The Tyranny of Choice

In this world, there are choices for everything, and with that we now have an entire generation that cannot make decisions.

When I was a kid, we had 5 TV stations total (and that was with cable), kids now have hundreds to choose from. Coffee was coffee, until all of the various flavors arose now it is impossible to describe the list of possible choices.  What ever happened to Henry Ford’s old credo, “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 mine field  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 grid-lock for many folks, since they have so many choices they simply stop and choose not to choose.  Just because are afraid to try to decide from 1,000 different possibilities, doesn’t mean you should simply not choose (especially on the money side of things).

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 councilor tells me to buy”, is a cop-out, this is your money you are talking about.

Read, learn, plan and then act, 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 mistake, 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?

 

{ 5 comments }

{ 2 comments… add one }

  • Joe March 5, 2012, 1:56 PM

    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.

    Reply
  • retirement planning March 5, 2012, 11:06 AM

    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.

    Reply

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