Consider the fox as a good guide for decisionmaking

  • Article by: ROSS LEVIN
  • April 25, 2011 - 5:26 PM

I once bought a coffee travel mug to save 50 cents on my future coffee shop purchases.

I calculated the amount of times I buy coffee and what the payback period would be. But my calculus did not include the hundreds of dollars I'd have to spend on dry cleaning from those inevitable drips from a leaky mug or the chiropractic bills I incurred from contorting my body to avoid those drips.

I took a pleasant experience -- a fine morning cup of coffee -- and for 50 cents a visit, turned it into a shirt-wrecking, back-wrenching trauma. I put up with this for a long while before I went back to paper cups.

We all do things that we think make good sense, but if we stood back and looked at them, we'd realize that sometimes they don't. We examine limited data to make broad decisions, react emotionally, and lose sight of the things that are important.

This newspaper had an article last week with the headline: "Super wealthy pay less // But majority of Americans who escape federal taxes have low or medium incomes.'' You may have focused on how wrong it is to try to increase the taxes on the "rich," who provide the government support for the 50 percent of households that pay nothing. Or perhaps you can't believe that tax rates have fallen for those who already seemingly have it all.

Arguments on this topic are useless because each view has ample material to support their already grounded beliefs. Isaiah Berlin once said that the fox knows many little things but the hedgehog knows one big thing. In this debate, unfortunately, most people are hedgehogs.

While being a hedgehog may make sense when developing a strategy for a business or seeking clarity on pure values-based decisions, given the complexity of our lives, we more often need to be foxes. Think about decisions in three ways: Are they reversible, regrettable, and/or regenerative?

Given the number of decisions that we are going to make about money, we will invariably make some mistakes. I should have bought a leakproof mug. Big deal. But because I refused to acknowledge the mistake and move on, I cost myself some pretty nice ties. At a larger level, one of our clients is trying to decide about buying a vacation home. We don't think prices have bottomed in most areas, and are encouraging most people to delay their purchases.

But this couple's unique circumstance makes it reasonable for them to buy now. Like the fox, they can get many things right, and that is enough. Another client asked us the same question, but for them, we suggested stepping into their situation with a long-term rental. If they had to reverse the situation, the costs would be too great.

Some decisions may be regrettable. We have had clients go through divorce and their entire focus was on what the other person was getting in relation to them. Lost in this battle were the increasing costs of dissolution, and the children's needs.

We have also had clients, with ample reason to be furious with each other, rearrange their priorities so they could walk away with the least amount of animosity, a fair (but not perfect) financial arrangement and a united parenting front for their children. They were foxes; they didn't focus on the one hedgehog thing -- how they were wronged. Instead they noticed the ways to make the best of this bad situation.

Lastly, are your decisions regenerative? Buddhist Pema Chodron says, "Since death is certain, and the timing of death uncertain, what is the most important thing?" Service and gifts to others as well as meaningful relationships have been proven to improve our individual lives. With this in mind, I hope my donated mug goes to someone who doesn't drive while drinking from it.

Spend your life wisely.

Ross Levin is founding principal and president of Accredited Investors Inc., Edina. His Gains & Losses column runs on the last Sunday of the month. His e-mail is

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