This is a topic that I haven’t divulged into yet but is an important one I think. If this term is new to you, a confirmation bias is basically when someone attempts to confirm or deny a particular belief by selectively focusing on proof that validates their view while neglecting or undervaluing information that would go against it. I guess something like a horoscope is the best example where if it said you are going to have a good or bad day then many people who strongly believe in it will tend to focus only on events throughout the day that supports it.
Just recently I was talking to some people who were very intelligent as it seemed like everything they believed in they would use a lot of facts, events and documentations to back up their points. Now one person I guess you can say is not someone who would like to take risks when it comes to money and is more comfortable with a 9 to 5 routine as that is the most predictable and comfortable choice for his lifestyle. That’s perfectly fine of course and I was interested in learning more if he had ever tried to supplement his income in a “risky†way outside of his regular work such as investing. He said no as based on what he has seen most things are beyond the reach of an average person to make something worthy to be considered a success and that if there does look like something that an average person could do there is always some kind of deceitfulness attached to it so it is better to be safe.
He then gave me examples of people that jump into a business or money making opportunity that looks simple enough and does not cost too much money initially. They are absolutely convinced that they will be successful too as they see so many other people around them who are apparently doing the same. The unhealthy thing was that they strongly believed that as long as they followed the program they would eventually get to where they wanted. Whenever something good happened, they treat it as a sign that it is working while treating all of the bad things as irrelevant circumstances that are too minor to say that something doesn’t work. The cycle keeps going as they invest thousands of dollars in say motivation material and again they do the same thing where they only want to remember the good that came out of it as oppose to the bad. They eventually end up in a financially unpleasant situation.
I then asked an interesting question to him where for all those stories and examples he was giving me of people failing as if the world was designed that way if he could also tell me a story he read of people trying something similar and being successful at without any outside factor other than working hard and being smart. My point was that another way of looking at it was that these examples could just be a case of people blindly believing that making money is effortless and just requires you to blindly do exactly what someone tells you to. He then reiterated his point on how the success rate is so small with most things that people who do well do have some kind of competitive advantage and so any positive examples that we can give are too small to consider as a valid point to possibly dispute it.
The highlight of the moment I thought was that I then asked how were the thinking of those people different than what he is doing now in terms of limiting his view towards one side without taking the other into account in a bias banner? There was no immediate answer and I then followed up by saying “Don’t you think by limiting your views on a specific side that you are also in a way losing money like those people as you are limiting your opportunities when it comes to ways to generate an income to things that don’t work?†That was the light bulb moment for him. I thought these scenarios were great as it showed two different ways on how having a confirmation bias approach can hinder your growth in whatever it may be and in these cases it just happened to deal with making money.
Like with the first example, I perfectly agree that you need to have a positive attitude as you need to remain focus in reaching your goal. However, just completely ignoring the other side of the story though is kind of dangerous I think as you are leaving yourself open to being taken advantage of by not allowing yourself to be fully educated about something. There is a difference between taking the bad and turning it into a positive and completely ignoring it all together. If you take both sides of the information into consideration and still decide for one way or the other then I think that places you in the best spot to make the best decisions.