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Wise Principles For Great Decisions

Updated: Aug 12, 2023

"The quality of your life ultimately depends on the quality of your decisions."

—Ray Dalio, Billionaire investor and author of Principles

We all work hard every day to create a better life for ourselves. But if we make poor decisions, then no matter how hard we work, our life will be miserable. Thus, we all need to learn how to make excellent decisions.

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What is the key to making good decisions? Wisdom. Wisdom to our happiness is like eyes to our body. If we lack wisdom, we may be working extremely hard but going in the wrong direction, and we wouldn't even know it. After a while, we're exhausted, on the wrong road, and didn't achieve what we hoped. Isn't that just terribly unfortunate and sad? Thus, wisdom is something we cannot neglect.

Ray Dalio gave many wise principles for making great decisions in his book, Principles, but he also encouraged readers to find principles of our own. It's been a few years since I read his book, and I have indeed found more wise principles for making great decisions.

In case you are curious, the principles that Ray Dalio gave in his book are

  1. Overcome your ego and blind spots

  2. Seek out credible and open-minded people to discuss with

  3. Remember the 80/20 Rule

  4. Navigate levels of a decision

  5. Make decisions as expected-value calculations

  6. Use principles to systematize decisions

I won't elaborate on them in this article because I've already done so in my book summary article. In this article, I want to share six more principles for making wise decisions.

These are by no means an exhaustive list, but knowing them could help you avoid a lot of unnecessary suffering due to bad decisions.

1: Focus on the side effects, long-term, and bigger group

This comes from the book Liao Fan's Four Lessons, which said:

"Do not just consider the present action, but also consider its side effects. Do not just consider immediate effects, but also consider the long-term effects. Do not just consider the effects on one person, but also consider the effects on the greater whole."

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Often, when people make decisions, they only focus on their desired outcome, and they forget about side effects (long-term effects and broader effects on others are both examples of side effects). This leads to narrow thinking that prevents us from seeing the bigger picture, resulting in poor decision making.

For example, a friend of mine started working at a summer camp, and at the beginning, she told me she was really tired and overworked, and that the food there was too spicy for her, which upset her stomach and gave her stomachaches. Eventually she started feeling sick.

I told her, "You should communicate these problems early with the school so that they can make adjustments accordingly. If they have enough people there, you don't have to force yourself to stay there the whole summer, right?"

She replied, "But I don't want to be a bother to them. Plus, I promised that I would work here for the summer."

In her mind, she thinks she is being considerate by not making requests to accommodate her individual needs, and that she is being trustworthy by trying to stay there the whole summer. But her kind intentions lack wisdom.

First, thinking long-term: she might be able to get by in the short-term, but if this accumulates and she gets really sick, the school would end up having to take care of her in addition to the kids, which is giving them more burden. Or she might have to leave the school to go to the hospital or return home. Then it would be hard for the school to find a replacement teacher on such a short notice. The school would get upset at her for not telling them about her problems early on so that they could solve it earlier.

Second, thinking for the broader group: if she gets sick, she might make others sick too. Or if she is exhausted, she might do her work sloppily, which then adds burden to other people and annoys them. After all, the school probably interprets the promise as having a healthy productive employee working there the whole summer, not a sick and tired person. Also, if the food is too spicy for her, it's possible that other people feel the same way, and if she spoke up about it, others might benefit too.

Third, thinking about side effects: if word gets out that she is very overworked and even got sick from working at that school, then people might criticize this school for not taking care of its staff, and people would not want to send their kids to this school in the future. Even worse is if the school gets blamed for abusing their employees when in fact she was the one hiding her symptoms. Then the school would be very angry at her.

From this example, we see how sometimes, we think we are doing good because we have a good intention, but our good intentions are too narrow-minded and short-sighted, resulting in long-term harm and negative side effects. Unfortunately, it's quite common to see people chase short-term gains at the cost of long-term sustainability, or do things without considering the impact on others or the potential side effects. Thus, they bring suffering upon themselves and others in the future. A wise person would think about the long-term, the broader group, and the side effects.

2: It's never just option A or option B. You can find options C, D, E.

Oftentimes, we think there are only two options. But we can use our creativity to think of other options. The key is to focus on the goal rather than on the method. It's just like traveling through a city; there are always multiple paths we can take to get from one place to another. As long as we focus on the destination and be attached to a certain route, we can always find other routes.

For example, I've recently been helping a couple English teachers with their classes. One piece of feedback they gave me was, "You give us lots of great ideas, but these all take time to lesson plan. We are so busy just trying to get the lesson done week to week, we don't have enough time to plan such an ideal lesson according to your standards."

It just so happened that one of the teachers had to take a break from teaching for a month, and the school asked me to cover her class. I said since I am covering her class anyway, I could take the other teacher's class too and just merge them into one class. That would give the other teacher a month off to lesson plan.

After teaching the merged class a few times, I told them, "It's definitely feasible to teach all the students in one class. The level difference is not that big of a problem. If you two merge the classes into one, then you could take turns teaching the class one semester at a time. This way, while one person is teaching, the other teacher can plan all the lessons for the next semester. This would free up a LOT of time for both of you."

My suggestion ended up becoming a big discussion topic, and we spent hours talking about the pros, cons, and feasibility of it. Essentially, they were worried about the extra time it would take to grade homework for the merged class, as well as the difficulty of teaching students of mixed levels.

We spent so many hours debating about whether to merge the classes or to keep them split, but later, I thought about the original goal, which is to give them more time to lesson plan, so I thought of another option.

I told them, "Since our goal is to give you guys more time to lesson plan, then another option is for you guys to keep teaching your separate classes, but you both do semesters. Right now you both teach non-stop for most of the year, so you never have a break to really calm down, reflect on how you're doing, and plan for the future. If you taught for a few months, then took a two-week break, that would help you a lot. This option has a lot of benefits with nearly no downsides."

We also discussed many mitigation methods, such as having stronger students tutor weaker students outside of class time to mitigate the level difference problem, and not giving individual homework feedback to every student to mitigate the workload problem. When we are focused on the goal and not the method, we can always think of extra options.

3: Consider all the factors to a goal and their relationships

Sometimes, when we are making a decision, we only see one factor, and we forget the possibility that other factors could be involved, or that one decision impacts multiple factors at once.

To continue the example above, the two teachers were concerned that merging the classes would increase the homework grading required, which would reduce their free time to complete other responsibilities. If you look at the decision's impact on just this one factor (homework grading), then yes, this is true. But we have to remember that there are other factors, and we have to look at the overall effect taking into account all factors.

I replied, "Yes it is true that you will have more students, which means more homework to grade. But you shouldn't forget that by having a merged class, you have a whole semester off to plan your lessons. That means when you do teach, you will spend a lot less time on lesson planning. You have to factor that in. So the main question is: Is the time you free up in lesson planning more than the extra time needed to grade homework for more students? This would be something you might have to experiment with to find out."

As we discussed more, we realized that our ultimate goal is not just to save teachers time, it's to increase teaching quality. In that case, spending extra time grading students' homework actually increases teaching quality, which means we should do it. Plus, there are many other factors we should discuss about, such as having a teacher development plan, making tailored learning plans for students, and providing extra help outside of class time. We shouldn't be tunnel-visioned on one factor and forget about the other factors.

4: There is rarely ever a perfect decision

Sometimes, we sink into analysis paralysis, where we just keep analyzing options excessively. One reason is because we are looking for an obvious best choice. But oftentimes, there is no obvious best choice, let alone a perfect choice. Every choice has their pros and cons, and every reward has its costs. If the analysis starts to go in circles, then it might be better to just make a decision.

If you feel like none of the options are good, then one way to reframe the idea of "I want to make the best decision" is to think of it as "I want to make the least worst decision." And remember: not making a decision is also a decision, and inaction has its pros and cons as well.

Moreover, we can always try a decision for a short time, gather new information, and then re-evaluate. It's just like if you are not sure a certain vegetable would taste good or not, you can buy a little bit to try first. If it turns out to be good, then buy more later. In the case of the English teachers, one of the teachers decided to try teaching the big class for a few weeks to see how it goes. If she finds it manageable, then the other teacher could try it too. If not, then we can discuss why, and if it really isn't suitable, we can just return to two classes as before.

5: When making decisions with others, factor in their feelings

As a very logic-driven person, I sometimes neglect others' feelings. But I ought to remember that the success of a decision is not just on how logical the decision is, but largely on the people who carry out the decision.

Even if a decision is logically the best, if the people who have to carry it out don't support it, then they won't try their best. When they don't try their best, the decision will not be carried out fully, and when problems arise, the person will say, "See, I knew it. This decision was not a good idea." It became a self-fulfilling prophecy.

If a decision wasn't logically the best, but the people really believed in it, then the people would work really hard to make it succeed and overcome all challenges. In other words:

A logically good enough option with strong support from the people is better than the best logical option with weak support from the people.

Hence, with those two teachers, I said, "Whether we merge the classes or not, it's most important that you guys feel happy with the decision. After all, you are the ones that have to carry out the decision. If you are unhappy, it will definitely reflect in your teaching quality."

Ultimately, when making decisions with others, it's very important to get other people's buy-in as much as possible. Obviously, in a large group, it might be impossible to get everyone's buy-in or to reach a consensus, but we should still do our best to show that we've listened to every perspective and thought about them thoroughly before making the decision. This helps everyone feel heard and respected, which would improve their acceptance of the final decision.

6: Make decisions from a calm and pure mind.

This final principle is the most important one. If we want to use any of the principles mentioned above, we need to first have a calm and pure mind, free from negative emotions and biases. Think about it: people who make bad decisions usually do so from an agitated or muddled state of mind.

Thus, before we make a decision, we should first ask:

"How is my state of mind right now? Is it calm, considerate, and peaceful? Or is it agitated, impatient, unhappy?"

The wise sages of the past taught that we all have innate wisdom, which arises from a calm and pure mind. In other words, even if we never learned the principles for decision-making mentioned earlier, if our mind was calm and pure enough, we would naturally make wise decisions that are in accordance with the aforementioned principles.

What blocks our innate wisdom? There's a Chinese idiom that says,

"Desire makes wisdom muddled. Self-interest makes wisdom dizzy."

(Original Text: 欲令智迷,利令智昏)

In other words, it is selfish desire. Think about it, why do people make stupid decisions? Because their desire to get a certain benefit is too strong, such that they can't think about long-term effects, broader effects, other options, or other people's feelings.

The stronger the selfish desire, the more tainted the mind becomes, and the deeper our wisdom gets buried. If we instead dim our self-interest and think for the greater long-term good, then we naturally end up benefiting ourselves and others.

For example, when my friend said she didn't want to tell the school that she wasn't feeling well because she didn't want to cause trouble, was that coming from a calm and pure mind without any selfish desire? I would guess that there was ego involved, and the ego desires others to think good of them and is afraid of others thinking badly of them. If so, then her mind wasn't calm and pure, so the decision probably wouldn't be wise.

Another example: when I recommended the option to merge the classes, was that purely to benefit them, or was there any selfish desire or ego involved? I would say it is purely to help them. I don't benefit at all from the decision because I won't even be there in the future.

Later, when they resisted, was there ego involved when I argued for its benefits? Perhaps I didn't want to be viewed as dumb for recommending a bad decision. When I considered this possibility, I immediately reminded myself to filter through the decision making principles to ensure that this was a wise decision and not one tainted by selfish desire. All humans have a strong ego, so we have to be very cautious and not deceive ourselves when inspecting our mind and intentions.

Using our logical mind to think about side effects, other options, other people's feelings, and other decision-making principles can help us to tame our selfish desires. But doing other activities to calm and purify our minds can help too, such as meditation, going for a calming walk, even taking a shower. It's not a coincidence that people get eureka moments in the shower…it's because their mind was really calm and pure in that moment, so a spark of wisdom came out.

There's an old Zen saying that goes,

"You should meditate for 20 minutes a day. Unless you're too busy, then you should meditate for an hour."

When I first heard this, I didn't understand. If I'm too busy to meditate for 20 minutes, why are you telling me to meditate for an hour? That would just make me even more stressed and more short on time. Later, I started to understand.

If our mind is so agitated from being so busy all the time, then our effectiveness in everything that we do would be low, and that would result in a downhill spiral. It's like trying to cut a tree with a dull ax; it's tiring and slow.

Sharpening the ax is analogous to purifying the mind. If we spent some time to meditate or do any activity that really helps to calm the mind down, then we would approach everything with more wisdom. One wise decision would save endless headaches from a stupid decision. Thus, if we can cultivate a calm and pure mind every day, and we can maintain this state of mind longer and longer, then we will see all things with more wisdom, and our quality of life will surely become better and better.


There are only a few things that can drastically improve the quality of our lives, and one of them is wisdom, which helps us to make excellent decisions. (In case you're wondering what are some of those other things that drastically improve our lives, the ones that come to my mind are relationships, virtues, and health, which is why I spend a lot of time learning about these.)

This article discussed six principles for making wise decisions. If you try them or have other wise decision making principles, I'd love to know. Thanks, and cheers to a wise life ahead!


Weekly Wisdom #250

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