How much can you lose with this decision?

Since I linked to Rodinhood’s post on the weekend, I wanted to write my own post with a very good lesson that a Marwari friend taught me while we were in college.

He told me that his father used to complain that there is a lot of stress, and tension because of a land dispute with a neighbor and that it was taking a toll on his health.

My friend asked his dad – what’s the value of this land to which his dad replied it’s worth Rs. 50,000, and my friend said then that should be the limit to your worries.

You think about this land day and night, and talk to me about it every time I call as if this is the most important thing in your life, but it’s not, it’s a problem that can cause you a damage of Rs. 50,000 at the most, and you can’t ruin your health for a problem that’s not even worth a lakh.

I don’t know whether his father took the advice to heart, but to me, that was a very valuable lesson, and one that has helped me deal with small little things that bother some of my friends disproportionately.

One of my favorite examples of this is trying out a new restaurant. Some of my friends will research the menu, read reviews, call up people and still be undecided before trying out a new place to eat!

This is ridiculous because the most you stand to risk is a bad lunch that you will probably forget in a few hours, and a little money which you have decided to spend anyway. Is it wise to spend hours thinking about this?

I see many of these same people making big money mistakes like keeping a lot of cash in savings account, just owning one or two shares in the name of investments, or having no emergency funds at all. It seems to me that some people spend as much time thinking about a 100 rupee decision that they do on thinking about a 5000 rupee decision.

I think taking the time to think about how much you can lose because of a decision greatly helps in putting things into perspective and reduce anxiety as well as the tendency to become penny wise and pound foolish.

15 thoughts on “How much can you lose with this decision?”

  1. Decisions like which Restaurant to eat is much simple then investment because it requires intellect. Investment is a subject all together and a very big decision while having Food is just a plain common sense.
    One analogy can be – Arithmetic is simple than Mathematics.
    Sadly, we have never been taught enough about Investments and Financial decisions in school; and even if we were taught how much of it we would have understood then with no money 🙂

  2. Good read Manshu.

    Really appreciate the way you have given us an advice which could help relieve stress and better our lifestyle.

  3. Well said Don’t sweat the small stuff (though easier said then done..)
    Marwari’s have a great acumen for business and being married to Gujrati often hear about how Marwari’s are ahead of Gujrati’s in terms of business sense. The post to Rodhinhood was very interesting and insightful.
    Now it is known fact that Emotional Quotient (EQ) plays bigger role than Intelligence Quotient(IQ) and behavioral economics is finding answers to why people behave the way financially. I know so many people haggle with the sabzi wala, spend hours planning their trip but would put money in stocks on tips or sign the LIC policy or wait for the right time to invest.
    Thanks for reminding us of the simple fact how much can we loose to put things in perspective for we all know how common is common sense!

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