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Gathering and processing data is a fundamental way we make investment decisions
You may like the doctor but not the hospital: which is more important for you? Does traveling to the hospital we prefer mean that we have to lose money because we take more time off of work? If so, what effect will that have on your end-of-month cash flow? Does it matter for this procedure? How much of an effect will it have—these are all value-based decisions because we can assign a cost/time/reward to them. Once we can compare these variables through a dollar-defined lens, we can begin to make more informed choices. And more informed choices mean
1. We have identified the costs and rewards of each choice we make.
2. We are responsible for the choice we make.
3. We understand that each choice may have a consequence, positive or negative.
4. We are willing to assume the consequence and have a plan to deal with it.
5. We are in control of the situation.
Being in control means that we have done as much as you can to remove surprises, and you have contingency plans for unexpected consequences. You are prepared. You may not be able to anticipate every possible consequence, but, nevertheless, you are taking a proactive approach and managing as much as you can.
|Jennifer Mathes, Ph.D.|