Spring cleaning is just around the corner for many, but being that I live in Tucson and we are pretty much in Spring from January-May my wife and I got started early last week. We never feel as if we keep too much stuff around, but that hypothesis was once again tested (and proven false) when we started going through the closets.
For example, I’ve held on to my one green shirt for about seven years now so that I have something for each St. Patrick’s Day. This actually seems like a reasonable decision each year until I remember that I haven’t left my house on St. Patrick’s Day for about the last eleven years. I also have a ping pong table top (just the top, it has no legs) that I refuse to get rid of on the idea that I’ll eventually….put legs on it, I guess? I’m not really sure.
I would do myself a tremendous favor by asking a simple question: If I didn’t own the green shirt or the ping pong table top would I purchase them today? The answer is no, of course. An objective person would tell me that’s reason enough to pull the trigger and get rid of them, but I’m not an objective person when it comes to my own things. I can come up with multiple excuses: “I’ve had it for so long I might as well keep hanging on”; “This is the year I actually use it”; “A ping pong tournament on St. Patrick’s Day is a great idea!” My examples here are relatively harmless, of course, but I come across these same principles all the time when people are making big financial decisions.
The clearest parallel is when someone holds on to an investment that they either bought a long time ago or inherited. Ironically, it’s typically one of two excuses for holding on to an investment even when it doesn’t fit the plan going forward:
- “It’s done so well for me, though, that I just really want to hang on and see where it goes.”
- “It’s done poorly. I can’t sell at a loss. I just want to hang onto it until I get my money back.”
Interesting how two wildly different experiences result in the same conclusion almost as if there is something else going on here…we aren’t good at letting go!
I’m reading the latest Michael Lewis book, The Undoing Project. He relays an anecdote in the beginning about the Houston Rockets professional basketball team. They were offered a trade in which they would receive a valuable draft pick for one of their players and most of the brain trust was struggling to reconcile giving up a player they all really liked professionally and personally. Finally someone in the room reversed the question and asked if that if they had the draft pick would they offer it for the player in question. The answer was a resounding no. By reversing the question, they were able to remove emotion from the decision and be much more objective which is a good lesson for all of us.
Having said that, of course, I will continue to stare at my ping pong table top and dream of putting those legs on it one day—it’s totally going to be worth the wait! Screw objectivity!