the art of values
- Values are encapsulated in choices while you make decisions. Consequently, decisions aligned with your authentic values bring you a sense of accomplishment while those conflicting or devoid of them evoke regret.
- Making authentic value-laden decisions is hard but it’s a core life skill. There’s no dearth for information to help you facilitate a decision but how do you ensure your choices & actions reflect your authentic values?
- When faced with a decision to make, you either let your feelings (desire/greed, fear/agony etc.) drive your choices or you turn on rules to guide your actions i.e. you discover cause-effects to navigate through situations presuming they’re governed by odds. But neither life nor investments is a game of poker. Your values be it feeling-induced or rule-based are often the reason for future regrets. This holds true for any judgement call in one’s life, and investing is no exception. So, to be able to make better decisions you need better values that’ll help calibrate your choices and minimize your regrets.
What are authentic values and do you possess any of them? And if you do, how do you know they’re any good?
- A true embodiment of good value is one that’s powered by ethics – universal principles of good and bad. Your authentic values are ones that run deep within, they reflect what you truly care about, what makes you tick, and what you stand for. They’re like your inner GPS, helping you navigate through the ups and downs of life. Ultimately, they’re the reasons fuelling your choices and keeping you on track towards what really matters to you.
- One way to discover your authentic values is to think of decisions you’d make in paradoxical situations. Money-related decisions frequently present such dilemmas. For instance, what would lead your decision between a steady modest job and a challenging role as a co-founder in a start-up? Or think of a choice to be made between an overseas career prospect and the need to live by your aging parents?
- Your choices under such circumstances will reflect some of the overarching authentic values that govern your decisions & outlook towards life. These decisions & more importantly the resultant actions in some of your personal, emotional, and social situations can serve as good starting point in acquainting yourself with your own authentic personal values. Do not judge your choices as right or wrong. These values lack templates, they’re highly abstract, and not easily relatable. Yet, they hold meaning and significantly minimize your individual future regrets.
Side note: In your daily life, you constantly face situations that demand you to make decisions. However, to acquaint with your core authentic values, you must look past situations that involves trivial decision-making – be it food (e.g. Chinese or Mexican?) or holidays (e.g. Domestic or Overseas?) or even macro-level investment choices (like fixed deposits or mutual funds?). These decisions are predominantly feeling induced or transactional with either low or no consequence. Your guiding principles (of what you live by) shines through subtly but remain pronounced during times when choices could be life-altering or irrevocable.
When trying to clarify your values begin with honesty (probably one of the most revered values)
- The consequences of decisions driven by feeling-induced values like greed, desire, fear and agony are widely documented in investing. However, even rule-based value decisions that lead to undesired outcomes can evoke regret alike potentially impacting future investment behaviour. Even if you dabble in reasonably small amounts in day-trading (of stocks) you do so as a bargain for high returns. You convince yourself to believe there’re rules to the game and that you simply need to play by them for a reward – this is nothing but gross overestimation with limited control and high stakes that more often than not result in poor outcomes. Ultimately, it’s decisions driven by your core values that effectively become the barometer by which you draw satisfaction and define success. It’s hard enough that these values are abstract, so how then do you determine if they’re good? It’s time to dig deep and seek the “why” behind your values.
- Evidently, good values foster growth while bad ones lead to remorse. While this is factually true, you often trick yourself into believing otherwise.
- If you harbour patience, you’ll restrain from reacting to situations. In moments of uncertainty, you’ll trust not because it’s safe or certain but because you’re willing to take the risks. Good authentic values when nurtured and upheld remain unaffected by outcomes or emotions. Put another way, your decisions won’t be induced by feelings or directed by rules. If you value discipline, you’ll prioritize your time and remain consistent in all your efforts, regardless.
- If you haven’t figured already, your values aren’t truly reflective in your choices until you put them into action. This is also one of the reasons why the biggest regrets tend to be actions not taken since what you think you valued, didn’t transpire into action. You probably don’t foster creativity and revere independence as much as you think you do if it’s 7 years later and you’re still contemplating quitting your job to become an entrepreneur.
- This conceptually applies to investing too. If competence & efficiency is your thing then choose mutual funds over stocks. If simplification and flexibility are values you associate yourself with then prioritize financial over fixed assets (flats and plots of land). Your values reflect more in your actions than your thoughts which is why you’ve got to walk the talk. You’ve got to live out your values.
“How much money can I lose? Is not merely a financial question. If I make this choice: - How much time could I lose? How much sanity could I lose? How much reputation could I lose? How much happiness could I lose? Opportunity cost is about a lot more than money.”
- James Clear
- Research suggests that our emotional and psychological being depends on our value structure.
- While choosing amongst options, you’re filtering your values and building your own value hierarchy one decision at a time. Despite best efforts some of your values may fail you and that’s alright. Failing is normal and a better teacher than Success. If a value fails you, recognize its shortcomings and move on to adopt better values. Ultimately, every value, has its limitations and we often don’t know what we value until we live out a contrary value and fail at it.
- When you take a step back to observe your own past actions, there’d be times when your decision wasn’t backed by the right values yet they’d have produced desirable outcomes and the same is true for good value-laden decisions that may’ve ended up with bad outcomes. Nursing a regret due to unfavourable outcome will only mean you adopted a value based on bargain i.e., the odds stacked-up against you.
- Therefore, it’s not so much about adopting the right values, as much as adopting the process of being able to learn from the ones that fail you. Update your values so they become relevant to your decisions from time-to-time. Recognizing this is half the battle won in your attempt to live out your true authentic personal values.
- Psychologists point out that verbalizing your values can significantly help you think more clearly. As your guide, we’re always listening to help you reflect, recognize, assess, and live out your core personal values. In our guided assistance to investing, we’ll hand hold you through your dilemmas so you can recognize and adopt your true values and take necessary action too.
- Note: Here’s a handy guide to make better choices for trivial decisions. Use the framework for critical decision-making.
- Observe your thoughts that lead to choices during decision-making.
- Distance yourself from these thoughts and look at them objectively (difficult at first but practice periodically to get better).
- Do not judge your thoughts, at first instead sleep over it.
- Guage the consequence of your choice – in short, medium and long term. If you’re likely to feel differently overtime, reconsider.
- Take the time out to exercise your options – If the decision is not permanent, move fast & if it’s irrevocable, move slow.
- Seek out diverse perspectives (both good and bad). Weigh in on estimates and look out for exceptions.
- Examine the best and the worst-case scenarios. Now, multiply them and question if it’s still worth going for?
- Examine the best and the worst-case scenarios. Now, multiply them and question if it’s still worth going for?
- Last but not the least, acknowledge and appreciate factors (such as luck) that can come in to play which are beyond your control.
