Making complex decisions under stress? How to avoid a mess

 

Most of us have experienced the uncomfortable stress of having to make a complex decision with a level of uncertainty. In our world, we assist people virtually every day with complex decisions of the financial kind – where a wrong move could cost tens if not hundreds of thousands of dollars.

Have you had this type of experience? Maybe you have bought an investment that hasn't performed as expected, perhaps you missed an opportunity to do more with your money, or maybe you have a mortgage that won't reduce quickly enough for your liking. Each of us will have a different experience and response - how did your experience make you feel?

If you're like most people, the lack of certainty around the likely outcomes of an important financial decision is a source of significant stress.

 

Many of us rely on guesswork or gut instinct. We usually know it won't guarantee positive results, but we just don't have the time or the tools to do anything else. Yet guessing could prevent you from achieving personal and financial goals that could be well within your reach. 

In fact, recent psychological research shows that stress makes our financial decision-making even worse - under stressful conditions, we fall back on automatic, lower-level thought processes and are less able to use more rational and deliberative thinking to assist in decision-making.

According to Sydney-based psychologist and Director of Pax Leader Labs, Louise Metcalf, when we are overwhelmed with complexity we experience heightened anxiety and the brain’s response to that is to limit the information entering the conscious mind. So we literally shut down avenues of thought and we ask less questions. This usually causes us to make more errors.

Which, when you’re dealing with money is not a good thing.

Perhaps try this exercise. Think about your life now. Do you have a financial or personal decision you need to make? How would you rate your level of stress? Now consider how confident - or not - you feel about making the right decision?

Now roll forward and imagine that you've resolved the issue, you've made the right decision and life is good. How do you feel now? If you're like most people, the thoughts that come to mind are words like "great", "relieved", "happy". 

 

In financial decision-making, rational and deliberative thinking is essential. To provide this type of objective, structured framework most people find that all they need is some level of expert help - whether it's simply a sounding board or tailored assistance to develop sound strategies and put them into place. 

Perhaps these comments from some of our clients will strike a chord with you?

"I understand the numbers, and I currently run spreadsheets for most things. But when it comes to more complex decisions like do we keep or sell our investment property, I simply don't have the time to work that out" - Senior Manager, Financial Services

 

"I love my work, I'm very much a career person. I don't love finances, and I want to outsource my financial management to someone that does" - Partner, Law Firm

"I'm guessing that we've been losing around $100k a year because we haven't been structured about managing the money that we earn or our other assets. That's why we're engaging you - and we're doing it now, before it's too late"- Management consultant

Whether you want access to tax and investment strategies, clarity on the financial implications of different decision choices, or just an enhanced level of comfort that you'll have enough money to live comfortably, maybe it's time to do something.

As Shakespeare's King Lear says "nothing will come of nothing".  So if you're ready to shift from where you are to where you want to be, why not get started?

 

We look forward to hearing from you.