There are choices for everything in this world, and with that, we now have an entire generation that cannot make decisions.
As a kid, we had 5 TV stations (with cable). Kids now have thousands of choices. Coffee was coffee until all of the various flavours arose. It is impossible to describe the list of possible choices. Whatever happened to Henry Ford’s old philosophy, “You can have any colour you want, as long as it is black” (for the Model T, when it was first introduced)?
In investing and your money, the tyranny of choice is acute, if not rampant.
There used to be a few Mutual Fund companies. Now there are so many I could fill pages just with the name of the firms. Simply investing is now a minefield of ways to invest and who(m) to invest with (not so long ago, you had to talk to a broker, and that was it), now you can invest through your Dunkin’ Donuts location (can’t you?).
The Tyranny of Choice has created cerebral gridlock for many folks. Since they have so many choices, they stop and choose not to choose. Just because you are afraid to decide from 1,000 different possibilities doesn’t mean you should not choose (especially on money).
With investing, if you don’t know what you are doing or don’t know what to do, go find out or find someone you trust to help you make the decision. The argument, “I can’t understand the difference between Mutual Funds, Index Funds, Active and Passive investing or any of that crap, so I just buy what my buddy the investment councillor tells me to buy,” is a cop-out.
How to Deal with Too Many Choices
Reading, learning, planning and then acting is the way to move forward. You can’t simply stick your head in the sand and hope no one kicks you in the butt (financially) because we know that someone with a big boot is out there waiting for you.
If you make a mistake, learn from the error, but at least you made a decision (unless that decision was to get a pay-day loan, in which case, that was a BAD decision), so be a grown-up and move on. Everyone makes mistakes. I can respect someone who makes mistakes (and learn). I can’t respect people who refuse to do anything.
Are you afraid of all these choices, or do you relish and enjoy your freedom of choice?
If you use appropriate filters on your investments – e.g. only index funds, as the MERs on Mutual Funds are ridic in Canada; if you’re buying stocks, only buy stocks that pay a dividend – then it’s very easy to narrow down the field and rank them in a hierarchy. Diversify; you shouldn’t be making one choice, you should make many.
Yeah. It is better to make a mistake and learn than making no mistake and learn nothing. If you are lucky and go all the way up smoothly, once you fall, you won’t be able to get back up again because you fall so badly that it hurts. You will not be able to accept the fact that you failed.