trying to decrease the anxieties and the stressors and the noise that normally will confound the decision making process because they'll start triggering emotions that will then force you to start finding and nitpicking different data points to then make a supposedly rational decision that is wrong."

• The quote explains that the aim is to minimize factors that could adversely affect decision-making by causing emotional responses that lead individuals to focus on the wrong information, resulting in incorrect decisions.

• Speaker B views business as a competitive game and uses the podcast as a medium to share lessons learned from building a successful business empire.
• The intention is to impart knowledge that can help others grow their businesses and potentially collaborate with Speaker B's company.

"The wealthiest people in the world see business as a game. This podcast, the game, is my attempt at document the lessons I've learned on my way to building acquisition.com into a billion dollar portfolio."

• This quote indicates that Speaker B believes successful businesspeople approach business strategically, like a game, and the podcast is a way to chronicle and distribute the strategies that have led to their success.

• Speaker A discusses the critical nature of decisions in life, stating that a single decision can have life-altering consequences.
• Decisions are described as the junctures that can significantly change the trajectory of one's life, whether positively or negatively.

"So one of the important, I mean, the most important things that we have in our lives are our decisions, right? And one of the things that I live by is that we're one decision away from changing our life forever, right?"

• This quote highlights the speaker's belief in the profound impact that even a single decision can have on an individual's life, shaping their future in ways that can be both constructive and destructive.

• Speaker A introduces a decision-making framework used for significant financial decisions, stressing the importance of the decision-making environment.
• The speaker shares a personal experience of a challenging decision-making process that took twelve months, emphasizing that the decision was not taken lightly due to its substantial impact.

"But believe it or not, for this video, what I want to focus on is actually the environment under which to make the decision, all right?"

• This quote underscores the speaker's focus on the conditions and setting in which decisions are made, suggesting that the environment is a critical aspect of the decision-making process.

• Speaker A notes the difficulty in decision making when the available information remains constant but conclusions vary day-to-day.
• Recognizing inconsistency in decision-making outcomes as a warning sign of potential mistakes.

"And one of the difficulties that I was having is that the information that I had was not changing. And yet my decision of which way to go continued to falter."

• The speaker illustrates the challenge faced when, despite having a fixed set of information, the decision seems to fluctuate, indicating a problem with the decision-making process itself.

• Speaker A clarifies that the decision-making process discussed is intended for the most critical decisions in life, not for everyday choices.
• Examples of significant life decisions include choosing a spouse, deciding where to live, and career-related choices.

"I would say that you should find and use this process for the most important decisions you make in your life."

• This quote recommends using the described decision-making process for major life decisions, implying that not all decisions warrant the same level of scrutiny and framework.

• The speaker discusses the importance of taking time to analyze irreversible decisions with downstream consequences.
• Emphasizes that such decisions require more careful consideration due to their long-term impact.

"Are we going to make this big strategic change in our business? Those are big, irreversible decisions. And that's the key for me, is that if a decision is irreversible, and has downstream consequences, then those are the ones that I take more time to analyze."

The quote highlights the significance of deliberating on decisions that cannot be easily reversed and will have long-lasting effects.

• Speaker A introduces the concept that brain chemistry, including levels of dopamine and serotonin, influences decision-making.
• Asserts that humans are fundamentally emotional decision-makers.
• The goal is to manage the extent to which emotions influence decisions.

"One of the key pieces of how we decide is the brain chemistry that is going on. So whether you have lots of dopamine, lots of serotonin that is circling around in your brain will ultimately affect how you make decisions."

This quote explains that the presence of certain chemicals in the brain can affect our decision-making processes.

• Acknowledging the emotional component in all decisions is crucial, even those considered rational.
• Failing to recognize the emotional aspect can lead to being lost in decision-making.

"If you don't acknowledge that emotions weigh into all of your decisions, even your, quote, rational ones, you are lost."

The speaker emphasizes the need to be aware of the emotional influences on decisions to avoid being misguided.

• Identifying when one is feeling emotional is a key step in controlling decision-making.
• Emotions can slow down the decision-making process, and rushed decisions are prone to mistakes.

"So what you can do is first identify when you are feeling emotional. And a lot of guys feel like this is like a foofu term. If you're angry, it's emotional. If you're insecure, that's emotional."

This quote suggests that recognizing one's emotional state is the first step in mitigating its impact on decision-making.

• Emotions decrease the speed of decision-making.
• The speaker and Leila live by the credo that "mistakes love a rushed decision."

"If you have emotions, it decreases the speed with which you make decisions. And mistakes love a rushed decision."

The quote indicates that emotions can lead to slower decision-making and that hasty decisions are more likely to result in errors.

• Speaker A mentions two biases to be aware of: confirmation bias and conviction bias.
• Confirmation bias involves seeking data that supports one's pre-existing emotional state.
• Conviction bias leads to self-deception to protect one's ego and the desire for a positive outcome.

"You have two biases that you have to fight against. One is confirmation bias, which is your emotional soup in your brain is going to say, this is what I want because this is how I feel safe."

The quote describes confirmation bias as a tendency to look for information that aligns with one's emotional predispositions.

"The second is conviction bias, which is how convicted am I in this thing or this decision? The more you believe in it or the more you want the positive outcome to occur, the more you will purposefully blind yourself because you want to save your ego and how you feel about yourself."

This quote explains conviction bias as the inclination to ignore evidence that contradicts one's beliefs or desires, often to preserve self-esteem.

• Individuals often question others' decisions without realizing they are similarly judged.
• It's important to recognize that the perspective of decision-making is relative and subjective.

"Why on God's earth would they make those decisions when in reality, that person is you and it's other people who are looking at you, right?"

The quote emphasizes the tendency to critique others' choices while failing to see that others may view our decisions with the same skepticism. It highlights the importance of self-awareness in understanding decision-making.

• Speaker D requests assistance in promoting the podcast without monetary transactions.
• The support would enable the podcast to aid more entrepreneurs and improve business ecosystems.
• The specific request is for ratings, reviews, and sharing of the podcast.

"The only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

Speaker D is asking for the audience's help in sharing the podcast to reach and assist a larger entrepreneurial audience. They emphasize the non-commercial nature of the podcast and its goal to positively impact the entrepreneurial community.

• Speaker A discusses strategies to reduce emotions' influence on decisions.
• Emotions can significantly affect the rationality of decisions.
• The goal is to make the most beneficial decisions for long-term outcomes.

"So this is how I have learned to help mitigate or decrease the emotional impact or the impact that my emotions have on my decision making process so that I can at least be as rational as I can possibly be and operate from the stance that will benefit myself in the highest degree in the long run."

Speaker A outlines their approach to minimizing the effects of emotions on decision-making, aiming for rationality and long-term benefits.

• Good sleep and being well-fed are essential for clear decision-making.
• Physical states can influence stress tolerance and emotional responses.
• The strategy involves reducing stress and noise that can lead to emotionally driven, irrational decisions.

"Number one is that I make sure that I am well rested when I make the decision. [...] Number two is to be well fed."

Speaker A lists two critical factors for sound decision-making: adequate rest and proper nutrition. They suggest that these factors contribute to a clearer state of mind, which is crucial when making significant decisions.

• The body's stress response affects decision-making.
• Eating can increase stress tolerance by affecting serotonin and dopamine levels.
• Managing stress is part of making rational decisions that are not influenced by emotional biases.

"Your body interprets stress, both physical and emotional, the same way. It's a cortisol response. And so you, in a very real way, when you eat more, are more stress tolerant."

Speaker A explains how the body's reaction to stress is uniform, whether the stress is physical or emotional. They point out that eating can improve one's ability to cope with stress, which is a factor to consider when preparing to make important decisions.

• The speaker emphasizes the importance of creating a conducive environment for making decisions.
• Key aspects include resting, eating well, and distancing oneself from daily activities or spaces associated with past decisions and emotions.
• Removing oneself from familiar anchors can minimize external influences on decision-making.
• The goal is to make decisions from a place of needing nothing, embodying a state of abundance.

And the third piece of the environment that I try and create is, if I can, I try and get space away from the day to day activities that I have.

This quote highlights the strategy of physically distancing oneself from one's usual environment to avoid the influence of past experiences and emotions associated with that space.

And so the key to make as rational of a decision as you possibly can is to not care about the outcome either way and to realize that you already have everything you need or want.

Here, the speaker underscores the importance of detachment from the outcome of the decision, suggesting that a sense of self-sufficiency leads to more rational decision-making.

• The speaker outlines a four-step process for rational decision-making: rest, eat, separate, and operate from a place of needing nothing.
• These steps are designed to reduce the impact of emotions on decision-making.
• The process aims to allow for a more rational, clear-headed approach to important decisions.

Number one, rest. Number two, eat. Number three, separate. Number four, operate from a place of needing nothing.

This is a concise enumeration of the four steps that the speaker believes are crucial for rational decision-making.

They can disinhibit to a great degree. The extent to which your emotions will influence your decisions.

The speaker explains that by following these steps, the influence of emotions on decisions can be greatly reduced, allowing for more rational choices.

• The speaker reflects on personal past experiences where emotion-based decisions led to negative outcomes.
• Quick actions on irreversible decisions, especially when emotional, are described as a recipe for a difficult life.
• The speaker suggests using Charlie Munger's inversion process to understand how to avoid poor decision-making.

And I'll say that firsthand, a lot of the decisions I made in my past that were based on emotions ended up really biting me in the ass, especially when I had lots of emotions and I acted really quickly in large ways against irreversible decisions.

This quote is a personal reflection on the negative consequences of making hasty, emotion-driven decisions.

So we look at those things and we reverse them all to stack in our favor so that we can have the best possible decision.

Here, the speaker advocates for inverting the conditions that lead to poor decisions to create a framework that supports making the best possible decisions.