Tips To Make Effective Decisions

Its true that you are the product of your own thoughts and decisions. Whatever you decide on daily basis, whatever you do in your routine life is directly or indirectly linked to your future. That means you are making the foundation of your destiny with your decision and actions in your routine life. So by looking at the bigger picture, it is right to conclude that decision making is critically important for your success and achievements of lifetime goals.

Given below is the list of insightful factors which you need to considere while making decisions.

1. Consider the short term and long term consequences: Whether the decision is materialistic or a sensitive family matter. You have to consider short terms and long terms benefits.

2. Cost Vs quality if applicable. If you intend to purchase something, consider cost, quality, warranty perspectives. Usually cheep products have less life and bad quality but is not the case always. To cope up with this, define your budget and then carefully analyze all the options which are falling within your budget.

3. Need Vs wants analysis: Are you purchasing for pleasure or it is your long term need. Remember this is a difference between pleasure and happiness. Sometimes pleasure dost not last long so you don’t want to spend a lot for the sake of short time pleasure. If you are in Need of something then consider point-1 and point-2.

4. Consider emotions: This is quite sensitive aspect. You have to put yourself in everyone’s shoes to understand his/her emotions. You don’t want to hurt someone with your decision, instead you want to keep your stake holders emotionally satisfied. Emotional Intelligence is an art; learn it by reading on internet. To understand people you have to have true sense of judging people

5. Consider Win-Win: A balanced approach in which everyone gains is always recommended.

6. Consider all options: Don’t stop your brain on one idea or approach. Think about more options. Seek advice from others on different possible solutions of the given situation/problem. to the problems which need decisions.

7. Ask for criticism: If possible ask for criticism before implementing the decision. Although it’s never too late to ask for criticism even after your decision. Feedback always helps in your future.

8. Learn to differentiate between Urgent and Important tasks.

9. Closely observe others: Think about what your friend/colleague/acquaintance did under a specific condition. A wise man always learns from the mistakes of others.

Seven Habits of Highly Ethical People‏

People are ethical because of social norms, religious beliefs and laws. Ethical foundations in an individual define the way he lives the life by differentiating between right and wrong and behave in a way which improves the situation directly or indirectly however doesn’t harm it at any cost. Ethics have been defined by relevant governmental and religious authorities for several domains of life however below article occupies blanket coverage for all norms of life.

Below are top seven qualities of highly ethical people.

1. They are Empathic: Ethical people have high degree of emotional intelligence. They understand things from multiple perspectives covering all the direct and indirect stake holders.. They seek first to understand than to be understood. They have strong observatory, listening and analytical skills to understand things deeply.This quality makes them unique which enables them to win the trust of others; consequently, people share their problems with them with open heart and seek their support.

2. They Forgive and Forget: It requires a brave heart to forgive and forget. Ethical people dont keep grudges for long duration. They have the tendency to establish peace all the times hence keeping the brawls open does not suit them. They stay away from such complications and move ahead with life by forgiving and forgetting the matters.

3. They are Always willing to Help: Highly Ethical people always want to improve the situation regardless of their relationship with a person who is in trouble. They take either corrective, preventive or suggestive initiatives for resolving issues. Corrective approach ensures that the matter is fixed by doing some specific actions. Preventive approach guarantees that such particular matters do not appear again. They use preventive approach to reach the root cause of the issue so as to fix it permanently so as to avoid further frequency of such incidents. Suggestive methodology is used by them for guiding someone to do some specific act in order to overcome a tragic situation

4. They are Implosive: Ethical people are not hyper sensitive or explosive personalities. They possess a cool mind and a soft heart. They avoid frequent mood swings in order to develop a consistent and stable personality. They handle indecencies with decency. They know how to ignore hard and harsh comments and still converse softly. They know how to handle idiotic situations. They have high degree of anger management skills which further empowers their implosive personality trait.

5. They Mind Their Own Business: A lot of people have the habit of having serious curiosity about every other persons life. This habit causes them talk about people too much, spreading rumors and scattering false news in the society without any verification. Unlike those, ethical People do not interfere in others lives unnecessarily; they mind their own business. Ethical people understand the fact the character assassination is equally a great sin so they don’t give attention to rumors and focus on crystal clear matters; and avoid peeping into others personal matters.

6. They are Flexible adaptable: The wise says, it is better to bend than to break. Ethical people possess a great deal of elasticity. They adapt themselves according to the situation. They dont stick to one mind set. Their continuous thought process enables them to change their minds easily in order to improve a situation without making it a matter of ego. They are not stubborn at all instead portray a flexible behavior in all kind of tough situations.

7. They Do not criticize: Too much criticism is the root of several social and professional problems. Ethical people do not criticize at first place. In case they need to condemn or criticize something they follow a positive methodology to approach the relevant person and advice in a way which doesnt hurt anyone and convey the message in an effective way

Ten steps to reach your dream goal

Everyone follows different paths to reach their financial goals. While some prefer to invest in ‘safe’ assets others prefer riskier alternatives, and many believe in putting off larger expenses till their goals are met. No matter which method is used, there are some basic areas that need to be addressed to meet one’s financial goals.

Define financial goals – Goals should not be vague such as retirement or a better home. It should be specific, say, “I need to save Rs 5 crore for my retirement” or “I want to buy an independent 3 bedroom house in XYZ area”. The clearer the goals, the easier it is to plan and achieve them.

Create a financial plan – Review current investments, insurance, and other assets before making the plan. Decide on the investment avenues that will be used to achieve the goal. This will be based on your risk profile, age, earning capacity, tax bracket.

Risk tolerance – Do an assessment of the level of risk you are willing to take. Typically, higher risk assets yield higher returns and vice versa. If you are able to get a good night’s sleep while investing in riskier assets, then equity-based products are a good option, else it is better to invest in safer debt-based investment products.

Make a budget – This is one of the most important steps towards achieving one’s financial goals. A proper budget will help in ensuring that savings and investments are done regularly as well as keep unnecessary expenses and debt at bay. It is important to check the budget on a weekly and monthly basis to see if your expenses are within the budget or if they have gone over your income.

If you are in the green (income is greater than expenses) then your budget is working for you, but if you are in the red (with expenses more than income), then it is time to rationalise spending.

Automate Investments – It is advisable to invest on a monthly basis (through a systematic investment plan), as this will give one the double benefit of regular investment, or discipline in investments, and compounding. It will also negate the need to time the markets. Ideally, you should automate this process by a direct ECS transfer to avoid any last minute delays in investing.

Invest from an early age – Starting to invest early will give you the benefit of compounding. An additional few years will result in substantial difference in the value of the investment over a period of time. For example, if investor A starts investing Rs 50,000 per year at age 30 and investor B starts investing the same amount at age 35, when they both reach the age of 55, investor A has a corpus of Rs 61 lakh while investor B has only Rs 40 lakh (assuming both earned 8 per cent interest per annum). This shows that even a few years can make a substantial impact in the long run.

Diversify – Always seek to diversify portfolio, since one asset class could perform well, while others are posting low returns. Diversifying can help in reducing the risk in the portfolio, and give better returns over the long run. Ideally, your portfolio should be a mix of debt, equity, real estate, and commodities.

Time horizons – When making investments, time horizons need to be kept in mind. It is advisable not to invest money that is required for short term needs such as purchasing a car or digital camera, spending on a vacation, and such in equities as these are riskier in the short run.

Long term investment goals can be met with riskier assets, as over the long run equities are likely to give better returns.

Emergency fund – This is an important aspect of financial planning. You should always keep aside some money for emergencies in a liquid form (ideally in cash in a separate savings account). Ideally you should save four to six months’ of living expenses in this account.

Review – It is crucial to regularly review the portfolio, as what is a good investment today might not be the best investment a year or two hence. You can either monitor and rebalance the portfolio on a yearly basis, or based on the values of various asset classes in the portfolio.

News Is Bad For Your Brain‏

News is bad for your health. It leads to fear and aggression, and hinders your creativity and ability to think deeply. The solution? Stop consuming it altogether

By Rolf Dobelli, Author of THE ART OF THINKING CLEARLY
In the past few decades, the fortunate among us have recognised the hazards of living with an overabundance of food (obesity, diabetes) and have started to change our diets.
But most of us do not yet understand that news is to the mind what sugar is to the body. News is easy to digest. The media feeds us small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking. That’s why we experience almost no saturation. Unlike reading books and long magazine articles (which require thinking), we can swallow limitless quantities of news flashes, which are bright-coloured candies for the mind.
Today, we have reached the same point in relation to information that we faced 20 years ago in regard to food. We are beginning to recognize how toxic news can be.

News misleads.

Take the following event. A car drives over a bridge, and the bridge collapses. What does the news media focus on? The car. The person in the car. Where he came from. Where he planned to go. How he experienced the crash (if he survived). But that is all irrelevant. What’s relevant? The structural stability of the bridge. That’s the underlying risk that has been lurking, and could lurk in other bridges. But the car is flashy, it’s dramatic, it’s a person (non-abstract), and it’s news that’s cheap to produce.
News leads us to walk around with the completely wrong risk map in our heads. So terrorism is over-rated. Chronic stress is under-rated. The collapse of Lehman Brothers is overrated. Fiscal irresponsibility is under-rated. Astronauts are over-rated. Nurses are under-rated.
We are not rational enough to be exposed to the press. Watching an airplane crash on television is going to change your attitude toward that risk, regardless of its real probability. If you think you can compensate with the strength of your own inner contemplation, you are wrong. Bankers and economists – who have powerful incentives to compensate for news-borne hazards – have shown that they cannot. The only solution: cut yourself off from news consumption entirely.

News is irrelevant.

Out of the approximately 10,000 news stories you have read in the last 12 months, name one that – because you consumed it – allowed you to make a better decision about a serious matter affecting your life, your career or your business.
The point is: the consumption of news is irrelevant to you. But people find it very difficult to recognise what’s relevant. It’s much easier to recognise what’s new. The relevant versus the new is the fundamental battle of the current age. Media organisations want you to believe that news offers you some sort of a competitive advantage. Many fall for that. We get anxious when we’re cut off from the flow of news. In reality, news consumption is a competitive disadvantage. The less news you consume, the bigger the advantage you have.

News has no explanatory power.

News items are bubbles popping on the surface of a deeper world. Will accumulating facts help you understand the world? Sadly, no. The relationship is inverted. The important stories are non-stories: slow, powerful movements that develop below journalists’ radar but have a transforming effect. The more “news factoids” you digest, the less of the big picture you will understand. If more information leads to higher economic success, we’d expect journalists to be at the top of the pyramid. That’s not the case.

News is toxic to your body.

It constantly triggers the limbic system. Panicky stories spur the release of cascades of glucocorticoid (cortisol). This deregulates your immune system and inhibits the release of growth hormones. In other words, your body finds itself in a state of chronic stress. High glucocorticoid levels cause impaired digestion, lack of growth (cell, hair, bone), nervousness and susceptibility to infections. The other potential side-effects include fear, aggression, tunnel-vision and desensitisation.

News increases cognitive errors.

News feeds the mother of all cognitive errors: confirmation bias. In the words of Warren Buffett: “What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.” News exacerbates this flaw. We become prone to overconfidence, take stupid risks and misjudge opportunities. It also exacerbates another cognitive error: the story bias. Our brains crave stories that “make sense” – even if they don’t correspond to reality. Any journalist who writes, “The market moved because of X” or “the company went bankrupt because of Y” is an idiot. I am fed up with this cheap way of “explaining” the world.

News inhibits thinking.

Thinking requires concentration. Concentration requires uninterrupted time. News pieces are specifically engineered to interrupt you. They are like viruses that steal attention for their own purposes. News makes us shallow thinkers. But it’s worse than that. News severely affects memory.
There are two types of memory. Long-range memory’s capacity is nearly infinite, but working memory is limited to a certain amount of slippery data. The path from short-term to long-term memory is a choke-point in the brain, but anything you want to understand must pass through it. If this passageway is disrupted, nothing gets through. Because news disrupts concentration, it weakens comprehension.
Online news has an even worse impact. In a 2001 study two scholars in Canada showed that comprehension declines as the number of hyperlinks in a document increases. Why? Because whenever a link appears, your brain has to at least make the choice not to click, which in itself is distracting. News is an intentional interruption system.

News works like a drug.

As stories develop, we want to know how they continue. With hundreds of arbitrary storylines in our heads, this craving is increasingly compelling and hard to ignore.
Scientists used to think that the dense connections formed among the 100 billion neurons inside our skulls were largely fixed by the time we reached adulthood. Today we know that this is not the case. Nerve cells routinely break old connections and form new ones. The more news we consume, the more we exercise the neural circuits devoted to skimming and multitasking while ignoring those used for reading deeply and thinking with profound focus.
Most news consumers – even if they used to be avid book readers – have lost the ability to absorb lengthy articles or books. After four, five pages they get tired, their concentration vanishes, they become restless. It’s not because they got older or their schedules became more onerous. It’s because the physical structure of their brains has changed.
News wastes time.
If you read the newspaper for 15 minutes each morning, then check the news for 15 minutes during lunch and 15 minutes before you go to bed, then add five minutes here and there when you’re at work, then count distraction and refocusing time, you will lose at least half a day every week. Information is no longer a scarce commodity. But attention is. You are not that irresponsible with your money, reputation or health. Why give away your mind?

News makes us passive.

News stories are overwhelmingly about things you cannot influence. The daily repetition of news about things we can’t act upon makes us passive. It grinds us down until we adopt a worldview that is pessimistic, desensitised, sarcastic and fatalistic. The scientific term is “learned helplessness”. It’s a bit of a stretch, but I would not be surprised if news consumption, at least partially contributes to the widespread disease of depression.
News kills creativity.
Finally, things we already know limit our creativity. This is one reason that mathematicians, novelists, composers and entrepreneurs often produce their most creative works at a young age. Their brains enjoy a wide, uninhabited space that emboldens them to come up with and pursue novel ideas.
I don’t know a single truly creative mind who is a news junkie – not a writer, not a composer, mathematician, physician, scientist, musician, designer, architect or painter. On the other hand, I know a bunch of viciously uncreative minds who consume news like drugs. If you want to come up with old solutions, read news. If you are looking for new solutions, don’t.
Society needs journalism – but in a different way. Investigative journalism is always relevant. We need reporting that polices our institutions and uncovers truth. But important findings don’t have to arrive in the form of news. Long journal articles and in-depth books are good, too.
I have now gone without news for four years, so I can see, feel and report the effects of this freedom first-hand: less disruption, less anxiety, deeper thinking, more time, more insights. It’s not easy, but it’s worth it.