“Have we ever made an emotional decision?” Warren Buffett asked his long-time business partner and friend, Charlie Munger, at the 2023 Berkshire Hathaway annual shareholder’s meeting. Being emotional with money is common with most people, after all.
Munger, as dry as he always is, answered without thinking1Source: YouTube:
Buffett said that he had never made an emotional investment decision in his life. And Munger agreed.
This was my favorite takeaway from their annual meeting. And it doesn’t come as a surprise. Buffett and Munger are famous for their rational decision-making.
Don’t set goals, create systems. Systems trump flexibility. This is a popular idea amongst people who share advice online.
I’ve written about it too. The idea is that you’re more consistent if you rely on a set of daily actions/habits that you execute without much thought instead of working towards goals.
I recently read The Road Less Stupid by the business strategist Keith J. Cunningham. In the book, he has a chapter called “Systems vs Flexibility.”
He provides a counterargument to the whole idea that you should always rely on systems. Cunningham writes:
“Systems are an amazing tool that worked incredibly well 200 years ago during the Industrial Revolution. Systems are exceptionally useful when the work being performed is repetitive (think assembly lines and flipping hamburgers) and doesn’t involve customer interaction, or when the environment is totally stable.”
Cunningham’s main criticism is that systems give you a false sense of security. If you execute a set of tasks every day you feel like you’re making progress. But that’s not always true.
According to a study that was conducted for the Dutch Ministry of Education, 32% of university students quit in their first year.1Source: Dutch Ministry of Education
I still remember when I was in my first year of studying business. After a few months, students started to drop out. They wanted to switch to different degrees. They thought another degree would make them happier.
1 in 3 that quits sounds very familiar to me. But quitting never popped up in my mind when I was studying.
One of the things I realized early on in my life is that education is not so much about what you learn (unless you want to be a lawyer, doctor, or in other specialized professions).