I was recently in a meeting going over a relatively big project and the presenter said, "We have to get this right." I felt myself tense immediately. If we didn't get it right, that means we got it wrong. And what would the consequences be for getting it wrong?
As the meeting went on, the conversation become more focused on the problems, not the opportunity. The stakes were elevated to a place where a decision was going to be unlikely.
Think about all the decisions that you have made in your life and how few of them you really had to get right. That's because almost nothing is binary. There is a continuum of "rights" and most of the time we can't know where we landed until after the fact.
Here is the financial planning case for replacing "We have to get this right" with "Let's see how this goes and be prepared to adjust." For those of us who think in black and white, that seems like a terrible option. But it isn't terrible; it's realistic.
Let's practice. You are deciding between renting and owning. You don't have to get this right. Either choice has some advantages and disadvantages and neither choice is irreversible. What you want to do is increase the odds of making a decision with which you will be comfortable.
The process starts with priorities. When you decide which things are most important to you, you are going to place yourself further on the more right than wrong continuum. Your first step is understanding what you can afford.
This is important because if you limit your search to rentals or homes that are in your price range, you likely will limit your comparisons to features or areas that work best for you rather than falling in love with things that make everything else feel like a significant step down.
Once you know what you can afford, then create your must-haves vs. your nice-to-haves. The must-haves may involve why you are moving in the first place. Your must-have list should be short. The things on this list may include commute time, bedrooms or being pet-friendly. This will create your initial geographic circle for investigation.
If you can't find places in your price range that include your must-haves, then you may need to remove one or two of them. Then start to fold in your nice-to-haves. Some of these are things you could eventually add, but some are things that are more important initially to you. As you go through the list, your rent vs. buy decision will become more apparent.
If both options remain open, then consider your current situation and the likelihood of it changing. This is far more important with the buy decision because the costs are higher for making adjustments. But neither decision has to be permanent. You may think that you don't want to ever move again, but that is generally a nice-to-have, not a must-have.
The key to not having to get things right is a willingness to adjust if things are not working out. That willingness is emotionally easier if your sunk costs are not too high.
Here's another thing you can practice. You are getting ready to retire. Does retirement have to be an on/off switch where you are either working or retired or can it be a dimmer switch where you begin to adjust your hours or your type of work?
As Chris Farrell writes in his book, "Purpose and a Paycheck," "[We] desire to improve the quality of everyday life over the long haul." There are many ways of doing this.
For most of us, the quality of our lives comes from a variety of personal, professional, social, and charitable efforts and interactions. A successful retirement may mean a reweighing of those categories but it doesn't have to mean an elimination of some of them.
One of our doctor clients loved working but hated the two or three times a month when she was on call — having to answer a page any time during the night to potentially come to the hospital to handle an emergency. If she could no longer have to handle such calls, she would work longer. But since many doctors don't like being on call, the price of giving it up was a significant reduction in income.
The client was choosing between retiring from a job that she loved or working in a way that would make her happy but earn her less money.
Her issue was not about satisfaction, it was about fairness. But that's really ego. She eventually accepted that if the arrangement was not satisfying she could either take back the on-calls or retire. The stakes were considerably lowered.
Ego is often a contributing factor to feeling like we have to get things right. We are afraid of making a mistake or trying something that we later need to reverse because we are concerned what others may think or say. But treat these things as experiments with an expectation that you will need to adjust and you may find it easier if you set your ego aside. "Let's see how this goes and adjust" puts decisions in their proper place in a constantly changing world.
Ross Levin is the chief executive and founder of Accredited Investors Wealth Management in Edina.
