Most people focus too much on how to get ahead by making the right decisions. In a world where most businesses go under and most investors trail an index fund, an obsession with how to not fail can be a more effective mind-set. Doing so requires knowing the behaviors that are likely to cause failure. Here's a checklist of bad decisions I've witness over the years.
- Always remember: Success is due to your intelligence and effort. Failure is due to the political party you didn't vote for.
- View "changing your mind" as a character flaw and something to be avoided.
- Associate complexity with added value.
- Surround yourself with people who agree with you or are too afraid to tell you you're wrong.
- Treat information that goes against what you believe as an attack on your intelligence.
- Seek the council of people working on commission.
- Accept past correlations as a clean prediction of the future.
- Compete on cost rather than service.
- Prioritize in this order: Quarterly results, annual results, long-term results, and -- if there's anything left over -- reputation.
- Develop strong opinions for things you have no personal experience in.
- Study the habits of successful people. Ignore habits which require serious, time-consuming and mentally exhausting effort. Double down on those which mimic your current hobbies.
- Use current popular sentiment to gauge future outcomes, especially when it's highly emotional.
- Dream big. About your future paycheck. Don't let the intervening effort or social sacrifices required to get there become part of the story.
- Expect to achieve overnight what successful people took decades to accomplish.
- Leverage up to the point of needing your forecasts to be accurate in order to survive.
- Focus heavily on analytical ability, discounting common sense as too simple-minded.
- Treat employees as workers rather than people.
- Always ask, "How can I achieve the same investment returns they did, but faster?"
- Consider your last day of college the last day you need to study and learn.
- When you win, adjust your expectations upward by the same amount, ensuring that your ability to feel the joy of progress takes the form of a treadmill.
- Risk what you and your family rely on for a chance at something superficial and unnecessary.
- Since failure is not an option, discount contingency plans.
- Be genuinely surprised at the occurrence of recessions and bear markets.
- Consider a degree from a prestigious school as an entitlement to success.
- Look for patterns in complex adaptive systems, like the economy and stock market.
- Get tired of being patient.
Check those boxes and you'll be disappointing in no time.
- Why does pessimism sound so smart?
- 50 unfortunate truths
- Iron rules of money
- The upside of being miserable
This article is part of Motley Fool Mindset, an exclusive behavioral-finance service in Motley Fool One. Click here for more.