Accounting for Law
Estates & Wills & Trusts

Make it your year for ‘best picture’ critical thinking

By Ian Hull

Do you ever wonder how your emotions impact your decision-making? Or more specifically, how many sub-optimal decisions you make based on emotion?

We get caught up in the hype, or succumb to an emotional appeal, or bring our business to someone we like rather than someone who can get the job done. It’s easy to have happen, and it happens to many of us quite often.

A high-profile example? The Academy Awards each year. You’d think that 6,000 people would select “best pictures” that are regarded as a high artistic achievement for years to come. But in fact, emotion, hype and other factors often come into play. As a result, many past winners of best picture are quickly forgotten, while many non-winners become timeless classics.

See for yourself — don’t you agree?

So how can you make “best picture” decisions in your life — those decisions where you look back five years later and say “yup, that was a great move.” These can be especially important for estate and financial management matters where the bottom line is usually what matters.

The key is to take emotions (that sales guy is nice) and extraneous factors (I’ve always banked here) out of the equation and use your critical thinking to decide. Here are three areas you might want to review:

  • Investment fees: High fees can be justified by high performance, but are you getting value for the thousands of dollars you spend in management fees each year? The tough part is that there’s often a personal advisor relationship at stake. But it’s your money: take a good hard look and decide.
  • Banking: We’re sometimes proud of the long-term banking relationships we have, but pride is not a great emotion for financial decision-making. Just because your bank was great when it gave you a law school loan when you were 23 doesn’t mean it’s providing great value today. Yes, it’s a hassle to switch, but a review every few years can ensure you’re still getting “best picture” service and value.
  • Service providers: The house cleaning person, the dog walker, the cottage checker, the tutor for your children – there are definitely great ones out there. But are you getting the best? Use your critical thinking – not your emotions – to make any changes you need to.

For a broader view of emotion and financial decision-making, this article describes the issues well, with some tips on making better decisions.

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