| Be aware of that large choices may in reality be small | | | | well and he is good money, but works long hours. |
| choices, and small choices may in reality be large | | | | He is making a big choice that looks like a small choice. |
| choices. | | | | The challenging part is that [until he talked to me] my |
| Buying a car is a small choice that just seems like a | | | | young friend didn't even know he was making a big |
| large choice. | | | | choice about his future without even knowing it. |
| Some people take weeks to decide which car they | | | | The fact he had made choices came out when I |
| will purchase. They check the reports, they do test | | | | asked him what his life goals were. It turns out he isn't |
| drives, they compare features, they do price checking. | | | | passionate working in his profession. To leverage what |
| The decision involves style, size, price, domestic or | | | | his education and efforts to date, he has a new goal |
| foreign, colours, options, and manufacturer. Complex | | | | to get an MBA on a part time basis and then run a |
| choices include deciding to move from one style to | | | | division of a company. This would allow him to |
| another, such as a car to a van, or a SUV to small car. | | | | leverage his professional training, while at the same |
| The other consideration is a new car versus a used | | | | allow him to do something he thinks he will be |
| car. And a lease versus a full purchase versus | | | | passionate about. A mature and well thought through |
| financing. These are the "logical" parts of the decision - | | | | concept. |
| add in the emotional part such as "How does the car | | | | Where was his big choice that he didn't know he was |
| make you look?" and you have what seems like a | | | | making? |
| large choice. | | | | He was choosing to continue working at this company. |
| Now lets consider if buying a car is a big choice or a | | | | Working for this company doing under his current |
| small choice. The choice of a particular car wasn't the | | | | contract was not helping him meet his long term goals. |
| real choice, the real choice Were they selecting the | | | | The long hours, the gym, and being comfortable meant |
| particular car or were they deciding what you wanted | | | | he had no time to do his MBA. With out going into his |
| out of a car and then selecting from the choices that | | | | personal details, the rest of his life was in a perfect |
| were available. | | | | position to do start the MBA immediately and start |
| It certainly has the feel of a big choice- its a large | | | | moving closer to long term goals. |
| amount of money. It will effect your lifestyle. When you | | | | Let's look at what it was costing him. (These numbers |
| use the car, its an irritant or an place of privacy. These | | | | are approximate reality and were chosen for easy |
| are immediate choices. And everybody "says" its an | | | | math - the actual numbers are even worse). |
| important choice. | | | | Working at this company, doing what he is doing now, |
| When time and risk are added to our decision making | | | | plus all the benefits, he makes $60,000/year. Working |
| the importance of the choice becomes smaller and | | | | at a different company, he would make 10,000. |
| smaller. For the majority of people, the purchase lasts | | | | Therefore this company is worth $10,000 extra a year. |
| three to seven years . When buying a new car, most | | | | At worst case it takes about 4 years part time to do |
| of the features, pricing, warranties, quality are similar | | | | an MBA. So switching companies for the length of |
| enough that there is little practical difference. The | | | | time it will take him to do the MBA, will cost him |
| shorter the average time you keep the car, the less | | | | (4×10,000) = $40,000 |
| warranties and quality impact you. Even if you are like | | | | Once he gets his MBA, his first year salary will |
| me and keep cars a long time, (mine is 10 years old) - | | | | immediately jump to $100,000. |
| warranties make a slight difference. | | | | Therefore, after year 5, he is $10,000 positive, and |
| If you know what you want in a car, a small amount of | | | | after year 6, he is $50,000 in the positive. |
| effort will ensure you end with a car that you are | | | | The bottom line, every year he delays is costing him |
| happy with. And if you make a mistake, its probably | | | | $50,000 and a greater risk that he won't be able to do |
| not going to be large and even if its large, it won't last | | | | the MBA because he won't be in such a good place in |
| very long, and there are many ways to get out of it. | | | | his personal life for the MBA. |
| The choice of a car is really just a large number of | | | | Once we had that discussion, being paid the hourly |
| small choices that reflect what you like, what will make | | | | wage, the gym membership and all the other nice |
| you feel good, and what will meet the majority of your | | | | things the company provided him didn't seem as |
| practical needs. | | | | important. |
| Buying a care is an example of a small choice that | | | | This is an example of a big choice masquerading as a |
| looks like a large choice. | | | | small choice. |
| Staying with a particular job is a large choice that looks | | | | What was different about my conversation? |
| like a small choice. | | | | I just asked a two simple questions. |
| I have a young friend (25 years old) who is doing the | | | | What are your goals? |
| practical work prior to receiving his professional | | | | How does what you are doing impact these goals? |
| designation. Lawyers, accountants, engineers, ect. all | | | | These two questions will help you decide if the choices |
| have to do this kind of thing. He likes the company that | | | | you are making are big choices or little choices. |
| he works for. Unlike other companies, they pay him for | | | | Selecting a car choice normally has little to do with |
| every hour that he works, they give a free | | | | your life goals but a lot to do with enjoying life. |
| membership to a gym that is on site, they provide | | | | Where you work and what you do when you work |
| coffee, soda, etc. for all the employees. They pay him | | | | has a lot to do with your life goals. |