When making financial decisions, aim to be reasonable instead of being cold rational
It is more realistic to have “reasonable expectations” of ourselves and others
It is also likely to stick for the long run
In finance, sticking around for the long run is more important than being right.
Minimise future regret
The strategy to be reasonable maximises for how well you will sleep at night.
It is designed to minimise future regret
Being reasonable in medicine
It is well known that fevers help in curing any infection. However, it does not give us peace of mind.
There is no one right answer
When dealing with complicated and emotional issues, there is no one right answer. There’s only what works for you and your family that leaves you sleeping well at night.
Hence, it is NOT necessarily a bad thing when there is a difference between what someone suggests you do and what they do for themselves.
Rational investor vs Reasonable investor
Rational investor makes decisions based on numeric facts
These are the factors that influence a “reasonable” decision maker:
Co-workers whom you want should think highly of you