Over-Optimism Tendency Bias
Number 11 Of The 25 Cognitive Biases...
We tend to be too optimistic (at least in the day to day) which leads to disappointment when things don't go our way (because we expect them to).
Examples Of The Over-Optimism Tendency Bias
Life will deal tremendous blows to you in the form of death of loved ones, loss of finances and entropy over time.
We think we're going to live forever, we think we're going to achieve all that we set out to do (often without taking action!)
As Seneca the stoic says in 'On The Shortness of Life' many of us are merely passing time, we're optimistic that we're going to get what we want without lifting a finger to get it!
How To Avoid Falling Victim To The Over-Optimism Tendency Bias
You must have long term (end game) optimism as faith is a necessity for success.
You must have force of will and faith (feel success before you grasp it).
Preparation and expectation are key to overcoming the adversity that we all will encounter in life – when you’re expecting things they are not as dramatic.
Fear is functional – while you remain optimistic in the long term you must be pessimistic in the day to day operations.
All emotions have functional uses – fear, anxiety, confidence… harness these for good.
Contemplate the downside like the F-22 fighter pilots… what could go wrong? Develop multiple plans based on these.
Want To Know More About Charlie Munger's Cognitive Biases & How To Dominate Life?
I recently purchased Charlie Munger’s flagship book, Poor Charlie’s Almanack – a book filled with hundreds of pages of wisdom from a billionaire and master of mindset and mental frameworks to improve your life..
This book cost me $65 USD. To most this will seem absurd…
“$65 for a book?! What a waste of money”
…these are the same people that spend hundreds of dollars on junk food and alcoholic beverages on Friday and Saturday night.
Delay The Instant Gratification
Don’t adopt the epicurean mentality of “eat, drink and be merry for tomorrow we die.”
You must think long term, you must delay the instant gratification we’re so used to experiencing in this life and invest for tomorrow (stoicism).
“Don’t invest in things that’ll rust, rot or depreciate, invest in things that’ll be worth more later or make you be worth more later”.
The information in this book is worth well over $65 if read and implemented, the information on investing and cognitive biases is worth its weight in gold.
But remember, It’s the application of knowledge that counts, not just the acquisition (read it and take action!)
Check it out and grab your copy of Poor Charlie’s Almanack here.