Make Better Decisions

“I am convinced that life is 10% what happens to me and 90% how I react to it.” Charles R. Swindoll

Whether it’s figuring out whether to take the job offer or not, who to date, where to go to school, or what to have for dinner, every day is full of choices.

The quality of our lives are the results of the choices that we make. We actively design our life with every decision we make.

No pressure, right?

We often have very little information on what the outcome of our choice will be, and we can have a difficult time weighing the pros & cons of a particular choice we’re faced with. That’s why it can be easy to get “paralysis by analysis.”

That’s why I want to share 3 psychological elements that influence the choices that you make, and once you understand them it will help you make better choices more quickly.

“One should make his decisions within the space of seven breaths.” Lord Takandobu

Element 1: Loss Aversion

As much as we’d like to believe that we’re noble creatures driven by logic & reason, we’re actually weak apes who are terrified of having things taken away from us.

When we think about the future, we’re much more concerned with what we could lose instead of being excited about what we could gain. Our motivations are more about what we can keep than what we can get.

This is why it’s easy to get stuck in negative mental loops about how everything is going wrong in our lives instead of appreciating all the amazing things that are actually going right.

When you consider a decision, ask yourself if you’re deciding to keep what you’ve always had, or if you’re opening yourself up to getting what you’ve always wanted.

Don’t (only) think about what could go wrong. Think about what could (also) go right.

Element 2: Intrinsic & Relative Value

Everything is relative.

“When you sit with a nice girl for two hours you think it’s only a minute, but when you sit on a hot stove for a minute you think it’s two hours.” Einstein

It’s the same 2 hours in both cases, but your perception of its value is different. The same goes for making choices.

Think about the proportional value of what you’re going to win or lose when making a choice. If you stand to lose $5 and you’re a millionaire, it’s a (relatively) low risk decision. If you only have $20 to your name, though, suddenly $5 is a significant amount of money.

The intrinsic value is the same (near worthless paper), but the relative value is much different.

If the stakes of a choice seem high right now, take the course of action that will increase your relative value the most.

Element 3: Anchor Points

Anchoring is a cognitive bias that deals with our tendency to rely too heavily on the first piece of information we have when making a decision.

Think about buying a car. What’s the first thing the sales person does? Takes you to look at the most expensive car on the lot.

He knows you’re looking for something sensible for your family of 5. He knows they’ll never all fit into that shiny sports car he’s showing you. He also knows that when you see the price tag of that sports car, your mind uses that as the set point for how much cars cost.

It’s now the anchor point.

Now, when you look at the minivan, its price appears much more reasonable, relative to the sports car (see element 2).

That technique is a powerful 1, 2 punch to your psychology, and it works.

This is why a sales person will help you buy your suit first, and then the little stuff later: your mind uses the price of the suit as the anchor point for making price-based decisions later (relative to that anchor point).

So when you’re evaluating a decision, and how it will play out, understand that your emotional connection is directly linked to the first piece of information you consider. Use this to your advantage by anchoring yourself to a positive outcome, and go from there.


Decision making is a messy system with a lot of fuzzy math involved. Our conscious brain plays a much smaller role than we’d like to admit, so take the time to really understand how your non-conscious mind influences your choices.

Take control of your choices, and you’ve taken control of your life.

How Do You Motivate Employees (& Yourself)?

Extrinsic vs Intrinsic Rewards

Extrinsic rewards are physical objects or tangible benefits bestowed by an outside agency (like winning a trophy or a gold medal). Intrinsic rewards are the feelings & emotions accompanying an activity for its own merit (like the feeling of accomplishment at the top of Mt. Everest).

There are thousands of ways employers have tried to boost morale & worker satisfaction in an effort to maximize bottom line earnings. But, what actually works?

Extra vacation days? Annual bonuses? Fun work environments? Team building exercises?

There’s an interesting study from 1973 that demonstrated that extrinsic rewards often backfire. They tend to undermine the intrinsic motivation to perform at a high level which results in poorer job performance overall.

The Study

In a nursery class of 3-5 year old children who liked to draw, researchers divided them into 3 groups:

  1. Those who were told they would get a certificate for drawing (Expected Group)
  2. Those who were not told they would get a certificate for drawing, but would receive one afterward (Unexpected Group)
  3. Those who were neither told about a certificate, nor received one afterward (Control Group)

After the initial session, researchers waited a couple weeks and then implemented the second phase of the experiment.

All the children were in a room with paper & crayons, but no mention was made of a reward for drawing. Children in Groups 2 & 3 spent the most time drawing whereas children in Group 1 spent the least time drawing.

What Does This Mean?

If you use a quid pro quo system of motivation for employees (like a cash bonus), you’ll actually decrease motivation to do a good job at that task unless you continue the rewards. At first, the money triggers a release in dopamine in exactly the same way as someone anticipates the effects of tobacco, cocaine, or any other kind of addictive drug.

The weird thing is, however, people tend to overestimate how much they’re going to enjoy the payoff when it actually gets there, and they acclimate to the dopamine hit. That’s why entrepreneurs & performers who choose to turn a hobby into a full time career tend to go through a period of feeling very low motivation to do something they previously loved to do for the sheer joy of it.

“If I’m not getting paid for it, why would I do it?”


So How Do You Get The Best Results?

There’s the easy way, and the hard way.

The hard way is to find people who love to do the thing you need done, and then set them loose. Let their intrinsic motivation of satisfaction drive their efforts for you.

Finding this perfect overlap of interest & job can be time consuming and difficult. That’s why it’s the hard way.

The easy way is to make rewards unexpected and random. Understand, however, when something happens once people will expect it again. The trick is to do it at random intervals as opposed to a “random” annual bonus at Christmas. (Same goes for verbal praise, and any other form of positive feedback. Random distribution is more effective.)


  • Money & extrinsic motivators are much less effective than aligning someone’s intrinsic motivator to complete a task
  • If you’re going to use an extrinsic motivator, it’s much more powerful if it is given unexpectedly