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Personal Finance FAQ

A Handful of Decisions Will Shape Your Entire Life

My decision making skills are as good as a squirrel that’s crossing the street.
–Anonymous

If you ask most people, they can point to a handful of decisions that have truly shaped where they are today. For me, I can point to:

  • Deciding to go to West Point. Early in my senior year, my Dad called me into the bedroom to tell me that I either needed to get a scholarship for a full ride (including room and board) or I’d have to pay for college on my own. Given that he was a state patrolman and my mother was a teacher, this revelation should have been unsurprising (want to save for your kids’ college? Check out Kids – Raising Them, Feeding Them, and Educating Them). Dad suggested I look at military academies. A year later, I was off for USMA.
  • Deciding to get out of the Army. Originally, I was a tanker who was going to go military intelligence after my first four years in the Army. The Army had a program where they wanted officers who were in support roles to have served in combat arms roles. I figured my mindset was better suited to intelligence (which makes me think “Bad I.N.T.E.L.L.I.G.E.N.C.E. from Team America World Police (#aff)). I also thought I’d wind up being a Foreign Affairs Officer given that I’d been a German major and had a good degree of fluency in the language. However, that was to change in one defining moment. I was nominated to be an aide-de-camp to a brigadier general. This was usually a position that was a near guarantee of being fast-tracked in the Army. I showed up to the interview, and the first question he had for me was “Why didn’t your company commander write a letter of recommendation for you?” Despite being assured that it would be done (he was in Macedonia at the time, and I was in Germany)…I was blindsided. At that point, I figured an organization that subjected me to that experience wasn’t one I wanted to be part of. I knew the guy who wound up being selected, and, if I’m honest, looking back, I’m glad Matt got that role rather than me!
  • Deciding to go to Virginia for graduate school. I had a couple of choices, but I chose Virginia for a couple of pretty simplistic reasons: my grandparents were in Virginia, and it was much cheaper than some of my other alternatives. Had I chosen to go to a California-based graduate school, given my tech leanings, I could have potentially pursued a very different path.
  • Getting married to whom I did when I did. Hey, you can’t help with whom you fall in love, right? I turned out to have had my luck box going quite well during that time, as I documented in Why an Awesome Spouse Helps You in Personal Finance and Life.
  • Joining Capital One after business school. I had a bunch of interviews lined up in the winter of my first year of business school. The first one was with Booz, Allen, and Hamilton’s consulting firm. I didn’t get an offer from them. The second was with Capital One. I did get an offer from them, and I stopped interviewing. Who knows what sort of careers the subsequent interviews would have yielded. After all, I was a former Army officer with no civilian business experience, so the world should have (could have?) been my oyster in terms of discovering what it was that I truly wanted to do. I had a great internship with them, which led to a job offer, but by the time I joined, there was no role where I had interned, and HR was left trying to figure out what to do with me, leading to a very imperfect fit between me and my role. This led to…
  • Starting a company. The entrepreneurship bug had bitten me hard in business school. I didn’t think I was ready to pursue entrepreneurship right out of business school, because I was green and naive. After a year and a half, I was impatient and student loan free. So, I jumped. Several years, an exit, and a couple of start-ups later, we made the…
  • Decision to FIRE (financial independence retire early). While my wife and I both had solid positions and incomes, we made the decision to pull the trigger on our FIRE plans (at least, for now).

Seven big decisions/turning points that I can point to that got us to where we are now.

I think I got them right. Who knows? It’s really difficult to provide a counterfactual of what could have been. What if I stayed in the Army? Would I have retired after 20 years? Been killed in action? I have no idea because I didn’t choose that path.

All I can say is that I’m happy with where things have turned out.

But, what led to those decisions and how they shaped me?

Some of them, I was playing defense, such as choosing a military academy because of free room and board. Some were playing offense, such as starting a company (I did it to make money, not change the world).

Is there a lesson to learn here, or is this just an autobiographical article?

How to Approach Potentially Life-Changing Decisions

It turns out that I’m not the only who has been contemplating how the approach to these decisions shapes what happens afterwards. Northern Arizona’s Jack Bauer (not to be confused with this Jack Bauer (#aff)), along with Northwestern University’s Dan McAdams and April Sakaeda evaluated how a person’s mindset beforehand affected their subsequent perception of life-changing decisions.

The perception of the positivity of the decisions hinged on two different crystallizations:

The Crystallization of Discontent

The crystallization of discontent is another take on loss aversion. To paraphrase Dave Ramsey, you have to get to a point where you are sick and tired of being sick and tired in order to impel yourself to change. This is driven by a view that bad days are going to turn into bad years and a bad life as long as the status quo is maintained. The mindset of

Anything has to be better than this

is what drives the desire to change.

The Crystallization of Desire

The crystallization of desire is a change of viewpoint about the future. People who have a crystallization of desire view the future as positive. They view the decisions that they make as helping them to achieve the positive vision of what the future can be rather than trying to avoid a bad outcome in the future. People who view themselves as experiencing self-growth and have a balance of more positive self-reflection than self reflection tend to have a crystallization of desire rather than a crystallization of discontent.

The two crystallizations are not ying and yang. One does not appear exclusively in the absence of the other. Most decisions that you make have an aspect of both.

How can you make sure that you make major decisions with the right mindset?

  • Know yourself. Introspection, meditation, and a bunch of other -tions. You need to know what your own values are and how they fit into the life that you want to lead.
  • Know what you want in the future. Try to focus on and understand what you want in your future. It is why you should retire to something rather than retire from something.
  • Think about the positive outcomes that your decision can lead to. A key to the crystallization of desire, which leads to people being happier with their life-changing decisions, is a positive future orientation. Therefore, thinking about how a decision can positively impact your future should lead you to being happier about the outcomes of the decisions you make.

How do you know that a decision you’re facing is one of the life-changing decisions? You can’t say with certainty. Yes, the mundane (what should I have for dinner tonight) probably are not going to materially change your life. You will have a good sense of the big decisions rather than the small decisions. That said, having a positive outlook and thinking about how your decisions can positively impact you will, over time, lead you to better decision making and happier outcomes.

What was your mindset when you made those big, life-changing decisions? Did they work out well? Let’s talk about it in the comments below!

By

Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

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