The short-term fallacy

It is quite often that we make important life decisions based on short-term rewards. Our brains are wired to hang onto short-term rewards since throughout the majority of human existence long-term thinking was hindered by life threatening situations. Can’t do much long-term thinking while being hunted by a lion or with an empty stomach.

I’m not talking about those situations though. I’m talking about career or partner choices that are based on state (that represents short-term) and not trajectory (that represents long-term). 

Take this image of an airplane for example: by the looks of it, its state is perfectly fine, flying in the sky towards some destination. Let’s assume that this airplane has reduced thrust in both engines and a flight computer malfunction is causing the airplane’s nose to pitch up. The airplane is flying alright but it is minutes away from an aerodynamic stall, a situation where the lift generated by the air flow over and under its wings is not enough to sustain normal flight. Unless the pilots do something, like pitch down for example, the airplane will fall from the sky in a free fall. 

It is quite common that we get carried away by a state that looks appealing and fail to see the trajectory. The examples are numerous, we choose a company because it reduces commute time, offers remote or uses a technology that we really like. We choose a business partner because it happens to be a friend or share a common lifestyle. 

These are states that don’t reveal anything about the future and while choices based on short-term evaluations are not irreversible it is worth taking some time to evaluate the long-term repercussions.

If, while evaluating a company, you favor the technologies they use, their office location, or any other perk, ask yourself: will these circumstances be equally important for me in the future? More importantly, how committed is the company to keep the above? What if they move in 6 months, change technologies or go under?

If you get a 10% salary increase by job hopping every year, ask yourself: what will a future employer think of me in my forties, will she be able to trust me for something important? 

If, while choosing a business partner, you evaluate his / her current commitment, ask yourself: how would I want things to evolve in 10 or 15 years when both of us have a family? Do we want the same things from our lives?

If, while evaluating a technology, you get excited about its current prospects, ask yourself: how dependent will I get from that technology, how easy will it be for me to change when a new one pops up? 

All these questions have no definite answers, in some cases a short-term reward is the only way out from a painful situation but in most cases we have the luxury to spend enough time to evaluate our decisions. 

Keep in mind that short-term gains (or even harder losses) are very much real and tend to understandably blur our vision. Break-ups are so hard because the immediate events are stressful and very easy to imagine than a vague description of better future times. Α bigger salary today is much easier to evaluate than stock options or a promotion that may materialize in the future. 

One trick I often employ to help myself from over-dramatizing short-term gains or losses and allow for a more calm evaluation is to write everything down, both long-term and short-term expectations. I also try to answer the question of what long-term effects my current decision will have and then put those in the evaluation mix. 

How do you make high stake decisions?

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