How to: make better financial decisions
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Why is making better financial decisions important?
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Please remember that all of the information in this podcast episode is limited to general information only. That means the information is not specific to you, your needs, goals, or objectives. So you should seek the advice of a licensed and trusted financial professional before acting on the information. And before you acquire or apply for a financial product, please read the PDS or product disclosure statement, which should be available on the issuer's website.
What is 'resulting' and how does it affect decision-making?
Lastly, please keep in mind that past performance is not indicative of future performance.
Kate, welcome to this episode of the Australian Finance Podcast.
It's good to be back, Owen.
It is indeed. We are talking about decision-making. I think it was a good decision that we did this today, although we are running out of time. We're actually recording two podcasts on this Thursday, so hopefully we don't rush this one because rushed decisions probably aren't a good thing, right?
No, no, sometimes, but not always.
No. So tell us, Kate, why are we talking about decision-making today?
Yeah, well, last year I read a new book called How to Decide by Annie Duke, and it really made me think, much more deeply about my own decision-making processes and why I believe it's so important to improve our own financial decision-making. And some of the financial decisions we make are going to be the biggest and most impactful decisions we make in our entire lives, along with maybe decisions like your career and your maybe when to start a family or anything like that. So I think it's really important that we actually spend a bit of time talking about improving our financial decision-making skills because I don't think that's something we talk about too often.
No, no. And as we're all about to find out, it's not as easy as this was the decision that I made. This was the outcome, which is what so many people do. They kind of just draw a straight line between what happened and assessing that result today. So it's a bit of an interesting one.
How can you build your own decision-making framework?
And I think it applies, and there are many examples, it applies to investing. And we'll see as we go through, I'll provide some ideas around how you can think about this and some of the ways that you can make better decisions when it comes to investing your money. And then you'll talk about some of the ways we think about it in a personal finance context too. So one of the things that was made really apparent from Annie Duke's book was this idea called resulting. Do you want to explain what that means?
Yeah, absolutely. So Annie talks about resulting as in when you make a decision, you often evaluate the quality of the decision based on the outcome.
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Chapters
8 chapters
1
Why is making better financial decisions important?
0:00–1:51
2
What is 'resulting' and how does it affect decision-making?
1:51–3:33
3
How can you build your own decision-making framework?
3:33–5:37
4
What are common pitfalls in financial decision-making?
5:37–7:07
5
How can analysis paralysis impact your financial choices?
7:07–9:40
6
What steps can you take to improve your financial decisions?
9:40–11:16
7
How do you evaluate the outcomes of your financial decisions?
11:16–13:19
8
What practical tips can help in making better financial choices?
13:19–33:04
Speakers
2 identifiedMore from Australian Finance Podcast
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