Importance of thinking for yourself

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It is important for every human being to be able to think for himself or herself. We all have a different set of tastes, beliefs, preferences, personalities, goals, and lives. This combination makes us unique. Therefore something that might work for one person might not be suitable for another. Can all of us be good at Mathematics? Do all of us want to become doctors? Of course not. We should find what interests us and then pursue it.

In their regrets, people often say, "I wish someone had told me" or "I wish someone had warned me". To be informed or warned, you need to ask for advice. A good and suitable advice can save you much misery and reap enormous benefits. A good advice is one that if implemented correctly, has the potential of benefiting you. Not all good advices are suitable. If you pursue education in information technology or accounting and become quite capable in the domain, you are more likely to find higher paying employment for the remainder of your life. But if you have the talent and aptitude to become a really competent doctor or chef, this good advice would not be a suitable advice for you. Whenever you receive advice, you need to evaluate whether it is a good advice and whether it is a suitable advice.

The only way to evaluate someone's advice is to be more informed about the question yourself. Thanks to the Internet, getting informed has become easier than it ever was. Even after being well-informed, it is still valuable to get advice. Years ago when I was planning to buy my first new car, I was looking for quality, durability, reliability, comfort, resale value, and appealing design. After my 3 month research, I had narrowed my choice down to a few Japanese and German cars. I was more informed than car dealers about these vehicles. I felt that I knew everything there is to know and I didn't feel that I needed to ask anyone for their advice. I asked a friend of mine to accompany me to drive around different dealerships to negotiate a good price for my chosen vehicle, which happened to be a Honda. His response was not a yes or no but "did you calculate the insurance cost of the vehicle"? It turned out that the particular Honda I was interested in cost three times more to insure than a Mitsubishi in the same class, third choice on my list. Many Honda and Toyota vehicles are favourite theft targets in many parts of the world so they tend to be more expensive to insure. Since I didn't see any value in paying extra $3200 per year on insurance, I went for Mitsubishi. That model of Mitsubishi was also Car and Driver magazine's car of the year. I didn't find that out until after purchasing the vehicle!! In ten years that I kept that vehicle, I drove it in 14 countries and didn't have to spend a single penny on repairs. My lessons from this experience were to never assume that I know everything there is to know about something and to always ask for advice.

Who should you ask for advice? A King can advise you on ruling, a thief can advise you on stealing, and a beggar can advise you on begging. Would you ask a mechanic whether your pelvic pain is a sign of kidney stone? Of course not. You will ask someone who is informed on such matters. A medical professional, preferably a specialist in this domain. Always ask the recognized experts and get a second opinion and a third opinion. Ask why? You need to know the basis of the advice to evaluate three different advices. The people you take advice from MUST be honourable. Honourable people give ethical advice. Honourable and ethical behaviour is more important than most of us realize. This is precisely why I advise against getting financial advice from "experts". Very few people are honourable in the money management industry. My experience is that many are not very competent in Mathematics and Finance and only a few conduct themselves ethically. The money management industry creates very little value for investors and it is designed to take your money, not to earn you money.

It is getting harder to make the right choices. Effective marketing has clouded our judgement and ineffective laws fail to protect us from unethical behaviour of salespersons and businesses. Even though we have more information at our fingertips today than ever before, it is getting harder to make good decisions. Marketing clouds the simple truth and presents the unsuitable decision as the easy and right solution. No time to prepare lunch? Eat a hamburger. Stressed? Have a cigarette. No time to adopt a healthy lifestyle? Take this pill. What the advertisers don't tell you is that a hamburger will reduce your life by 30 minutes, a cigarette would reduce your life by seven minutes and will kill you with a set of painful diseases, and weight loss pills only in the short term and ruin your health in the long run. Marketing is often cleverly disguised disinformation. To protect yourself, you need to find the basic principles and apply the cardinal rules.

Underneath every complexity resides simple and basic principles. Cardinal rules show you how to benefit from those basic principles. By focusing on the basic principles and cardinal rules, you will be able to easily make good decisions. See how the following examples simplify good decision making

Basic principle: a vehicle is a tool for transportation
Cardinal rule: A good tool is cost-effective, reliable, durable, and fulfills your needs
Applying the cardinal rule, you will eliminate expensive European imports, most clunkers and gas guzzlers. A cool looking vehicle you got for zero down would not seem so cool when it breaks down in the middle of a blizzard and won't sell for even a tenth of what you paid for it.

Basic principle: Our bodies are biochemical machines. These machines are not designed to consume artifical chemical foods with unpronouncable names. Neither are they designed to sit all day.
Cardinal rule: Do what our bodies are meant to do and avoid what our bodies are not designed to do. Eat food that humans have been eating for centuries with known benefits, like fresh fruits, vegetables, grains and meat from organically raised lifestock. Avoid artificially created or processed food. Exercise.

Basic principle: As humans progress, markets grow (over the long-run)
Cardinal Rules: Invest in low cost broad index funds, diversify, and minimize cost of investing.
As long as humans have needs and our population is growing, markets will continue to grow to satisfy our needs and wants. So markets will continue to grow in the long run. There will be hiccups in the middle like the Great Depression but they are corrected in the long run. By putting your money in many different baskets, you ensure that your losses in one will be offset by profits in others, and you will profit over the long run. A financial manager's fee will only take away from this profit.

Think for yourself by:

  1. researching and becoming well-informed
  2. asking for advice from qualified, sincere, and honorable people
  3. evaluating advice to ensure it is good advice and suitable for you
  4. finding the basic principles and using the cardinal rules

Please feel free to publish this article, free of charge, as long as this resource box is visibly published. Copyright Nazim Rahman (c)

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