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Why Understanding Your Cognitive Biases Will Help Improve Your Life, Decisions and Relationships

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cognitive biases

When I started working in the financial markets, I was enamored with how the mind works.  More specifically, it was fascinating that almost everything I was taught in college about the markets was wrong. We rarely act as rational human beings. I saw this by studying history, watching my own actions, and the actions of others. I began to study psychology and behavioral economics.  

One of the subjects I spent a lot of time studying was cognitive biases and how they affect our thinking. These biases are not always bad but it is key to understand them to improve your own decision-making and to see other point of views.

Through my studies, I found that the 3 biases affecting people most are confirmation bias, recency bias, and the bandwagon effect:

1. Confirmation Bias

Confirmation bias is the tendency to find information that only confirms to our existing beliefs. This was very useful when we were roaming around as hunter-gatherers and worried about a wild animal eating us. In that time, it was best to err on the side of caution and assume that whatever was in the bushes might kill us.

However, in modern society, this can cause us to make plenty of wrong decisions.  Confirmation bias is is the antithesis of the scientific method. I suggest trying to falsify our existing beliefs by engaging with people on the opposing side. With so much available information on the internet, it is a shame people tend to sit in their filter bubbles. Whether that is political, religious, fitness, or nutrition, we need to be open to others opinions and be willing to respect their viewpoints.

I find that having my preconceived ideas challenged and being willing to change my mind leads to better decision making in the future. It took me a long time to get to this place. I used to want to always be right all the time and I held my confirmation bias close. Now, I try to recognize when it starts creeping in and open up to opposing information.

“The older I get, the more open-minded I get, the less judgmental I get.” – Gwyneth Paltrow

2. Recency Bias

Recency bias puts too much emphasis on the most recent and available information. We tend to assume that whatever is happening in life, whether good or bad, will continue for the foreseeable future. People with recency bias can become overly pessimistic or optimistic about life events. This causes us to over-extend ourselves in the good times and seclude ourselves in the bad.

Nothing in life goes in a straight path, life is full of cycles and we must learn to ride these waves.  No matter how good or bad something feels in the moment, remind yourself that it won’t last forever.  A meditation and mindfulness practice helps me notice when recency bias is creeping into my life and allows me to center myself, stop putting myself down when things are going poorly and not to be too overconfident in the good times.

3. Bandwagon Effect

Doing something because everyone else is doing it regardless of our own beliefs is the bandwagon effect. Everyone believes we are our own person and would never act a certain way just because other people are doing it. For example, watch how the mob mentality unfolds when people act in ways they never imagined they would. Our brains evolved as part of tribes and in order to keep us safe, we had to stick together.

If we didn’t agree with the tribe, we could be banished and would then die alone in the wild.  Our brains have yet to evolve from this stance, and it makes it easy for us to just jump on the opinions of the group and ride along. Whenever I find myself agreeing with everyone else, I try to make sure I am doing it for the right reasons and it is not for the purpose of staying in the group. The status quo needs to be challenged.

When challenging these biases, I have found the most benefit is in debating with others.  Cognitive biases make it hard to change someone else’s mind, even my own. I try to stay open to others’ points of view and try to see where they are coming from and why they came to their conclusion.  In the end, different opinions are what make the world go round.  How much fun would it be if we all believed the same things? If you would like to check out a more comprehensive list of biases, The Visual Capitalist has a great infographic.

“Be sure you put your feet in the right place, then stand firm.” – Abraham Lincoln

In understanding how our own brain works, it allows us to be more empathetic with others and will help find our own blind spots. While it does happen less these days or at least I hope, I find it fascinating how I will still make irrational decisions even though I am aware of the biases I struggle with (there is plenty of research that shows I am not the only one).  If you find yourself in the same situation, remind yourself that you are now aware of your biases and improving your decision-making with this knowledge.

Which one of these biases impacts your life the most? Let us know so we can help!

Taylor Somerville worked in the investment business for the past 15 years in Memphis, TN. He recently decided it was time to move on to the next chapter in his life and is currently on sabbatical. Taylor lives an active lifestyle and recently completed the World's Toughest Mudder, a 24-hour race around Lake Las Vegas. He enjoys focusing and learning all he can on mental, physical, and spiritual well-being. He reflects on these in his weekly newsletter, The Long Game.

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2. Use “I” statements: Speak from your own perspective and avoid placing blame or making accusations.

 

3. Avoid assumptions: Don’t make assumptions about what the other person is thinking or feeling.

 

4. Be clear: Express your thoughts and feelings clearly and concisely by getting to the point and avoid using jargon or overly complex language.

 

5. Show empathy: Show that you understand and care about the other person’s feelings.

 

6. Offer valuable insights: When speaking in a group, provide a valuable takeaway or actionable item that people can walk away with.

 

7. Be an active listener: Listen attentively and respond accordingly, incorporating your points into the conversation.

 

8. Choose the right time: Pick the most opportune time to speak to ensure that you have the group’s attention and can deliver your message without interruption.

 

9. Be the unifying voice: Step in and unify the group’s thoughts to calm down the discussion and insert your point effectively.

 

10. Keep responses concise: Keep responses short and to the point to show respect for others’ time.

 

11. Avoid unnecessary comments: Avoid commenting on everything and only speak when you have something important to say.

 

12. Cut the fluff: Avoid being long-winded and get straight to the point.

 

13. Prepare ahead of time: Sort out your points and practice them before speaking in a group.

 

14. Smile and be positive: Smile and nod along as others speak, to build a positive relationship and be respected when it’s your turn to speak.

 

15. Take responsibility: Take responsibility for your own actions and feelings.

 

16. Ask questions: Ask questions to clarify any confusion or misunderstandings.

 

17. Avoid interrupting: Allow the other person to finish speaking without interruption.

 

18. Practice active listening: Repeat what the other person said to ensure you have understood correctly.

 

19. Use your body language too: Use nonverbal cues such as eye contact, facial expressions, and body language to convey your message and build rapport.

 

20. Be aware of the tone of your voice: it should be calm and assertive, not aggressive or passive.

 

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I you want to learn how to become more confident in life then you can join my weekly mentorship calls and 40+ online workshops at AweBliss.com so you can master your life with more success.

 
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