Thinking in Bets: Make Smarter Decisions When You Don’t Have All the Facts
By: Roccy DeFranceso, JD, CAPP, CMP
I recently wrote a 3-part newsletter series for users of the OnPointe E-Newsletter System on Loss Aversion Bias, Confirmation Bias, and Recency Bias. It’s a really interesting newsletter series that can be good for clients and their advisors.
To read my 3-newsletter series, click on the following link: https://advisorshare.com/biases
We Should Never Stop Learning
I recently read a book I found so fascinating and helpful that I wanted to make readers aware of it. Annie Duke is a world renowned poker player who wrote the following book (it’s on Amazon):
Why read this book?
Think about how similar poker is to financial planning. Poker players make decisions and advisors make recommendations without knowing key information:
- We don’t know what interest rates will look like in 5, 10, 20 years.
- We don’t know how interest rates will affect caps and par rates for IULs and FIAs.
- We don’t know when the next COVID-19 pandemic will hit.
- We don’t know if unemployment is going to be up or down.
- We don’t know if there will be another .com bubble.
The book was so good that I marked no less than 30 sections I wanted to go back and re-read.
Making Better Decisions
The following image shows what we and our clients should all strive for (un-biased reasoning and good outcomes). It doesn’t always happen, but your odds will increase if we can set aside our biases when making decisions.
One way Annie’s book helps readers is by giving very specific drills we can all do to become more self-aware and make better decisions.
This book is great for clients
While I think many of my books are terrific reads for clients (especially Bad Advisors: How to Identify Them; How to Avoid Them…click here to download it for FREE!), Annie’s book is one you should consider giving to clients or recommend that they buy it.
It will help clients become more aware of their own biases when it comes to decisions they make about their money.
They may read the book and come to the conclusion that they have a pre-built bias against cash value life, annuities, stocks, mutual funds, using niche 3rd party managers, AI based investments, etc.
Readers will become more open to learning about wealth-building tools they have chosen not to use in the past or have not been introduced to.
The bottom line…
You can’t go wrong with reading Annie’s book. I guarantee you it will help you make better decisions in your personal life as well as business life.
And if clients read it, they will be more open to talking with you about what you believe are the best ways to grow their wealth for and in retirement.