Don’t Let Indecision and Overanalyzing Control You
A term people often use when they have a hard time making a decision is called “analysis paralysis.” Analysis paralysis happens to everyone, because we can all overanalyze a situation. And this constant state of being in our heads stops us from taking action.
Want more articles like this?
Create an account today to get BiggerPocket's best blog articles delivered to your inboxSign up for free
Not everyone can make fast, on-the-fly decisions, but that’s OK! We are going to talk about how to overcome analysis paralysis with a few simple tricks.
Trust Your Work
1 + 1 = 2, correct? This equation is true for the same exact reason that 2 + 2 isn’t 5. You may be asking yourself, what’s my point? As an investor you need to trust the numbers. You need to be confident that the knowledge you are applying is going to pan out in your favor.
I am guilty of analysis paralysis when I’m dealing with something new. Anyone who tells you that they didn’t have a stomach full of butterflies on their first purchase is probably full of something else… It’s OK to be nervous, but taking the leap is a major part of your journey as an investor.
If you do your homework and nail down your numbers, your odds of success are astronomically higher than if you jumped into something blindly. That should make you feel good!
Practice estimating repair costs before you have a contractor walk through a home and see how close you were. You can do it with anything, even an insurance quote. If your numbers are way off, then you know you need to do more homework.
But if you are right on, you know that whatever systems you are using are likely working. This will help you build confidence in your own systems and numbers, and help put your mind at ease knowing that you’re not far off from what you estimated.
Get a Mentor
Having a mentor can help relieve a major amount of analysis paralysis. It’s always helpful to run ideas by people that have “been there, done that.” Whenever I’m uneasy about a decision, I run it by a trusted mentor.
If they think it’s a good plan and don’t shoot it full of holes, it usually helps alleviate my mind. Find a mentor that you can trust, but most importantly, one that will be completely honest and not just try to pump you up.
Break Your Dependence
Once you set yourself free of the dependence for something, you free your mind to make decisions. If you are so dependent on the exact amount of your paycheck to live, you will never have that extra money to invest.
But if you live below your means, it frees you up to have some play money. If you can shape your finances to break your dependence, your analysis paralysis will start to lose its grip on your mind.
The “Storm Drain” Technique
Something that I do to help push my mind past analysis paralysis is picturing my life without any of the money that I’m planning to invest. What would my life look like if I just accidentally dropped $30,000 down a storm drain on my way home from the bank. Would my family starve? Would my wife leave me and go find someone that isn’t so clumsy? Probably not. I just mentally put that money in my “I seriously may never see this again” account.
If your life still works out just fine without that money, then you are probably pretty safe to start putting it to work. Adversely, if that money lost would crumble you financially, well, then maybe you are looking at putting too much into something.
We all feel analysis paralysis when we have something to lose. It’s a natural human reaction similar to fight or flight. We fear making the wrong decisions because we don’t want to lose something that we may or may not have.
That could be money, reputation or even a potential relationship. Whatever it is, it’s something that we perceive as valuable. If there was never anything at stake in a big decision, we would all probably make decisions willy-nilly, never fearing repercussion.
So what’s at stake for you when buying a property? Money is probably the biggest concern for people. They are afraid of losing it all, getting kicked to the streets, eating leftovers out of a dumpster, that sort of thing. We always jump to the worst case scenario with these things, when in reality our worst case scenarios are likely much less severe.
Sit down and have a hard talk with yourself and outline what it would look like if you lost everything you invested. Someday you will lose some money on real estate. I’m just going to rip off that Band-Aid now. It happens, but if you’re mentally ready for it, you can view it as a learning opportunity and continue to grow stronger rather than falling to the wayside like so many other investors.
I’m not telling you to go out and throw your money at something for the sake of investing. Like I said, do your due diligence and get as educated as you can before you jump in. These are just a few tips that have helped me along the way.
Analysis paralysis doesn’t go away—it just gets controlled. We always have something at stake, but the more you sharpen your mind and your finances, the better your will be at controlling it.
Do you have any tips for overcoming analysis paralysis?
I’d love to hear your thoughts—leave a comment below!