Here’s a simple way to save money this holiday season:Avoid unnecessary shipping costs.
If you’re sending gifts to friends and family away from home, do it early. You still have plenty of time to get packages to your loved ones before Christmaswithout paying extra for expedited shipping.
To help you plan ahead, we’ve rounded up standard shipping deadlines for the major postal services.
Note:Deadlines are for delivery by Dec. 24within the continental U.S., unless otherwise noted.
U.S. Postal Service (USPS) Shipping Deadline
Ship by Dec. 14via USPS Retail Ground or Media Mail for standard rates.
USPS Retail Groundis the most common service for gifts and merchandise. Prices are based on delivery distance and the weight of your package(s). You’ll use Media Mail for books, film and printed materials of several pages.
For holiday cards and other envelopes or lightweight packages, ship by Dec. 20.You can mail these items with a regular First Class postage stamp.
For later deadlines and expedited shipping rates, visitUSPS.com.
United Parcel Service (UPS) Shipping Deadline
Ship before Dec. 18via UPS Ground or UPS 3 Day Select.
UPS Grounddelivers in one to five business days, depending on the shipping distance.UPS 3 Day Selectdelivers by the end of the third business day and does not deliver on Christmas Eve.
FedEx Ground delivers in one to five business days, depending on your location in the continental U.S. Seethis handy mapfor delivery times in your area.
FedEx Home Deliveryoffers faster delivery to residential addresses. Ship packages up to 70 pounds for delivery within one to five business days.
For later deadlines and expedited shipping rates, visitFedEx.com.
Happy Holidays, Penny Hoarders!
Dana Sitar (dana@thepennyhoarder.com) is a branded content editor at The Penny Hoarder. Say hi and tell her a good joke on Twitter @danasitar.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Remember getting your photo taken with Santa at the mall when you were a kid?
Whether you went willingly or had to be dragged by your hair like yours truly, photos with Santa are a time-honored Christmas tradition… for human children.
But if your only babies are fur babies, you can still participate in this slightly awkward Yuletide ritual. And it won’t cost you a thing.
If you want a Christmas keepsake photo of Fido or Sassy on Santa’s lap, it’s easy to participate.All you have to do is head to a participating PetSmart on Dec. 8-9 or Dec. 15-16 between noon and 4 p.m. local time.
Santa will gamely smile while holding your furry companion, but we’re still not sure whether he’s granting any wishes. He’d have to speak pet, after all.
Jamie Cattanach’s writing has been featured at The Write Life, Word Riot, Nashville Review and elsewhere. Find @JamieCattanach on Twitter to wave hello.
Jessica Gray is an editorial assistant at The Penny Hoarder and plans to bring her naughty pets to see Santa this weekend. She updated this post for 2018.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Recently, I came across a wonderful 1995 speech by Charlie Munger to an audience at Harvard University, and I wanted to share it with you along with some of my thoughts on it. A lot of thoughts, actually. I think this is one of those longer articles with lots of things to think about that you might want to bookmark and come back to multiple times in the future.
Munger, for those unaware, is the vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett. Buffett has described Munger as his partner and it’s fair to say that at least some of Buffett’s success and the success of Berkshire Hathaway comes from that partnership.
Here’s the speech I’m referring to:
If you can’t see the embedded video above, here’s a quick link to it; if you’d rather read than watch a video, here’s a written version of the speech with a few minor differences (I think this is Munger’s notes from the speech, which he followed pretty closely).
The core idea of the speech is that humans often operate in a counterproductive fashion and understanding why is helpful in everyday life and in investing. Humans spend an awful lot of their time doing things that are fairly obviously not the best thing they could be doing.
Why do we do this? The big reason is that our nervous system and body evolved to handle life as hunter-gatherers on the savannah, not life as an information worker or a retail worker in a city. Our instinct in terms of what to do with our time is honed for hunter-gatherer life and that often runs directly in opposition to what is the best choice for ourselves in modern life.
Munger finds that split deeply fascinating and has observed and studied it throughout his life. Over that lifetime, he’s home up with a list of 25 biases that most people instinctively fall into, where our gut instinct is almost entirely opposed to the fairly obvious “better thing” we should be doing.
I found this list of Munger’s biases wonderful and wanted to share them with you, along with a few thoughts on each. Just being aware of these biases and trying to push back against the ones that affect us the most can have an incredibly powerful impact on the quality of our lives. Awareness is not a perfect solution, though; it takes effort to really overcome most of these.
Reward and Punishment Superresponse Tendency
We tend to favor whichever option before us offers rewards and avoids punishment in the short term. We will do whatever will lead to money, friendship, sex, prestige, and fun in the short term and strongly avoid punishment and harm in the short term. Even more so, once we see that a particular behavior results in a short term reward, we tend to repeat it.
The problem is that many things that offer those kinds of short term rewards tend to have harmful effects in the long term, and the things that are painful in the short term often have great long term benefits.
For example, spending all of your money on something fun today is an obvious temptation and short term reward, but the long term cost of it is immense. Most people figure out that some balance is needed, but they often rely on the bias toward short term pleasure as much as possible, which is why most Americans wind up living paycheck to paycheck and a lot of Americans accumulate credit card debt.
On the other hand, exercise is often very hard work and not particularly pleasurable in the short term, even though it has enormous long term benefits. I tend to not enjoy the hardest parts of exercise, but I really enjoy how I feel afterwards and it begins to be a lasting and permanent feeling if I exercise regularly (I tend to go in streaks with this, where I exercise regularly for a while then hit a life disruption and slack off for a while.)
The key to overcoming this is to think often about the long term impact of everything you’re doing and emphasize it strongly in your mind. When you’ve got a little downtime – you’re commuting or you’re waiting for an appointment – don’t play a smartphone game or read social media. Instead, mull over some of your recent decisions and your upcoming ones and think about them with a huge weight on the long term. You might find that the decision looks very differently.
Liking/Loving Tendency
We tend to ignore faults in people and things we like and in people and things that like us. While this is a powerful trait to have when forming social groups as it leads to a reciprocal bond of friendship, it’s constantly used against us in marketing, where we’re lured to like products by use of other things we like – sex appeal, motherhood, and so on.
It also leads us to overlooking flaws in people and things we like, which can lead to situations where those flaws are damaging to us, such as when we continue to love and care for someone who steals from us.
How can we overcome this? First of all, surround yourself with good people and make an effort to like them and bond with them. Think of people in your life that you consider to be good or great people and fill your time and your social circle with them. Second, try to avoid media sources that rely heavily on advertisement and product placement. In general, you’re better off avoiding most media outside of books and films and media sources you highly trust. Doing things like channel surfing or staring at social media almost always leads to a distortion in our perspectives because of the like/love tendency.
Disliking/Hating Tendency
This is basically the reverse of the item above. We tend to find unnecessary fault and amplify the faults while ignoring the virtues of people and things we dislike and people and things we perceive as disliking us. This is almost never useful, and it’s easily exploited into awful behavior.
We fall into this trap when we stereotype people or things based on one or two minor details or because of the tenuous word of someone or something we think we trust. Great examples of this include actual racism and bigotry, negative advertising, political extremism, workplace gossip, and an awful lot of social media.
The best way I’ve found for overcoming this bias is to take something I don’t like and intentionally start naming good things about it. Sometimes, I have to do research to figure it out, so I’ll Google “why do people like X” and find out what good traits that person or thing has. If that won’t work, I might ask people who seem to like the thing I’m trying to learn more about.
Doubt-Avoidance Tendency
We tend to avoid situations where we’re doubtful and instead choose situations where we’re certain. While this makes sense in situations where there is an imminent physical threat, it’s often disastrous in the modern world.
Avoiding doubt means that we often make nuanced decisions very quickly without really thinking them out. We’ll encounter a difficult decision and either try to avoid that decision entirely or else make a snap decision without considering it very carefully, particularly when it’s not obviously clear to us what the best decision actually is.
The best solution here is to consistently rethink our ordinary decisions without assuming that we’re making the right call. Again, the best process here is that when you have some downtime, you take some recent choices you’ve made, even if they seem completely normal, and think through whether or not it’s really the best choice. Strip away your default tendency to assume that it’s a good choice, because it may not be – if you feel that tendency to stick with it without a reason, you’re seeing this very bias at work.
Inconsistency-Avoidance Tendency
This follows tightly with the doubt-avoidance tendency from above. Once we’ve made a particular decision once, we’re often compelled to repeat it rather than doubting that we made the right decision in the first place.
This tends to pop up whenever we find ourselves in a rut in life. We keep doing the same things and following the same habits, but we rarely sit down and actually question most of them. We usually only question the most egregiously negative habits and routines that we follow. We buy the same things at the store without rethinking whether we’re buying the right version or even whether we really need to make the purchase at all. We hold onto the same political beliefs even though the world around us might be changing.
The best counter against this that I’ve found is to stop myself when I’m doing something very ordinary and ask myself why exactly I’m doing this or why I believe this particular thing. Why am I buying this particular item at the grocery store? Why am I doing the dishes this way? Don’t just assume that it’s the right thing to do because you’ve always done it that way. Instead, try to figure out whether it’s actually solving a problem and, if it is, whether it’s actually a good solution to that problem. I do this fairly regularly and I actually have a reminder on my phone that goes off once a day in the middle of the afternoon that asks me why I’m doing what I’m doing right now.
Curiosity Tendency
Humans are naturally curious creatures. While that can be an incredibly powerful force for good, as it encourages us to learn new things, it can easily be exploited into time wasting. Think about how our curiosity works against us when we reload social media yet again to get the latest updates, even though there’s nothing really new there.
The trick here is to channel curiosity when it’s useful and shut it down when it’s not useful. It’s not an easy thing to do, however.
One good counterstrategy against the curiosity tendency is to ask yourself a simple question whenever you’re about to read something or “check” something: what am I hoping to get out of this that’s actually worthwhile? If you can’t immediately name something, then that thing you’re reading or checking probably isn’t fulfilling a valuable place in your life and you should strongly consider cutting it or sharply reducing the time you spend with it.
Kantian Fairness Tendency
This is just a fancy name for the golden rule: do unto others as you would have them do unto you. We tend to go through most of life treating others as we would like to be treated and, over time, that develops into a lot of cultural norms, like basic traffic rules and being polite to others.
When people seem to violate those norms – as can happen when we meet a rude person or someone from another culture – we often get very offended, far more than the act is actually worth. Think about what happens when someone speeds by you in traffic or “cuts you off” in traffic (from your perspective). Most of us get mad; it’s road rage. However, the other person likely has no idea that they’ve done anything egregious and would feel bad if they realized it. Someone might “cut you off” when they just think everyone is taking turns and it’s their turn. We just blow it out of proportion in our own heads.
The best solution is to not sweat the little stuff in life and let it be if someone commits a minor offense or speeds around you or seemingly cuts in line in front of you. There are bigger things to worry about in life. Instead, channel your energy toward achieving your own goals efficiently. Rather than getting irate about the guy who just cut you off and slamming on your horn and yelling in your car, just focus on getting to your destination safely and efficiently. The guy cutting you off costs you maybe a second, but that rage can disrupt you for hours.
Envy/Jealousy Tendency
This pops up when we desire something that someone else has. Think of the jealousy you feel when someone has something you desire or when a friend is able to do something that you can’t afford to do. This can often lead to negative feelings toward the other person as well as negative feelings toward ourselves, neither of which really makes much sense.
The thing that people overlook is that someone else’s fortune has very little to do with them. Someone else acquiring something has very little impact whatsoever on your ability to acquire it. The only way to improve your ability to have something is to improve your own situation. Feeling negativity towards others because of their acquisitions or achievements gains you nothing. What matters is improving you.
Whenever you feel jealous or envious of someone else, ask yourself whether you really want what they have. Is that something you truly want? Then, if you do, ask yourself what you need to do to achieve a life situation where you can have that thing. What do you need to improve so that you can get there? Blame and negative feelings don’t help.
Reciprocation Tendency
For the most part, people tend to reciprocate the behaviors of those around them. If people are nice to you, you tend to be nice back; if people aren’t nice to you, you generally tend to not be kind in return. If someone does you a favor, you tend to do something in return.
That’s a solid way to behave in polite society, but it’s also a behavior that’s easily exploited by the “foot in door” technique. In other words, someone will start out by asking a big favor from you, and then will appear to offer you a favor in return by cutting back on their initially-asked favor. Because we tend to reciprocate favors, we’ll often want to extend a favor in return and say yes to the smaller request. Clever marketers take advantage of this; it’s why when you talk to charities, they’ll often give you a high number first, but the number they’re actually hoping to get is much smaller. They’ll do you a “favor” of cutting back on the request if you do a “favor” by saying yes.
A good way to cut through that bias is to decide what price you’re willing to pay before interacting and simply saying “no” if someone tries to interact before you can make that decision. I have no qualms saying “no” to anyone who asks me for a charitable gift, because I want to make up my mind on my own regarding how I want to give and where. Just have a policy of saying “no” to anyone asking you for a lot of money or a big favor without a relationship already in place. You can always rethink things and decide to give tomorrow or buy tomorrow, after all.
Influence-from-Mere-Association Tendency
If you see something collected with other things you think of as “good,” you tend to think of that new thing as “good” as well. Similarly, if you see something collected with other things you think of as “bad,” you tend to think of it as “bad.”
How is that bad? There are many ways. For example, a gambler might look at recent instances of putting a coin in a slot machine and winning as being on a “hot streak” and think of putting coins in a slot machine going forward as a “good move.” It leads to some pretty bad stereotyping behaviors, too, as you might begin to associate a person who has two or three good traits as having other good traits, even when that’s not necessarily true. This is why, for example, news anchors are often attractive.
In situations where there’s not much at risk, this is an okay bias to have, but whenever you’re about to invest money or time, ask yourself what’s different about this time than last time. Is it really a repeat of the same thing? With a slot machine, for example, the tumblers are very unlikely to repeat what they did before, even though our brain is seeing a pattern. When you’re about to spend resources, stop for a second and ask if the pattern you’re seeing is real or not.
Simple, Pain-Avoiding Psychological Denial
This one’s easy – we avoid painful situations through denial. We pretend it’s not happening. We use vices to help us ignore them. We come up with all manner of things to help us avoid facing the harsh reality.
Of course, there is almost no situation in which denying the truth will make things better in the future. It is purely a short-term tactic, one that’s likely to leave things even worse when you are finally forced to face facts.
The best approach is to openly face the truth and don’t look away. Stare it right in the face and recognize that this is simply how things are. Avoiding it by delaying it or by falling into chemical dependency will not make it better. Rather, this is the truth and the question becomes how you can make things as good as possible from here.
Excessive Self-Regard Tendency
People tend to overestimate their abilities, overvalue their possessions, overvalue their decisions and opinions, and tend to naturally like people who are similar to themselves (because if they’re like me, they must be good). We all do it to some extent; others are almost insufferable for it.
When this lines up with other biases, like pain avoidance, it can lead us straight into making rash decisions which often come back to bite us because we simply didn’t think them through. You’re also very likely to fall into “groupthink,” where you congregate with and overvalue the opinions of those who happen to agree with you.
There are a number of things we can all do to overcome this bias.
The biggest one is to not overlook poor performance. If we have achieved poor results, we should look at ourselves first and foremost. When we’re falling prey to excessive self-regard, we look for others to blame when our performance falls short. “It can’t possibly be MY fault… I’m great!” The thing is, most of the time, poor performance is at least somewhat caused by you and your inflated regard for your abilities. If you fail at something, step back and look at yourself. Where did you fall short? Avoid blaming others.
When you’re making important decisions or following important procedures, use a checklist. Prepare the checklist when you’re not in the heat of the moment and then rely on it when you’re actually doing something important or making a decision. That way, if you fail, the next step is easy – you need to revise and improve that checklist!
Another great tactic is to trust the feedback of honest people in your life. Most people in your life are not going to give you faulty one-on-one feedback. If your boss gives you a mediocre performance review, it’s virtually never because your boss has a vendetta. It’s almost always because your performance is faulty and it’s easier for your boss to mold you into a better employee than to move on. The same is true of anything told to you in a one-on-one situation in confidence. Trust the advice and feedback of people in your life.
Overoptimism Tendency
We tend to believe that our future is rosy and that it’s a straight line from here to the success and goals we desire. When we think of our life in the future, it’s what we want it to be and we don’t even think of things going wrong most of the time. We buy into the notion that everything will just work out.
There’s nothing wrong with a rosy daydream, but when you start taking action based on that overly optimistic view of the future, then you start making mistakes.
There are two good techniques I’ve found for getting around this.
One, don’t make a major decision without doing the homework, trust the numbers, and assume things will go somewhat poorly. Whenever I jump into things with the assumption that everything will turn out rosy, I usually fall flat on my face. Instead, I’ve found it’s much better if I assume things will actually go pretty poorly. I usually try to set deadlines that assume that many things will go wrong. I try to set goals that assume some setbacks along the way. I use pretty modest assessments of investment returns and I usually calculate things where I’m investing notably less than I think I can actually pull off.
Two, I ask for outside advice. I find that other people tend to offer a healthy dose of reality when I ask people I trust in a one-on-one situation what they think of my plans. It can hurt, sure, but it’s often what I want to hear. I usually ask people to pick apart my plan and tell me where it’s likely to go awry, and I trust them.
Deprival-Superreaction Tendency
We tend to greatly overreact to losses or to small deprivations. The joy we get from getting, say, $50 is far less than the negative feelings we get from losing $50 or having $50 taken away from us.
This takes a lot of different twists and turns, most of which go in a direction that’s pretty harmful for us. One of the worst is the sunk cost fallacy, where we tend to far overweigh the options that keep us from even the smallest losses and often choose them over options that are much better overall. For example, on a trip, someone might absolutely insist that you go to an event where you pre-bought $10 tickets, even though some other event is far more enjoyable, because of the cost you already sunk into those tickets.
Another example is that we’re often lured by near misses, which cause us to keep trying and often to keep losing money. For example, if we see two red sevens on a slot machine, we’re likely to dump in another quarter. If we knock over four out of five milk bottles at the carnival, we’re likely to pony up another dollar for a throw.
The best way to avoid this kind of bias is to look at situations discretely without using recent events to sway you. For example, with the tickets, their cost is already spent regardless of what you do, so you should choose the more enjoyable option in the moment. All the tickets actually do is give you another option of things to do, but that might not necessarily be the best option. (I tend to think empty seats at a sporting event are an example of people overcoming the sunk cost fallacy.) If you’re playing a carnival game, consider each play independently of what came before and spend that money accordingly.
Social-Proof Tendency
Whenever we’re in a situation where we’re uncertain as to what to do next, we tend to just do whatever most of the people around us are doing. Most of the things we do in our lives, things like bathing and eating regular meal times, are done because of social proof – that’s what other people do, right?
Sometimes, this is good. It can be really useful for finding a big event, as the crowd is usually moving toward it. A lot of healthy behaviors (like good hygiene) are reinforced by social proof, too.
There are also many negative examples of social proof, like investment bubbles – lots of other people are investing, so I should invest in this thing, too! – and why salespeople try to isolate people who are close to buying from other casual customers (because other casual customers often leave) and product placement and reality television (that’s not how other people actually live, so you shouldn’t use it as social proof).
There are several good ways to avoid this social proof effect if you begin to sense it’s leading you astray. For starters, simply isolate yourself for a bit and ask whether or not that group behavior really makes any sense. Think through many of your life processes when you’re alone and even develop checklists. If you’re unsure, get into a one-on-one situation with someone you trust (or the most seemingly trustworthy person available) and ask that person for advice.
Contrast-Misreaction Tendency
This occurs any time we misjudge a situation because it’s out of the normal context. For example, think of a slightly chilly day in August. We’ll probably overreact to that chilly day and dress excessively warmly because of the context of hot days around it. We’ll also tend to overlook minor changes over time as we continue to think of things as the “normal” they’ve always been – the “boiling frog effect.” (I tend to think some of the challenge many people have with climate change comes from this effect, actually, as climate change is very small on a day-to-day basis and thus it seems normal.)
While this can be helpful in a lot of situations because it allows us to filter out a lot of information about our environment and instead focus on the things that are significantly different (which are usually the most important things), it can cause us to fall into a number of bad situations.
One of the worst is price anchoring, where we’re shown items that are way overpriced before seeing an item that’s at least closer to reasonable pricing and that last item seems like a bargain. Another example is expensive add-ons, where when we’re buying something expensive, an add-on seems small, but outside of that expensive purchase, we’d probably balk at such an expense (think of the “extended warranties” offered when buying an expensive electronic device).
The best defense here is to slow down. Don’t ever make purchases in the heat of the moment. Ask if you can hold off on that purchase for a day or two, then consider that purchase outside of that situation. If they say “no,” then just skip the purchase.
Stress-Influence Tendency
While light stress can often improve performance, adding too much stress often forces people into a fight-or-flight response where they make extremely impulsive decisions and their performance becomes disastrous. I notice this myself when I’m “hurrying too much” to get a task done and I end up mucking the whole thing up.
Often, stress is very much self-induced. We often have a lot more time to think through a situation than we realize and stress is often created by giving too much power to outside forces and their condensed timelines. At the same time, if we’re applying stress to others (say, if we’re in a management situation), if we apply too much, the results are going to be terrible.
What can you do to dig out of stress-influenced misjudgments? It’s easy. When you find yourself in a high-stress situation that’s causing you to make poor decisions and have bad performance, focus on removing some of the issues that are causing the stress. If it’s workplace stress, talk to your supervisor (or their supervisor) and discuss exactly what is stressing you and what can be done to reduce that stressor. If it’s in other aspects of your life, back away from those situations as much as possible. Stress can make all of your decisions poor.
Availability-Misweighing Tendency
We often make decisions based mostly on what’s recently been available to us. We don’t consider, for example, things that are stowed away in our closet or old memories or old relationships when we’re trying to solve a problem.
While that’s a good way to quickly come up with a “good enough” solution to a problem, it often leads to ruts in our thinking. We wind up watching the same types of television shows, going to the same restaurants, eating the same meals. We wind up hanging out with the same people and use the same tactics at work. This often amplifies the other biases on this list, too, because we often will make misjudgments based on a small pool of information (that which is easily available or in our recent memories).
How do we get around this? Checklists are one good strategy. Make checklists for many of your common decisions and tasks so that you have a standard and well-considered plan to move through. Another strategy is to sometimes do research even on ordinary decisions. Rather than just eating at the usual place, find out what restaurants are available in your area, particularly ones that seem to be better reviewed than your usual haunts. Do this by checking out different review websites, looking at different restaurants, and talking to different people for restaurant suggestions – in short, get information from new sources.
Use-It-or-Lose-It Tendency
Our skills slowly degrade with disuse, even if we don’t realize it. We tend to think that our skills remain largely the same even if we haven’t used them regularly in a long while.
For example, my computer programming skills have somewhat eroded since I wrote code literally every day as part of my job. I still work on independent projects, but I’m not as sharp as I once was.
However, I find that skills where I was once very strong come back to me pretty quickly without much practice, while learning new skills can take a long time. I can get back up to speed pretty quickly for a programming project (at least good enough to get the results I wanted), but it would take me much longer to learn the banjo.
What can you do about this? If you have skills in your life that you rely on, continually practice them in a meaningful way. Don’t let a skill that you truly rely on atrophy – make room in your life to practice that skill every day if necessary. It’s a good idea to make a list of skills to maintain and practice and make room in your life to practice them. Furthermore, try to learn skills to fluency, as I did with computer programming. Fluency means that you can simply practice that skill in pretty much any environment with minimal aid; you don’t need help interpreting sheet music or even need it at all to play a nice song on the piano, for example.
Drug-Misinfluence Tendency
There are a lot of substances out there – alcohol, tobacco, marijuana, cocaine, oxycodone, and so on – that alter one’s way of thinking and cause a person to make irrational decisions. Not only do individual uses damage your ability to think well, consistent use does even more lasting damage, and the addictive element can cause a person to fall right into a routine that’s very hard to get out of.
In short, drugs can really mess up your thinking and your long term plans. Any benefit you might get from consumption is not worth the severe cost.
The solution for this one is simple: don’t use any addictive substances that alter your thinking. Hard drugs should be utterly avoided, in particular.
Senescence-Misinfluence Tendency
As we age, it becomes harder to learn new skills and older skills can begin to deteriorate at a faster rate. It happens with different people at different ages, but it inevitably happens if we live long enough.
There’s a way to delay this onset, though, and that’s by constantly learning new skills and ideas and practicing old ones. Fill your life with learning and practicing new skills that you enjoy, starting at an early age and carrying that practice around with you for life.
You can’t stop the inevitable march of time, but you can certainly delay many of the effects.
Authority-Misinfluence Tendency
People tend to follow those who have authority or who have claimed it for themselves. This tends to rest on top of the many other tendencies listed here – by trusting in an authority of some kind, people relieve themselves of much of the confusion and stress of independent thinking and decision making. The authority does that – the follower just does as they’re told and doesn’t have to worry about it.
This is great in the case of a benevolent and wise leader, but a lot of leaders aren’t benevolent and wise, and even great leaders are sometimes misunderstood. Allowing someone else to do most of the thinking for you can quite often lead to disaster.
So, what’s the solution? Be very selective as to who you follow. The people whose orders you follow or ideas you accept without much question should be of the highest character and someone whom you can trust in almost every way. Also, if you find yourself uncomfortable with an idea or an order, don’t default to accepting it just because of authority. The police officer can be wrong. The manager can be wrong. They’re human, just like you.
Twaddle Tendency
In any field, some people tend to produce quality work while others produce junk. In some situations, such as peer-reviewed science, there are systems in place to catch that junk (but even those systems aren’t perfect). In others, like the internet, there’s not much of a filter, which means that the individual has to determine what’s junk and what’s valuable.
This isn’t done with maliciousness most of the time. It’s often the result of someone grossly overinflating their own sense of competence. They truly believe they have knowledge or skills far greater than they actually do and they act in accordance to their own inflated views of their knowledge and talents.
So, how do you filter out “twaddle”? The best way is to have sources of information that you trust because they’ve proven that trust many times. Rely on those sources first and foremost and then require other sources to earn that trust over a long period of time. It’s worth noting that no source is perfect, but good sources will prove themselves over time.
Reason-Respective Tendency
People are inherently attracted by things that make sense and avoid things that don’t make sense. This is why, over the long term, sensible arguments and facts tend to win out.
Notice that I said “over the long term.”
In the short term, nonsensical things and false statements can be presented to make it appear as though they’re sensible or true. This will typically be uncovered over time, but it can trick people in the short term.
Thus, it’s usually a good idea to look for supporting evidence and reasoning before following a high-impact order or adopting a strong opinion. Why is this order being given? What is the thinking behind this opinion? Keep asking why until it makes iron-clad sense, and if it stops making sense, don’t follow the order or adopt the opinion.
Lollapalooza Tendency
This final tendency is simply the combination of multiple tendencies. Whenever multiple tendencies combine together in one situation, they can be very powerful in terms of nudging people into bad thinking.
For example, a religious cult might combine a drug-misinfluence tendency, a twaddle tendency, an authority-misinfluence tendency, and others into one dangerous package.
The best way to handle a confluence of bad tendencies is to trust your gut that something isn’t quite right and then step back and pull on threads to see if you can see any bad tendencies at work, one at a time. Peel it apart carefully. You might just find a mess of bad tendencies all piled up.
Final Thoughts
Quite honestly, I could have written a short article about each of these, how they affect our day to day lives, and how we can work to overcome them. We all fall prey to many of these biases, often with strong negative impact.
Overall, I think a few strategies are really useful for countering lots of these biases at the same time.
First, reflect on recent mistakes, figure out what went wrong, and visualize that situation going forward with better practices (and better results). Simply walk through recent things you’ve done in your mind – particularly those where you think the outcome could have been better or those you’ve just taken for granted for a while – and ask yourself if you were making any mistakes. If you uncover something, consider how you could have done it better and visualize yourself doing it better going forward. I often do this while driving somewhere, but for me, the most powerful tactic for this process is journaling. I often do “three morning pages,” where I simply fill three pages of a journal with whatever’s on my mind, and this type of “after action report” fills up a lot of those entries.
Second, use checklists for important tasks. Plan the steps of your actions carefully outside of the heat of the moment, then follow the checklist you’ve built when you’re actually doing it. I’ve found myself doing this with more and more things in my life. I have a “morning routine” checklist, an “evening routine” checklist, and a “kids get home from school” checklist. I also have a “article preparation” checklist for my professional work that I repeat for each and every article you read on The Simple Dollar. I just follow those checklists automatically each day and, once every month or two, I sit down and think about whether those checklists continue to make sense.
Third, trust the advice of people you trust and respect, especially when it’s given one on one. If you have supervisors you respect, trust their performance reviews. If you have friends who you trust, put a ton of value in their advice. This is especially true when the comments are given in a one-on-one fashion, where there’s no audience and no other motivation than to help you get on a good path.
Fourth, don’t believe you’re always right. Most people think, “Well, I don’t do that!” The thing is, most of us actually do this all the time. We assume we’re right, regardless of what other people are saying. We’re very overconfident in our opinions, our skills, and our performance, and when people point out flaws in our opinions and skills and performance, we often don’t react in a way that leads to an improvement in ourselves. Our goal should always be opinions that are better informed, skills that are sharper, and performances with better results, and when we defend flaws in opinions, half-baked skills, or bad performance by excusing it or blaming others or being overly defensive, we really only hurt ourselves and we usually end up looking far worse than if we were to simply admit fault and strive for the best.
Finally, if you’re unhappy with something in your life, face it now rather than later. Don’t let it fester. Don’t put it off. Don’t let it get worse. Deal with it now, when solving the issue is easier than it probably will be later.
These five tactics strike down a lot of Munger’s twenty five biases, and if you consistently use these tactics, you’ll find yourself consistently in a better place with your money and with every aspect of your life.
While talking on the phone with my daughter last Friday, I heard an unearthly roar and felt the house begin to shake violently. It was the start of a 7.0-magnitude earthquake, which was quickly followed by a second temblor measuring 5.8.
The epicenter was about eight miles northwest of my home in Anchorage, Alaska, but it felt as though it were directly under my feet. My partner flung himself against the grand piano, trying to keep it in place. In my peripheral vision I could see cupboard doors flying open, and hear banging and crashing as items leaped from cabinets and shelves.
But it was the earthquake’s voice that really got to me: a deep, rumbling, booming noise that sounded like a train headed straight at our front door. “Are you hearing this?” I asked my daughter incredulously.
She was – and even though she grew up in Alaska and encountered her share of temblors, Abby had never heard an earthquake that sounded like that.
It lasted less than a minute, but changed a lot of lives. The cleanup and news reports got me to thinking how earthquakes – or any disaster, really – have lessons to teach. Not just about physical preparation, but also the habits of daily living.
After all, residents of Tornado Alley can’t stop the next twister by waving bags of freeze-dried meatloaf at it. People in hurricane regions can nail plywood over their windows, but that won’t protect them against a storm surge that sends seawater into the foundations. Once the immediate threat is gone, it’s how well we’re accustomed to coping that matters as much as how many supplies we’ve stockpiled.
This applies to non-natural-disasters, too: illness, job loss, regional (or national) economic downturn. Developing smart everyday habits will help us cope with adversity when live throws us curveballs. Although some freeze-dried meatloaf might not be a bad idea, either.
Lesson #1: When Stuff Happens, Roll With It
The day of the quake, I’d planned to drive out of town for the weekend. Once we’d swept up the broken glass and checked for serious damage (foundation, water heater, et. al.), I entertained the notion of going anyway.
Radio reports of damage and uncertainty made it apparent this wasn’t a good idea. As much as I wanted to go, it would have been dumb to do so.
Making the right decision isn’t always easy to do. Suppose you help fund a pal’s startup and nothing much has happened, yet they want you to remain an investor. Maybe a sibling regularly borrows stuff and returns it in poor condition. Perhaps the guy or gal you’re dating has wildly different money goals and values, but you really like this person.
Cutting your losses – or preventing them in the first place – is usually the wisest choice. Not the easiest, just the smartest.
Lesson #2: Be Prepared
The north route out of Anchorage was closed for quite a while as inspectors checked for highway and overpass damage. When reopened, it was outbound-only for several hours; eventually the folks on the other side were allowed to come into town.
Those who’d fled to the highway once the shaking stopped, had a long, long wait. I like to think that they already had a decent amount of gas in their cars. Consumer Reports recommends never going below a quarter-tank, but I personally never let it get less than half-empty.
I also like to think those commuters grabbed a snack and something to drink before they left their workplaces (or wherever they were at the time), and that they had a few emergency items in their vehicles. Had they been forced to shelter in place overnight, that could have been some mighty uncomfortable bivouacking.
Edmunds.com has a good list of items to keep in the car for emergencies. (If you live in a snowy area, I’d add a shovel to that list.) By all means compile your own car emergency kit, but think big-picture as well. When things go wrong in life (and they will!), it’s a lot easier to recover if you have an emergency fund, a good credit score, and as little consumer debt as possible.
Lesson #3: Build Social Capital
My partner’s son called after the quake to ask us to pick up his daughter from school. The six-year-old was a bit rattled by the aftershocks that continued all day, but was mostly distracted by the chance to bake cookies with her grandfather and to help me assemble and wrap a holiday gift box for a homeless shelter.
Suppose you suddenly need child care, or pet care, or someone to watch your house in an emergency. Got any plans in place? If not, start building social capital, i.e., relationships with people in your community.
Not only will you save money by trading baby-, pet- or house-sitting, you’ll create bonds that can help in other ways. Should you have to fly back home to be with an ailing parent, it’s a great comfort to know that friends are picking up mail and mowing the lawn while you’re away. Someone is quite literally looking out for you, which feels much better than hiring a service.
Lesson #4: Get the Best Information You Can
A local radio station provided updates from emergency services personnel, and also invited listeners to call in with what they knew. However, they specified “things you have seen with your own eyes,” vs. “hey, I heard that…”
Good thing, too. My teenage nephew called to see if we were all right, and said that a high school in our neighborhood had been evacuated due to flooding and a gas-line break. Since I’d been listening to the radio, I was able to tell him that only minor damage had been reported.
Did it really matter, given that he attends the vocational high school across town? Yes, it did. He has friends at the neighborhood school – and besides, rumors are scary things. The nearby school is surrounded by houses and condominiums, and I would have been super-anxious if I’d believed there was a possibility of explosion.
Get the best information you can in non-emergency situations, too. Just because you know a guy who knows a guy who says that everyone needs whole life insurance, you shouldn’t run right out and buy it. Educate yourself first.
Maybe your peers are convinced that Social Security will be kaput when it’s time to retire. This makes you feel really gloomy, not to mention resentful that you might be paying into something you’ll never get to use. But that’s not true; this piece explains why.
In money and in life, the more you know, the better your decisions will be.
Frequent (and frequently severe) aftershocks made Friday fairly nerve-wracking. Would the next temblor take out the electricity or break a gas line? Did we have sufficient plywood to cover windows if they broke? Although we have plenty of firewood, could we keep the house warm enough to prevent frozen pipes (especially in the baseboard heating) if the power went out and the temperature dropped?
During this time my partner and I were caring for his young granddaughter. Outwardly I was calm and cheerful, in order not to frighten her, but I went through the day with a headache and constant nausea. Logically speaking, I knew this was due to stress and adrenaline overload. Emotionally, it was hard to picture how things would get better; any time I did let my guard down, another aftershock would ratchet it right back up.
Friday night was even worse: I got practically no sleep because of accumulated tension and the all-night aftershocks. On Saturday morning I was exhausted and apprehensive about what the day would bring. My stalwart sweetheart did whatever he could to help me feel better: hugs, tidying up, going out to buy chocolate ice cream. By Saturday afternoon my normal approach to life – “Think of the big picture” – was firmly back in place. Here’s how that sounded:
Neither of us had gotten hurt.
Unlike some parts of town, our neighborhood didn’t lose power.
We had no major structural damage.
Nothing of value was broken.
The aftershocks continue; my nephews and I felt a few at the movie theater earlier this week. (Pro tip: “Ralph Breaks the Internet” is a good antidote to cumulative stress.) Each time I feel the ground tremble, part of me wonders whether it signals the start of another 7.0 shaker. And each time, I apply big-picture thinking:
Am I thrilled about the aftershocks? Nope.
Will they inconvenience me? Yep.
Will they kill me? Unlikely.
In other words, I’m focusing on what’s right about my life instead of what’s temporarily wrong with it. That kind of focus should be the baseline, no matter what else happens to us.
Suppose you lose your job. That stinks. But remember what you still have: a place to live, enough to eat, and a chance to go look for a new job tomorrow. It might not be that simple – but what if it is?
And even if finding a new job isn’t that easy, being able to try at all is a tremendous gift. My daughter was unable to work for much of her 20s due to health issues; she now has a job that some people would consider boring, but the fact that she can work at all is one of the greatest joys of her life.
Or maybe your employer has stopped contributing a 401(k) match. That also stinks. But on the bright side, you’re still able to put money aside on your own. You could also look for ways to save money, thereby freeing up more cash to contribute; The Simple Dollar archive is full of articles that will help you get the most of every dollar.
When things are going right, count your blessings. When they’re going wrong, count those blessings in a much louder voice – it will help you remember that all is not lost.
