An unsettled mind will not make good decisions.

— Warren Buffett, 2017 Letter to Shareholders

Don’t Panic

You are ten years old. You are at your friend’s pool party.

You announce to everyone that you can touch the bottom of the pool, even though it’s 9-feet deep.

You touch it.

On the way to the surface, you know that by the time you dry off, you will be the talk of the party — Can you believe he touched the bottom? — when suddenly, instead of getting that fresh hit of oxygen, you are trapped under a giant giraffe pool float.

You know the scene. Arms flailing. The water looks like the opening scene of Jaws as you struggle to get some air.

Here is the thing we all know: The flailing doesn’t help. It never helps. In fact, it wastes energy and oxygen.

Ideally, we would calmly assess the situation, “Oh, there is an unexpected float here instead of air,” and adapt to it. “I need to swim down and try to come up somewhere else.”

We don’t do that.

Why? Because it is a fundamental biological response. It takes a remarkable amount of concentration, training, and effort to overcome any “natural” or conditioned response.

Emotion is an instinctive response aimed at self-preservation.

It involves numerous bodily changes that are preparations for action. The nervous system fires more energetically, the blood changes its chemistry so that it can coagulate more rapidly, muscle tone alters, digestion stops, and various chemicals flood the body to put it in a state of high readiness for whatever needs to be done. All of that happens outside of conscious control.

Reason is tentative, slow, and fallible, while emotion is sure, quick, and unhesitating. 

― Laurence Gonzales, Deep Survival (p. 31)

No one would ever blame you for panicking. Sure, it would have been better if you were prepared and had more control, but you were scared.

This is a goofy example to make a critical point: Panicking is never helpful. But, simply saying Don’t Panic is like saying Don’t be Hungry.

We have to prepare ourselves. To invert the Cialis slogan: When the moment is wrong, will you be ready?

Life Under The Pool Float

The first rule is: Face reality. Good survivors aren’t immune to fear. They know what’s happening, and it does “scare the living shit out of” them.

It’s all a question of what you do next. 

― Laurence Gonzales, Deep Survival (p. 27)

Life has a way of throwing us under the pool float.

Making an “emotional” decision has a negative connotation because it is associated with impulsion, irrationality, and regret. This is the context we will focus on, but there are obviously healthy emotions.

Emotions are linked to every thought we have and thing we do.

So, a better way of looking at it is: Every decision is an emotional decision. Almost all of them are more subtle than bumping into a real pool float.

What we want to do then, is manage emotions, not eliminate them.

The pool float is a vivid and useful metaphor for all emotional situations and decisions.

Stress…Invisible Panicking

Another name for the metaphorical pool float we bump into is stress. We often fail to recognize that we are stressed or panicking until after we do something, when it is too late.

Whether it is buying an overpriced house you fell in love with, but cannot afford, getting pissed off and saying something you don’t mean, or eating the whole pint of Jeni’s Splendid Ice Cream.

It is that momentary and often fleeting realization that we messed up our original plan.

Shooting the Arrow, Then Painting the Target

Nothing in life is as important as you think it is, while you are thinking about it.

― Daniel Kahneman, Thinking, Fast and Slow

I can count on one hand the number of people I know that consistently make rational, unemotional decisions in emotional situations.

One of the main reasons for this is: You are a persuasive storyteller.

Your family and friends will listen to you. “You will live in that house forever, he deserved it, Jeni’s is so good, I would have eaten two pints.”

You will feel better about any choice you make, especially bad choices. Why? Because we are kings and queens of rationalization.

See for yourself. Pick someone you know that has made horrid decisions and ask him what he would change.

Most people are going to say some version of, “I don’t regret anything because it made me who I am,” while you are scratching your head wondering who would want to be like him. We want to avoid this trap and being that person.

We like the ability to wiggle out of commitments and promises. That is why contracts and courts exist. But, there are no courts to deal with yourself.

You are the plaintiff, defendant, judge and jury. This type of power sometimes means letting yourself off the hook.

Everyone likes to shoot the arrow and then paint the target around it.

Big Time Decision

The first time under any new pool float is unexpected and unsettling. It may be so unsettling, that once it is over, we never want to think about it again. Just tuck it away and forget about it.

There is a big problem with this. It allows us to displace the responsibility, so we feel no need to change. Therefore, if we end up in similar situations, we will predictably react the same way.

This happens enough to call it the default response.

“Ugh, I don’t know what I was thinking…it was an emotional decision. Whew, now I can feel better. It wasn’t ME who made the decision, but the emotional part of me, and we can all be emotional.”

It sucks to feel like I made a bad decision. Doing the work to make good decisions is hard and takes a lot of time. The easier option is to simply convince myself that it wasn’t a bad decision.

Even when we’re told, even if we understand it at an intellectual level, most of us don’t embrace the facts in that emotional way that controls behavior.

― Laurence Gonzales, Deep Survival (p. 133)

The most important part of emotional decisions is the decision you make before you are in emotional situations: Do you want to feel better about your choices or do you want to make the best choices?

The deeper question is: Do you want to be a better version of yourself?

One of the reasons there is such a disparity between different people’s outcomes in life is because as Aristotle reminds us, we are what we repeatedly do. Therefore, excellence is a habit.

If someone makes 100 hard, uncomfortable, but superior decisions to someone else, it is likely because he made it a habit.

In doing so, he will be significantly better off than someone that took the easy way out.

What to Do?

By the end of the day, you will see an ad promising you a shortcut to something you want, and it is tempting because we as a culture want things fast.

Training for anything is a big undertaking. Training your emotions and intuition is a lifelong undertaking.

Below are some things to try, a real life case study of your author working through an emotional decision, and additional frameworks for thinking about these things.

Think about “emotional” decisions on a scale of 1-100.

Survival in the pool being close to 100, and being tempted by an M&M on the table as a 3.

If you can reduce the impact of your emotions on your cognition by even a little bit ― for instance, making the pool a 94 instead of 100 and the M&M a 1 instead of a 3 ― by doing the things below, you will be a better version of yourself.

  • The time to make “emotional” decisions is when there is no pressure or time constraint.
    • You should be TREMENDOUSLY emotional when you are forming your wants. When you are deciding what is important to you , you can have any emotion you want. The stronger the emotion the better. This is what makes us human.
    • Contrast this with being at a closing table. Someone changes the deal on you or discloses something important at the last moment. This bait-and-switch tactic works precisely because people get emotionally invested in the outcome. You may tolerate the change because you want the deal to happen. This is one of the most valuable emotional decisions to control. If someone does this to you, tell him it is on the original terms or walk away. If not, you never had the deal you thought you had.
  • Have the courage to label Bad Decisions.
    • Paint the target before shooting the arrow. It is liberating to acknowledge a terrible mistake, because you can begin to move on.
    • In other words, be honest with yourself. This is one of the hardest things to do in the world, so if you aren’t already honest with yourself, reading that sentence a few times is not going to change your behavior. Maybe bumping into the pool float enough times will.
  • Learn from bad Pool Float experiences.
    • Experience without reflection is overrated. Some people go their whole lives not learning anything from experience and continue bumping into the same pool floats and reacting the same way.
    • By reflecting on situations where you wish you would have reacted differently, the next time you encounter a similar situation, you will more likely react the way you want to.
  • Identify the source of the emotion.
    • Listen to your body. Begin trying to catch these things as they are happening. “I am being mean. Is it because I am hangry?”
    • “Don’t take stress home with you,” is a cliché because it is hard to do. If people focused on the source of their emotion and labeled it ―”Wow, I am really pissed off at so and so at work” ― they can find a healthier outlet than taking it out on loved ones.
  • Be impulsive and irrational when the stakes are low. Be rational when the stakes are high.
    • If we must be imperfect, let’s be irrational when the stakes are low and conserve our energy for when the stakes are high.
  • Stack the odds in your favor.
    • If an unsettled mind will not make good decisions, then a settled mind will.
    • Put yourself in relaxing environments and moods before making big decisions.
    • Yoga, meditation, exercising, and reading Stoic philosophy are all beneficial to your temperament.
    • I use a Decision Journal for financial decisions.
      • I simply write down why I am doing what I am doing, how I feel. Why am I doing this? How did I sleep the night before? How do I feel right now? I often say: Think about how differently you feel while sitting in rush hour traffic compared to after a massage.
  • Slow down. Step out of the situation.
    • Big financial decisions. Can you wait 30 days before making the decision? Will you wait 30 days before making the decision? Many people will say, “Of course I could, but I don’t need to do that. I just want it now.”
    • Any time you feel the urge to do something quickly, your emotions are likely taking over.
    • Tense conversations. Ask for a moment to take a breath. See Blackstone founder Steve Schwarzman’s quote below.

When I started in finance, I was ill prepared for the stress of the work. Every point in every negotiation was a fight, with a winner and a loser. People in this business weren’t interested in carving up the pie so everyone got a slice. They wanted the whole pie for themselves. I observed that when I was the one making the decisions and the voices rose and tempers flared, my heart would beat faster and my breathing would become more shallow. I became less effective, less in control of my own cognitive responses. 

The fix, I found, was to focus on my breathing, slow it down and relax my shoulders, until my breaths were long and deep. The effect was astonishing. My thoughts became clearer. I became more objective and rational about the situation at hand, about what I needed to do to win. 

― Stephen Schwarzman, What It Takes (p. 69)

Appendix

1. Case Study (Car)

There is nothing like a real life case study.

I bought a new car in 2014, which has low-profile run-flat tires. Run-flat tires are rigid and absorb very little shock. If you hit something hard enough, instead of popping, they get a bubble in the side (which means you have to replace them) and/or the rim absorbs the shock.

If you have good roads, they are the best tires. If you live somewhere with awful roads, like Dallas or Baltimore, they are the worst tires.

I have replaced 8 tires and 3 rims at $250/tire & $400-$600/rim.

You can imagine the frustration. The wasted time and stress is at least as irritating as the financial part.

Out of curiosity and during standard maintenance, I would ask about my car. Technicians from multiple repair shops and friends in the industry said many foreign cars like mine start having major maintenance issues after 100,000 miles (i.e. things that could cost thousands of dollars).

I was at 91,000 miles, so not urgent, but definitely something to consider.

My car is probably worth $15,000 right now.

Interest rates on new cars are about 2.00%.

Let’s assume that a new car is at least $60,000 and the monthly payment is roughly $800 (actual dollar amounts are mostly irrelevant).

Sure, I want a new car because I got it in my head that I kind of want one. New cars are fun, even if you’re not a big car person. Plus, I have some good reasons.

But, from a purely rational and financial perspective, it’s not time.

Even if I popped a tire a month, it doesn’t make financial sense.

Until the depreciation + maintenance is more than the cost (e.g. $800/month), then financially it makes sense to keep my existing car.

Will I wait that long? Of course not, because I want a new car.

2. Why Did That Behavior Occur? (YouTube Summary of Sapolsky’s Theory)
  • One second before: What went on in his brain? 
  • Seconds to minutes before: What environmental stimuli influenced his brain?
  • Hours to days before: What hormones sensitized him to those stimuli? 
  • Weeks to months before: How did experience reshape how his brain responded to those forces?
  • Back to adolescence: How did that immature frontal cortex shape the adult he became?
  • Back to childhood and fetal life: How did early life experiences cause lifelong changes in brain function and gene expression?
  • Back to fertilized egg: What genes coded for those hormones, neurotransmitters, etc.? 
  • Decades to millennia before: How did culture shape the social environment in which he lives, and how did ecological factors shape his culture?
  • Millions of years back: How did the behavior evolve? 
See also

Thanks to James Bunch for reading drafts of this.