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Improve Your Methods for Decision Making

Few things in life affect you more than the decisions you make. Any decision can change the course of your life. You need to learn how to make the best logical decisions with all the information. The result of your decisions should be the result you desire.

The larger and more important the decision, the more time and effort you should put into the decision-making process.

Here are the steps (and an example) for making excellent decisions:

1. Identify the decision you want to make and your ideal outcomes and objectives.

  • John wants to buy a car for only $10,000.
  • John needs to decide what car to buy and whether to finance it or pay cash.
  • John has $10,000 in savings and good credit.

2. Research. Put together as much information about the subject as you can, to improve your chances of making an informed decision.

  • John researches all used and new cars to fully understand the strengths and weaknesses.
  • John researches interest rates for new and used vehicles.

3. Define all choices. Keep all choices that align with your interests, values, and goals. Discard the rest.

  • What’s important to John is the car’s reliability, safety, and fuel efficiency, not the make or model.
  • What’s important to John regarding cost is that he doesn’t want to pay a loan for over 2 years.

4. Define all outcomes of each option.

  • John could buy a new car, but that would cost $20,000 or more and he would have to pay for it for 5 years.
  • John could buy a used car and pay cash, but then he would have nothing remaining in savings.
  • John could buy a used car, pay for part of it and finance the rest. That way he could keep enough money in savings.

5. Define all the pros and cons of each outcome.

  • John would love a beautiful new car, but can’t afford to buy it; it's just too expensive.
  • He could buy a used car if it is in good shape; he might have to worry about more repairs.
  • Ideally, John would like the car to look almost new.
  • John can’t pay all cash, because he needs reserve savings in case of an emergency.

6. Ask trusted family and friends for their opinion on the choices.

  • His brother says “go for the new car, you deserve it!”
  • His father says, “buy a used car, just make sure it’s a one-owner car, with only 50,000 miles, and no history of accidents or flood damage.”
  • His girlfriend doesn’t care what he buys; she wants the radio to have Bluetooth, so she can play her music.

7. Make your decision.

  • John buys a one-owner, Toyota Camry, with 50,000 miles, a clean title that's free of accidents and weather damage.
  • He puts $5,000 down on the car and finances the rest of the balance for 2 years at 5% interest.
  • He buys new floor mats to make it look like a new car.
  • The radio has no Bluetooth, but no one gets everything they want.

In the example above, John could have made a different decision. The decision he made was one that met all his requirements and was the best overall choice for a car. Long term he will know if he made the best decision.

This is one process for making excellent decisions. Sometimes, even with this process, you can have an unexpected result. However, this process should limit risk and maximize the chance of a good result.

Decision Trees and Flow Charts

Decision trees and flowcharts are very helpful for making good decisions. These are excellent because both will visually engage your thought process.

They often use decision trees and flowcharts in technical disciplines to find the best solution. But there's no reason you can’t use these tools when making an important decision.

According to Wikipedia, “A decision tree is a decision support tool that uses a tree-like model of decisions and their consequences, including chance event outcomes, resource costs, and utility.”

According to, a "flowchart is a visual representation of the sequence of steps and decisions needed to perform a process. It notes each step in the sequence within a diagram shape. Steps are linked by connecting lines and directional arrows.”

Since there are so many excellent resources online, this book won't cover much more about these tools. The important concept is the more information you have and the better you identify outcomes (best and worst outcomes), the better decisions you will make for difficult and complex issues.

You can create decision trees and flowcharts with a pencil and paper or on a whiteboard with dry markers. You don’t have to buy any software to do this (although a lot of this software is fun to use and can make the process easier). Below are great resources with a lot more information.


  • Few things will affect your life more than your decisions.
  • The larger and more important the decision, the more time and effort you should put into the decision-making process.
  • It is paramount that you develop a reliable method for making excellent decisions.

Questions to Ask Yourself

  • Do I make good decisions? If not, why not?
  • What can I do now to make better decisions?
  • Do I always want to learn from my own mistakes?
  • What is the last thing I learned the hard way?
  • What other decisions could I have made?
  • Would the outcome have been any different? 

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