Hey My Dear Steemian Friends,
It might seem strange to claim that the pursuit of perfection prevents people from achieving their financial aims, but it’s true. Long-time readers know that this is a key part of my financial philosophy: The perfect is the enemy of the good.
Regret is one of the perils of perfectionism. There are others. Let’s look at why so many smart people find themselves fighting the urge to be perfect.
Maximizers and Satisficers
For a long time, I was a perfectionist. When I had to make a decision, I only wanted to choose the best. At the same time, I was a deeply unhappy man who never got anything done. Although I didn’t realize it at the time, the pursuit of perfection was the root of my problems.
In 2005, I read The Paradox of Choice by Barry Schwartz. This fascinating book explores how a culture of abundance actually robs us of satisfaction. We believe more options will make us happier, but the increased choice actually has the opposite effect. Especially for perfectionists.
Keep it simple is my philosophy. With this mindset, it gives you freedom, so much freedom with less to worry over or about.
Schwartz divides the world into two types of people: maximizers and satisficers. Here’s how he describes the difference:
Choosing wisely begins with developing a clear understanding of your goals. And the first choice you must make is between the goal of choosing the absolute best and choosing something that is good enough. If you seek and accept only the best, you are a maximizer…Maximizers need to be assured that every purchase or decision was the best that could be made. We are taught early on to strive for excellence.
In other words, maximizers are perfectionists. We don't live in a perfect world.
“The alternative to maximizing is to be a satisficer,” writes Schwartz. “To satisfice is to settle for something that is good enough and not worry about the possibility that there might be something better.”
To maximizers, this sounds like heresy. Settle for good enough? “Good enough seldom is!” proclaims the perfectionist. To her, the satisficer seems to lack standards. But that’s not true.
A satisficer does have standards, and they’re often clearly defined. The difference is that a satisficer is content with excellent while a maximizer is on a quest for perfect.
And here’s the interesting part: All of this maximizing in pursuit of perfection actually leads to less satisfaction and happiness, not more. Here’s what Schwartz says about his research:(
People with high maximization [tendencies] experienced less satisfaction with life, were less optimistic, and were more depressed than people with low maximization [tendencies]…Maximizers are much more susceptible than satisficers to all forms of regret.
Schwartz is careful to note that being a maximizer is correlated with unhappiness; there’s no evidence of a causal relationship. Still, it seems safe to assume that there is a connection.
A Trivial Example
At Camp FI in January, one of the attendees explained that he’s found freedom through letting go of trivial decisions. For things that won’t have a lasting impact on his life, he doesn’t belabor his options. Instead, he makes a quick decision and moves on.
In restaurants, for instance, he doesn’t look at every item on the menu. He doesn’t try to optimize his order. Instead, he makes a quick pass through the list, then picks the first thing that catches his eye. “It sounds silly,” he told me, “but doing this makes a huge difference to my happiness.”
For the past four months, I’ve been trying this technique. You know what? It works! I now make menu choices in seconds rather than minutes, and my dining experience is better because of it. This is a trivial example, I know, but it’s also illustrative of the point I’m trying to make.
Perfect Procrastinators
Studies have shown that perfectionists are more likely to have physical and mental problems than those who are open-minded and flexible. There’s another drawback to the pursuit of perfect: It costs time — and lots of it. To find the best option, whether it’s the top dishwasher or the ideal index fund, can take days or weeks or months. (And sometimes it’s an impossible mission.)
The pursuit of perfection is an exercise in diminishing returns:
A bit of initial research is usually enough to glean the basics needed to make a smart decision.
A little additional research is enough to help you separate the wheat from the chaff.
A moderate amount of time brings you to the point where you can make an informed decision and obtain quality results.
Theoretically, if you had unlimited time, you might find the perfect option.
The more time you spend on research, the better your results are likely to be. But each unit of time you spend in search of higher quality offers less reward than the unit of time before.
Quality vs. Time
Quality is important. You should absolutely take time to research your investment and buying decisions. But remember that perfect is a moving target, one that’s almost impossible to hit. It’s usually better to shoot for “good enough” today than to aim for a perfect decision next week.
Procrastination is one common consequence of pursuing perfection: You can come up with all sorts of reasons to put off establishing an emergency fund, to put off cutting up your credit cards, to put off starting a retirement account. But most of the time, your best choice is to start now.
Who cares if you don’t find the best interest rate? Who cares if you don’t find the best mutual fund? You’ve found some good ones, right? Pick one. Get in the game. Just start. Starting plays a greater role in your success than any other factor. There will always be time to optimize in the future.
When you spend so much time looking for the “best” choice that you never actually do anything, you’re sabotaging yourself. The perfect is the enemy of the good.
Final Thoughts
If your quest for the best is making you unhappy, then it’s hurting rather than helping. If your desire to get things exactly right is preventing you from taking any sort of positive action, then you’re better off settling for “good enough”. If you experience regret because you didn’t make an optimal choice in the past, force yourself to look at the sunny side of your decision.
Train yourself to be a satisficer. Ask yourself what “good enough” would mean each time you’re faced with a decision. What would it mean to accept that instead of perfection?
If you must pursue perfection, focus on the big stuff first. I get a lot of email from readers who fall into the optimization trap. They spend too much time and energy perfecting small, unimportant things — newspaper subscriptions, online savings accounts, etc. — instead of the things that matter most, such as housing and transportation costs. Fix the broken things first, then optimize the big stuff. After all of that is done, then it makes sense to get the small things perfect.
Practice refinement.
Start with “good enough”, then make incremental improvements over time. Say you’re looking for a new credit card. Instead of spending hours searching for the best option, find a good option and go with it. Then, in the months and years ahead, keep an eye out for better cards. When you find one you like, make the switch. Make perfection a long-term project.
Don’t dwell on the past. If you’ve made mistakes, learn from them and move on. If you’ve made good but imperfect decisions — such as the Money Boss reader who wishes they hadn’t saved so much in tax-deferred accounts — celebrate what you did right instead of dwelling on the minor flaws in the results.
Embrace the imperfection. Everyone makes mistakes — even billionaires like Warren Buffett. Don’t let one slip-up drag you down. One key difference between those who succeed and those who don’t is the ability to recover from a setback and keep marching toward a goal. Use failures to learn what not to do next time.
I don’t think perfection is a bad thing. It’s a noble goal. It’s not wrong to want the best for yourself and your family. But I think it’s important to recognize when the pursuit of perfection stands in your way rather than helps you build a better life.
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Credits: Images: deposit photos.
https://www.getrichslowly.org/perfect-is-the-enemy-of-the-good/