Flipping The Coin: Questions To Answer When Making Decisions

 

Let’s flip a coin, well that’s like the ultimate decision maker for a whole lot of us. Making decisions is a big part of living because we even decide whether to live or not.

Decisions are just choosing between two options of same capacity, especially when we have the capacity to have the two.

Being stuck in the middle of it is quite common. So when you don’t have a coin to flip, maybe you could count cost, or consider how good one choice would over the other.

It may seem like a herculean thing to do but the great side is that you don’t take a decision out of spontaneity. It means you get the chance to properly evaluate cost and benefits and take the best choice of it all.

Maybe you could get to answer some questions before you take that big decision: getting a higher degree or getting a job, buying a car or a house, taking a vacation or investing on a property.

What Are The Objectives

First and foremost, identify the objectives for flipping a coin. What would you like to achieve by establishing the different objectives, is it to solve a problem or to ease up on some tight situation?

What Is The Opportunity Cost Of Both Choices?

What will you forgo to have that particular need met. In high school economics, we were taught that opportunity cost is the choice forgone in preference to another.

Decisions could take a lot to make, when you are stuck in between two things, weigh what you may have to forgo to have either of it.

For example, getting a masters instead of working on a job may mean you will have to live on a tight budget. This implies that you may forgo many luxuries which you would ordinarily have desired in lieu of getting a more attractive curriculum vitae.

What Are The Costs And Benefits?

If two choices are tough to pick through, looking through the cost and benefits could do a great deal. Narrow your options down by removing the least likely choices. Then seek for tangible reasons to opt for the either of the remaining options.

If the options are buying a car or a house, the cost of a car may be less than that of a house but a car gives you the benefit of mobility while a house saves you subsequent rent payment.

Suppose the options are going for a vacation or investing on a property. Vacations are wonderful, you loosen up, relax, have a nice time and come back refreshed while investing on a property or in stocks may not yield dividend at same time, so you should answer further questions like:

Would The Choice Appreciate Or Depreciate Over The Years?

Not every choice looks either good or bad at first. It all takes time to show the full effect of choices. Decisions can either make you feel better or get you soaked in a puddle.

Checking how a decision is going to affect your future may help you not to get entangled in the bad one. Once more, I’ll refer to the example of a house and a car.

A car depreciates with usage, so much that you may not sell  a two year old car for the same amount you could sell a six month old one. Although having a car promises great benefit, it doesn’t have the capacity to fetch you a good bailout if you should run bankrupt. Giving this a thought may save one from some future stress.

On the contrary, a house can be a lifesaver on a rainy day when because it appreciates So one big question to answer is “can the asset be liquidated when necessary to give a high return in investment?”

Does It Have A Alternative?

Listing out the alternatives of both choices helps to determine which is urgent, important or absolutely necessary.

Instead of getting a car, will a taxi or carpool serve your mobility needs for some time? If your alternatives are workable, you can actually go with the alternative while you make a more pressing decision. But before taking the alternative, check it against the objectives.

Carpooling may be a nice idea but it may not give you the flexibility of working according to your schedules.

Can You Afford It?

Practically, what influences most of the things we choose and do is whether we have the purchasing power, resources or guts to make it come true. Resources include time, money or whatever one needs to get something done.

Getting a job as opposed to a masters degree may be a great idea, but will it you give you the time to work on the two effectively? So if you get stuck in a situation like this, go back to the first question, list the objectives.

And when you are done, just get it going, start doing it. A decision is not one if it is not implemented, it will just be a thought, so get going and if it knots up again, redo the test.

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