Growing as a person while growing your assets!
The Personal Growth Series.
Introduction to the Personal Growth Series - feat. Splinterlands
One of the topics I enjoy reading about is Personal Growth. Chasing my best self is something that makes me wake up in the morning because I have so many flaws that this task will surely keep me busy for a lifetime or two.
The other thing that made me want to start this series is the fact that building assets within the Splinterlands’ ecosystem require a lot of patience and time. We do spend a good chunk of our time trying to grow our assets in this game, so why not find ways to grow as a person at the same time?
In this series, I’ll try to revisit a few concepts, I gathered through my personal growth journey, from a Splinterlands casual player’s perspective. By doing so, we will hopefully be able to learn, or most probably review, a few things while having fun together.
Coping with Regret
Daniel Kahneman, who won the Nobel Prize in Economic Sciences in 2002, explains that our fear of regret finds its roots in the presence of alternative realities. Each and every choice we make in life can lead to one path or another. When the alternatives turn out to be better than the reality we got into, this can cause us emotional pain.
- Alternative realities --> Fear of regret --> Emotional pain
Exaggerated Optimism VS Exaggerated Caution
Regret is an emotion that can hurt. Our natural human tendency is to avoid pain overall, so it tries to reject Regret, which leads us towards Loss Aversion. Loss aversion states that the pain of losing is psychologically twice as powerful as the pleasure of gaining.
In this case, we might become overly cautious.
On the other hand, people, who try to overcome the paralysis generated by Loss Aversion, might fall into the opposite side of the spectrum. Their exaggerated optimism can then lead to follies and make them take risks bigger than they probably should.
In this other case, we might become overconfident.
Thus, the question is:
How do we minimize Regret while still taking Action?
Regret, an integral part of the decision-making process
The first thing is to recognize that Regret is part of decision-making.
Let’s take the stock market as a quick example.
Unless we buy a stock at the very bottom and sell it at the very top, there will always be a better alternative reality! And, as most successful investors will tell you, timing the market is far from being a reliable strategy.
In Splinterlands’ terms:
Hoping to buy assets (cards or tokens) from the game at the very bottom and sell them at the very top would be equivalent to timing the market.
Once we accept that Regret is part of the game, we can now anticipate it and take steps to, hopefully, minimize it.
Anticipating the Worst Case Scenario
One of the methods I systematically rely on when making decisions is asking myself what would be the worst-case scenario in that instance.
In ”How To Stop Worrying And Start Living", Dale Carnegie presents the thinking process of an engineer named William H. Carrier:
- What is the worst that can possibly happen if I don't solve my problem?
- Prepare yourself mentally to accept the worst if necessary.
- Calmly try to improve upon the worst, which you have already mentally agreed to accept.
In Splinterlands, the worst-case scenario would be, obviously, to lose everything as the game goes out of fashion. In an attempt to mitigate this risk, I fixed a hard cap budget that I allow myself to spend within the game. Then, I split it between a Play Budget (mostly buying cards) and an Investment Budget (mostly buying SPS).
Sure, both will hopefully go up in value, but nothing is guaranteed.
We simply have to keep in mind that: we don’t know what we don’t know.
This hard cap budget helps me to avoid being too cautious, which would imply not getting involved in this space at all. And, at the same time, it makes me think hard before making any purchase decision as I know that my funds are limited.
A more subtle worst-case scenario in Splinterlands is when buying a card that might lose value over time. The game can still flourish, but if for some reason a card loses in utility, its value will inevitably tend towards its intrinsic value, which is represented by its DEC Burn Value.
This is one of the reasons why I always have a look at the DEC per dollar-cost ratio each time I am on the verge of buying a specific card.
Laying out the Options
When making a decision, we often have several options at hand.
Sticking with the example of purchasing cards, we always have a choice between a Gold Foil or a Regular Foil. Then, we might also want to buy an already combined card or several one BCX cards depending on our objectives. Finally, we might want to compare the price with the cost of renting as well.
By going through each option, we give ourselves a better chance of making the right decision according to our own situation.
Good Decision VS Good Outcome
By making decisions, or by purposefully choosing not to take definitive actions (which is still a form of decision making!), we impact how the Future will unfold. However, the thing with the Future is that we don’t truly know what it will bring. Therefore, there is always a degree of Uncertainty that will affect the quality of the outcome one way or another.
The distinction between Good Decision and Good Outcome is basically what the Stoics would refer to as “what is UNDER our control” and “what is OUT of our control”.
We should focus our mental energy on making Good Decisions with the pieces of information we have at that point in time. Things might unexpectedly change, but as long as we've made proper decisions based on what was available to us, no matter how things unfold, we give ourselves the best odds of experiencing peace of mind.
Illustration: My latest decisions in Splinterlands
Made $165 within a WEEK thanks to Splinterlands! [One-Shot Trade]
Leveling-up ONE of my Splinter with $100+ for the FIRST time! Here is why I flipped. [SPLINTERLANDS]
When making a decision, I always try to keep in mind that I can be wrong.
For instance, when I was trading Vouchers last week, I knew I was speculating on its price to appreciate once the announcement around the SPS validator nodes was going public. But, I also hedge myself in the case, I would be deadly wrong.
With $470, I put about 1/7 in Vouchers and the other 6/7 in SPS because I felt more comfortable holding SPS for the long run. In hindsight, I would have done much better by switching both positions. Nevertheless, at the time when I made my decision, I believe it was the right choice regarding both my circumstances and the pieces of information available.
If I had to sit on dozens of vouchers, I would have been okay knowing that there was a Promo card and, most importantly, the Riftwatchers edition coming along the way, which would have provided me with a way of using the Vouchers.
On the contrary, accumulating Vouchers in the hundreds would have not brought me peace of mind. In fact, my capped resources would at some point limit my ability in making use of that many Vouchers in the case I was unable to liquidate them.
In the end, the trade turned out to be alright. This is obviously not financial advice as it could have easily been the other way around, which is the reason why I usually avoid doing that kind of stuff. Even selling might not have been the best decision to be made when compared to all the other alternative realities.
To keep in mind:
The quality of an outcome is contrasted with a few other factors such as "time horizon" and " reinvestment vehicles".
The Regret Minimizing Framework
In conclusion, I would like to leave you with another framework that might help you minimize Regret in general.
The Regret Minimizing Framework from Jeff Bezos
“I knew that when I was 80 I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried.” - Jeff Bezos
I hope you’ve learned something, or at least, got entertained!
See you next week for another Personal Growth post.
Thomas
PS: I’ve just started reading “Decisive” by Chip Heath and Dan Heath to deepen my understanding of the biases that affect our decision-making process.
For new players interested in joining this amazing game, you can support me by using the following referral link (at no extra cost to you!):
https://splinterlands.com?ref=tt88
Thank you.