Do you worry endlessly about choices you have made that might not work out as planned?
Do you regret not doing something in the past that, with benefit of hindsight, would have been great? Welcome to the club. Everyone, to varying degrees, suffers from regret. Groundbreaking new research details just how big a problem regret can become. Regret aversion can literally cost you a secure financial future.
The Road Not Taken
Cornell Professor Tom Gilovich and New School Professor Shai Davidai published a summary of their research in the April issue of Emotion titled “The Ideal Road Not Taken.” If you’re like me, the title caused you to harken back to Robert Frost’s poem, “The Road Not Taken.” Both the paper and the poem center around the heavy cost of self-deception.
What makes this research so interesting is the professors interviewed hundreds of people across six studies to test their hypothesis. The essence of their work is built around the three elements within our sense of self: the actual, the ideal, and the ought selves. The actual self is who you really are, the skills and attributes you possess. The ideal self includes your aspirations and desires. Finally, your ought self includes who you think you should be based on your overall obligations and responsibilities.
Your Inactions Matter
This current research, and some of Dr. Gilovich’s earlier work, concludes that people tend to regret things they didn’t do more than things they actually did. The central hypothesis is that the most long lasting regrets come from the disconnect between the actual and ideal selves. In other words, the things you decided not to do end up mattering much more than the things you actually decided to do.
Where this becomes important from a financial decision-making perspective is that falling short of your ideal self is because of inaction. It’s failing to do the things you meant to do along the way. Breaking through the very strong hold of the status quo, just doing nothing, can prove difficult.
Gilovich and Davidai found that participants experienced regret about their ideal self almost three times as often as regret from actual decisions. A full 76% of the participants refer to their single largest regret in life as something aligning with their ideal self.
There are practical implications that we often see in our work. Clients can become “frozen into inaction” from constantly worrying about their decisions not measuring up to their aspirational ideal self.
Secure financial futures are built upon steps along the way; actions that propel you down the path. Start there.
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