How to make important life decisions
The year is 1994. Jeff Bezos has a lucrative job at an investment firm called D.E Shaw.
But then he has this crazy idea to build an online bookstore and participate in this new thing called “the internet”.
A 30 year old Jeff has an important life decision to make. Either choose to have a stable career path or pursue his crazy startup idea.
We all know what he finally decided but do you know how he arrived at that decision?
He developed a decision making framework called the Regret Minimization Framework to make the decision that would change his life.
Regret minimization framework
The goal of this framework is to minimize the number of regrets you have in life.
Whenever you have to make a difficult decision, imagine yourself at 80 years old and ask yourself, will you regret not doing this?
And work backwards to guide your present decisions.
Most of our regrets are from the things we didn’t try, the risks we didn’t take, or the paths we didn’t travel.
Here’s the regret minimization framework in Jeff’s own words:
How to use this framework as a compass for making important life decisions:
- Project yourself forward into the future at age 80
- Look back on the decision you’re currently faced with
- Ask yourself, “Will I regret not doing this?”
- Take your decision accordingly
While this framework helps you optimize for long-term fulfilment, its larger horizon can be a roadblock for basing medium-term decisions, especially for people in their 20s and people who have a family to look after or have other responsibilities.
In such cases, there’s another mental model I like to use in conjunction with it. It’s called the Worst Case Scenario, developed by Ankur Warikoo.
Worst case scenario
Every important decision we make in life can have two outcomes – either it will work out or not.
Taking a decision in an ambiguous situation is hard. We do not know the possible outcome of our choices. Analyzing the worst case scenario helps us to decide better.
Ask yourself these three questions:
- What’s the worst thing that can happen if I move forward?
- What will be my financial situation?
- How will I feel physically, emotionally & mentally?
Write them down and reflect on it.
This framework helps you to prepare for the worst. If you’re okay despite the worst case scenario playing out in reality, go for it.
Here is a real-life example of this mental model, from Ankur himself.
From "5 months of cash" to $2Mn, in 18 months— Ankur Warikoo (@warikoo) December 31, 2021
The next time you’re faced with an important life decision, try to think using these frameworks to decide what’s best for you.
Our brains are not hard-wired to use these kind of frameworks but forcing yourself to think this way will give you better clarity of thought and eventually help you make better decisions.
Life is messy and these things are never perfect: you can win or fail. But if you can come to terms with the outcome, you can look back on your life from your deathbed with a beautiful smile on your face.
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Thank you for taking the time to read. If you liked this article, sharing it with a friend is really appreciated! :)
Thanks to Madhav for reviewing the draft of this article.