Decision Journals and Framing Your Bets

Decision journals are designed to create a log of the decisions you’ve made and why you made them. To both capture a snapshot of your thinking at the start, then use the notes to improve your decision making process when you review it later.

I first heard about decision journaling when Ian Stewart pointed to a Farnham Street post a few years back. Then it came up again in late 2017 via Matt on the OFF RCRD podcast. I decided to take another look.

feedback-quality-on-decisions.png
Screenshot of the Farnham Street post about decision journals, highlighting the need for quality control of our decisions.

“You can think of a decision journal as quality control” for your decisions — yes, that fits my mindset. A quality check in six months or a year to prevent hindsight bias.

Here’s the Farnham Street template as a downloadable PDF: Decision Journal Template.

I haven’t made this a standard practice yet, probably because it feels like too much overhead. These days when reviewing success and failure I find myself reflecting back without a full picture of where my mind was at the start. What have a I learned in between? Will I repeat the same mistakes? How can I repeat the top bets that paid off?

For example, for a given decision, what do I expect to change? What am I betting on, and how will I know if I’m right or wrong?

In 2018 I hope to be better at stating my intentions ahead — taking the time to create the snapshot of my thinking at the start. Blogging this publicly to keep myself accountable for journaling the decisions at the start.


Bonus: Two recent mental models for framing your decisions as “bets” that I’ve come across, in case you find them helpful.

  1. Mind the Product’s bet matrix, via Brie Demkiw. “I bet that [this decision] will create [this outcome]. I’ll know I’m right when I see [this evidence].

    bet-matrix
    Screenshot of the Bet Matrix by Mind the Product.
  2. Ray Dalio’s expected value calculation in Principles (see my book review):

    Make your decisions as expected value calculations. Think of every decision as a bet with a probability and a reward for being right and a probability and a penalty for being wrong. Suppose something that has only a one-in-five chance (20%) of succeeding will return ten times (e.g., $1,000) the amount that it will cost you if it fails ($100). Its expected value is positive ($120), so it’s probably a smart decision, even though the odds are against you, as long as you can also cover the loss.

 

3 thoughts on “Decision Journals and Framing Your Bets

  1. Ray Dalio mentions something like this in his Principles book as well. He lists it as one of the ways he came up with his Principles:

    Slow down your thinking so you can note the criteria you are using to make your decision. 2. Write the criteria down as a principle. 3. Think about those criteria when you have an outcome to assess, and refine them before the next “one of those” comes along.

    I think I like Dalio’s method as well. To replicate it in my personal life I’ve started trying to write for 10 minutes a day about “whatever I’m thinking about” — more freeform than my current journaling practice — in order to do something like this. 10 minutes to figure out what I’m even thinking about and what decisions I’m making or have been making. (Sometimes habits form without even realizing it — you can surprise yourself if you look hard enough.) Then seeing what I can abstract out of there. Mostly personal, and mostly slow-going but I think it’ll prove valuable. It’s less systematic but then I also have my journaling and review system where I’m usually recording changes I make to my routines and habits. I haven’t had a chance to find something wrong yet in those decisions. That said, I’ve been looking at “safe bets” in my personal life (think exercise or journalling) but maybe something will turn up in my next quarterly review. 🙂

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