How do you make good decisions? What are the key components? The answer to these questions, of course, is important. After all, the quality of your decisions can make or break your life. That’s why we should strive to improve the quality of our decisions.
I’ve written about some aspects of decision making before, such as probabilistic thinking and risk management. This time, I’d like to share my thoughts on what I believe are the two key components of making good decisions: clarity and information.
You see, a good decision has two characteristics:
- It takes you to the place you want, and
- It gets you there in an efficient way.
This is where clarity and information come into play. Clarity takes you to the place you want, while information gets you there in an efficient way.
You might think that the role of clarity here is trivial. After all, don’t we all know what we want? But it’s not that simple. Why? Because we could choose the wrong proxy for what we actually want.
For example, everyone wants happiness. But how do you get happiness? Well, you need to choose a proxy because happiness itself is too abstract. You need to have something more concrete to aim for. Some people choose wealth as their proxy for happiness. Some others choose fame. Clarity helps you choose the right proxy for what you actually want. Without clarity, you could spend years chasing the wrong proxy and end up somewhere you don’t want to be.
In addition to clarity, you need information. Information has two roles:
- It shows you the options that you could take, and
- It helps you assess those options to choose the best one.
Without good information, you could miss an option altogether because you don’t even know that it exists. In addition, you might not be able to compare one option with another. Better information gives you better options and the ability to select the best one among them. This is how you get to your destination efficiently. You won’t waste your resources (time, money, and energy) to get there.
So those are the two key components of making good decisions: clarity and information. Make sure that you have both of them when you make your decisions.
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