How Making Decisions Using the 10/10/10 Method Can Change Your Life

Do you find it difficult to pick a side when presented with some tough decisions to make? If so, then the 10/10/10 method is the perfect solution for you. Master this simple three-step tactic, and you will soon find it easy to make quick and correct decisions just like legendary investors, Warren Buffet and Ray Dalio.

What Is The 10/10/10 Method?

The concept of the 10/10/10 method is pretty straightforward. What it advises you to do is to ask three questions when faced with a prospect of making a choice:

• How will you feel about the decision in 10 minutes?
• How will you feel about the decision in 10 months?
• How will you feel about the decision in 10 years?

For example, suppose that you are presented with a choice to buy a refurbished vehicle within the next 24 hours at 25% discount. Now, this might entice you to buy the vehicle immediately. But at the same time, you might also be concerned as to whether it would be a bad choice. In this torn state of mind, the 10/10/10 method can offer some simple and beneficial guidance.

Ask yourself how you would feel about the buying decision in 10 minutes, 10 months, and 10 years. If you think that within 10 minutes or 10 months of spending money you might regret it, then do not go for making the investment and buying the car. Look for other options. However, if you think that after 10 years, you will not even be concerned about having spent the money, then you can consider buying it. Just make sure that the asking price is reasonable enough.

The Psychology Of Bad Decisions And How The 10/10/10 Method Helps You Overcome It

In order to understand how the 10/10/10 method works, you have to first know the psychology involved in making a bad decision. So, let us first analyze what is a ‘bad decision’.

Imagine that you are suddenly presented with an opportunity to invest in a particular stock that your broker said will double in the next 3 days. But to take advantage of it, you will need to invest the money right away. Now, the prospect of doubling the money in just three days can be so tempting that you decide to bet all your savings on the stock. Then, the unexpected happens and the stock crashes in three days instead of going up. You have lost nearly all your hard-earned money.

In the above example, the decision to invest in the stock turned out to be a ‘bad decision’. And this was something you could have avoided if you had applied the 10/10/10 method. Before investing, consider the worse possibility of losing all your money and ask yourself the following question – how you will feel about your decision to invest in the stock in 10 minutes, 10 months, and 10 years.

If you think that within just 10 minutes of betting your money, you will be fretting and worried about the possibility of losing all your savings, then do yourself a favor and refrain from making the investment. If you think that in 10 months, you will hate yourself for losing all your money, then that again is a sign that you should never invest in a stock, especially one with numerous unknown underlying risks. 

And finally, if you are making a huge investment that will have an adverse impact on your life over the course of 10 years, then run away from the stockbroker and never look back. You don’t want to spend the next 10 years of your life trying to make back the money you lost from the trade.

Final Thoughts

Think about the consequences of a decision. Not just the ‘brief ecstasy’ of a hit decision. Ponder on the implications and decide whether you’ll be well off or decline. In short, train your mind to start thinking beyond the immediate result because that’s usually just based on the emotions involved at the time. While we need to take risks to succeed, learning to take calculated risks instead of reckless ones is important.