Don’t Regret It
Don’t Regret It
Adam M. Grossman | Mar 26, 2023 Humble Dollar
I SPOKE RECENTLY with a fellow who had climbed Mount Everest. The first question I asked: What was it like at the top?
What I expected him to say was that the view was dramatic. Instead, he said, his time at the summit turned out to be less than he’d expected. For starters, it was 4:45 a.m., so there wasn’t a lot of visibility. In addition, it was minus 45 degrees. Because of that, he didn’t want to stay too long. Reaching the summit, it turned out, wasn’t the most memorable or the most enjoyable part of the trip.
This got me thinking about the topic of regret. When it comes to personal finance, there’s the standard type of regret that’s well understood: not saving enough, or spending too much, or taking an unnecessary risk. With mistakes like these, it’s natural to feel regret—because they’re mostly within our control and the results are predictable. In such cases, we might genuinely wish we’d done something differently.
But this fellow’s Everest experience fits into a different category. Though it didn’t turn out as he’d expected, he certainly doesn’t regret it. In fact, he’d gladly do it again. This highlights a reality about decision making: Sometimes, things don’t turn out as expected—but through no fault of our own. In other words, even with the benefit of hindsight, we don’t regret decisions of this sort because, despite the disappointing results, they were still reasonable choices and could easily have turned out differently.
What sorts of financial decisions fit in this category? Many have started new jobs, or even new careers, that turned out to be disappointments. In other cases, maybe a move to a new home or a new city fell short. In all of these cases, it wasn’t because we failed to do our homework. Things just didn’t work out as expected for reasons beyond our control.
The world of personal finance is full of unknowns, which means that many—if not most—decisions are susceptible to this phenomenon. But that doesn’t mean things are completely out of our control. Even without the benefit of a crystal ball, certain decision-making strategies can help tip the results in our favor. Here are five I recommend:
Tet the waters. When I was in school, I had a professor who grew up in New Zealand. Near his home, he said, there was a river that was a popular spot for swimming. The problem, though, was that sometimes a nasty type of biting fish might be in the area. Some of the more reckless kids would still just jump in, hoping for the best. Sometimes, they got lucky—but sometimes not. The smarter approach was to take a half-step into the water to assess.
In his field, marketing, this approach made a lot of sense. But for a long time, I wasn’t sure whether this philosophy would apply to personal finance, where many decisions tend to be irrevocable. Recently, though, I caught up with an old friend who told me this story: After his youngest child started college, he and his wife sold their house. They no longer needed such a large home. They then gave themselves two years to decide where to move.
One idea was Florida, but they weren’t sure, so they took six weeks over the winter to do some research. They started in Miami, then moved up the coast, town by town, spending a few days in each community. By the end of the trip, they’d collected a good amount of data and had largely made up their minds. The lesson: Even when it doesn’t seem like it might be possible, look for ways to test the waters on financial decisions. It might carry a cost, but it could be well worth it.
Split the difference.
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