24 Jul The Optionality Trap: Why keeping your options open can be a bad idea
via the Ladders by Thomas Oppong
Many people have become habitual option collectors — a mindset that prevents them from reaching their goals. They don’t want to miss out on anything, so they hold on to too many options without taking action.
If you are not sure what to do with your life, you can easily fall prey to the optionality fallacy.
The primary essence of optionality is the ability to exercise the most favorable option that will advance your goals without predictable knowledge that would allow you to make an informed decision.
“Keep your options open” is not necessarily a bad advice but when it stands in the way of taking action, you will miss out on a lot of experiences in life and waste your precious time in the process.
“Research by Harvard psychologist Dan Gilbert, author of Stumbling on Happiness shows that reversible, keep-your-options-open decisions reliably lead to lower levels of satisfaction than irreversible ones. In other words, we are significantly less happy with our choices when we can back out of them,” writes Heidi Grant Halvorson, a psychologist and author of No One Understands You, and What To Do About It.
Optionality is a popular concept in the finance world.
“When you hold an option and the world moves with you, you enjoy the benefits; when the world moves against you, you are shielded from the bad outcome since you are not obligated to do anything. Optionality is the state of enjoying possibilities without being on the hook to do anything,” writes Mihir A. Desai, a M.B.A. graduate of Harvard Business School and a Ph.D. graduate of the Graduate School for Arts and Sciences.
People in finance love collecting options, especially low-cost options. Every option has a cost associated with it though. Preserving optionality means waiting as long as possible to make a decision.
The same mindset, when applied in life, may not be a good idea if you keep hedging your bets without taking action. Success comes from taking strategic actions.
Optionality can be a backup tactic, not something to pursue first. When maximising options becomes an end in itself, you can never achieve your goals.
Life is ultimately about choices — what you choose to do and as a result, what you choose not to do.
If you are choosing amongst options that are relatively inexpensive, or without high life-changing costs, you can benefit from the theory of options.
Nassim Taleb, author of Antifragile: Things That Gain from Disorder argues that prediction is impossible in the modern world is impossible hence the need to maximise optionality.
Instead of trying to predict what is going to happen, position yourself in such a way that you have optionality.
He explains, “If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favorable outcomes when they occur.”
But for anything to qualify as an option, it must have limited downside with large, open-ended upside...
… keep reading the full & original article HERE
#happiness #happy #options #choices #psychology #selfhelp