Algorithms and apps analyze data and tell you how to beat the traffic, what books to buy, what music to listen to, and even who to date — often with great results. But what do you do when you face the big decisions of life — the “wild problems” of who to marry, whether to have children, where to move, how to forge a life well-lived — that can’t be solved by measurement or calculation?
In this episode of The Agent of Wealth Podcast, the Bautis Financial team discusses the most recent book assignment in their monthly Book Club, Wild Problems: A Guide to the Decisions That Define Us by Russ Roberts.
In this episode, we discuss:
- What a wild problem is, and examples of wild problems.
- The concept of flourishing.
- How to “get over yourself.”
- Lessons we can learn – and apply to our wild problems – from Bill Belichick.
- And more!
Wild Problems: A Guide to the Decisions That Define Us | Bautis Financial: 8 Hillside Ave, Suite LL1 Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call
Welcome back to the Agent of Wealth Podcast, this is your host Marc Bautis. On today’s show, I brought on the Bautis Financial team – John, Kyra, and Kayla – to talk about the book Wild Problems: A Guide to the Decisions That Define Us by Russ Roberts.
This is the latest book that we read as part of our book club, and I picked it because it was on a summer reading list for financial advisors. A lot of people think that financial advisors only work on investment portfolios or creating financial plans. That’s still a big part of what we do, but we also add value by helping clients through problems that can’t be solved with a spreadsheet, algorithm or scenario plan.
The author refers to these major questions or issues as “wild problems.” These problems can’t be ignored, because they are crucial to who we are and who we become. Kyra, can you explain in more depth what a wild problem is?
What is a Wild Problem?
A wild problem is defined as “A fork in the road of life where knowing which path is the right one isn’t obvious, where the pleasure and pain from choosing one path over another are ultimately hidden from us, where the path we choose defines who we are and who we might become. Wild problems are the big decisions we have to deal with in our lives.”
Examples of Wild Problems:
- Whether or not to get married.
- Who to marry.
- Whether or not to have a child.
- What career path to follow.
- How much time to devote to friends and family.
- How to resolve daily ethical dilemmas.
These big decisions can’t be made with data, or science, or the usual rational approaches.
So, this book seeks to answer the question: “If the important things are hard to measure, and the measurable things misleading, what kind of decision framework is left?”
The book introduces the concept of “Darwin’s Dilemma,” which is essentially the focus of chapters two and three.
In 1838, Charles Darwin faced a wild problem: Deciding whether to marry – with the likelihood that he and his wife would have children.
To come to a rational conclusion, he made a list of the pluses and minuses related to the decision – and pros and cons list (to be married, not to be married).
Here’s an example of some of the items that made the list…
|Children (if it please God).||No children (no second life) no one to care for one in old age.|
|Constant companion, (& friend in old age) who will feel interested in one.||What is the use of working without sympathy from near & dear friends – who are near & dear friends to the old, except relatives.|
|Object to beloved & played with – better than a dog anyhow.||Freedom to go where one liked – Choice of society & little of it. Conversation of clever men at clubs.|
|Home & someone to take care of house.||Not forced to visit relatives, & to bend in every trifle.|
This exercise seems to be rational, as you’re making an estimate of the expected well-being of both options. From there, one would choose the option that has the best expected well-being.
Decades before Darwin’s marriage dilemma, Benjamin Franklin suggested a technique for making a list like this a little more practical. Once a pros and cons list is created, we can work to estimate their respective weights. In doing so, we can cancel out a pro and a con that are roughly the same magnitude. By doing so, we can find out “where the balance lies” and thereby “come to a determination accordingly.”
Russ Roberts makes the point that: “Whenever we can replace human judgment by a formula, we should at least consider it.”
Chapter three, “In the Dark,” opens up with: “When Darwin was trying to decide whether to marry, the information he really wanted was how his life would turn out if he decided to marry versus how it would turn out as a single man.”
At the end of the day, Darwin didn’t have enough information to make this informed decision… because the part of a marriage that is visible to an outsider is such a small part of the experience. It’s like deciding if we want to be a vampire… We have no idea what that would entail.
“He can’t imagine his daily life as a husband and father, particularly the upside, so he can’t assess whether the expected costs outweigh the expected benefits. But even if he could, he faces the vampire problem: how the experiences and the costs and benefits when he’s married with children will change. And finally, there are aspects of being a husband and a father that loom larger than just the everyday experiences of life (flourishing). How can he take that into account?”
Like Darwin, I use a pros and cons list a lot. However I didn’t use it to decide whether or not to marry…
Robert’s weaves the theme of flourishing into discussing wild problems. Kayla, what is this concept of flourishing?
The Concept of Flourishing
The idea comes from the ancient Greeks and it refers to a richer, more fulfilling way of life. Roberts emphasizes that it’s about taking the long view and doing what you’re passionate about – it’s deeper than looking at a pros and cons list.
Because Darwin was not married at the time, he is unable to anticipate things about being married on the pros and cons list. So, the downsides to marriage could easily outweigh the upsides.
Another example from these chapters is the author talks about going on a hike… It might be super strenuous as you’re going up, but worth it once you reach the top.
Russ talks about another person from the time period of Darwin, Franz Kafka, who is also faced with the dilemma of whether or not he should marry. Instead of just using a pros and cons list, Roberts talks about it using an example… Say you’re planning a trip to Rome, Italy. You probably have a rough idea of what you want to do on the trip, but you ask a bunch of different people who have been to Rome about their experiences, fielding recommendations. Everyone you speak with will give you a different answer. So, it’s impossible to plan something based on the input and experiences of others, because everyone is different.
He later talks about how wild problems all come down to one question: Who am I? The answer is obviously going to be different for everyone – what works for one person might not work for another.
Back to the example of Darwin and Kafka, he was saying how they each had their pros and cons to marriage, but each of them came to a different conclusion. Darwin ended up getting married and having a lot of kids and obviously had a great career that we all remember. And then Kafka chose to stay single and focused on writing, and everyone also knows his name. So they made opposite choices, but each of them flourished in their own way.
In addition to flourishing, one of the other principles of the framework that we can use to answer these wild problems is to not to look at ourselves as the center of everything. John, can you talk about how we can learn to get over ourselves?
How to Get Over Yourself
Well, as I was reading this book, I found myself looking back on my life and all the moments where I made big decisions. If I was to solely be rational, and decide based on a pros and cons list, putting myself first… I wouldn’t have been on the path I took. Decisions aren’t always rational.
I think having kids and being married are two very good examples of that. In this chapter, Roberts talks a lot about how our inner dialogue frameworks ourselves as the main character. That very well could be the case, but as you get married and start having kids, your mindset changes and you aren’t the main character at all – you get these feelings for your family that can’t be anticipated.
Part of what I think that he’s trying to say is that by considering yourself as a piece in this group of characters, you get more happiness because you include and consider others in your decision-making.
So you might want to work to reframe your mindset and “get over yourself.”
In this section, he uses a couple of examples: Friends, Love actually, and Seinfeld. In all of these, there’s no singular main character – they’re interwoven stories. That’s what makes them all such great stories.
Privilege Your Principles
From there, he talks about how we can live a more fulfilling life if we utilize this framework throughout life. He takes it a step further in the chapter, “Privilege Your Principles,” where he talks about ethical dilemmas being wild problems.
For example, let’s say you find a wallet that has $200 in it. No one saw you find it, and no one would see you if you kept the wallet and its contents. What would you do?
Roberts refers to a study that a high school did on this exact scenario. The students were asked what is the rational thing to do, in this case? Almost all of them said that since no one saw you, keep the wallet.
But, what the author says is that they failed to consider the pleasure most people would get from returning the wallet to its owner. For many, that pleasure is worth more than $200.
The idea that these ethical decisions are wild problems really resonated with me.
How to “Be Like Bill”
The book grew on me as I read it, and my favorite chapter was towards the end. Roberts talks about uncertainty and the future, giving strategies for dealing with wild problems. In doing so, he shares advice that we can learn from Bill Belichick.
Bill Belichick is the coach of the New England Patriots. He’s earned six rings, and he’s considered to be a genius. Belichick, and the team’s coaching staff, spend hundreds of hours preparing for the draft. They conduct personal interviews and watch thousands of hours of video – using a mix of qualitative and quantitative analysis to rank all college players. Then, they draft according to their rankings.
The system is really complicated, but the New England Patriots don’t actually believe that it’s a viable predictor of who’s going to be a good NFL player. So, what Belichick does is he values quantity over quality. He’d rather bundle up lower round draft picks for trades up in the draft, the reason being that there’s an enormous amount of uncertainty around any one individual. He worries less about getting the exact right player with any one pick. Instead, he chooses a lot of players. In doing so, the Patriots often have more picks than any other team.
Then, once the players arrive at training camp, he gets a lot more information about each player – more than he would have gotten from studying film or scouting. And once preseason comes along, he finds out how each players’ skills and personality will fit within the Patriot’s system, which is impossible to observe from a distance.
He also signs a lot of players after the draft, because those contracts are inexpensive.
All in all, Roberts gives us four things that we can learn from how Belichick approaches the NFL draft.
1: Optionality is powerful when you have the freedom to do something, but not the obligation.
Think of Zappos. We all understand the pleasantness of free shipping and free returns. You get the ability to change your mind once you get your shoes and wear them around the house. They might look comfortable, but until you put them on, you don’t really know.
Optionality should change your whole process of shopping: Buy more shoes, don’t agonize over each purchase and don’t waste time trying to get more information.
2: Don’t assume what works for you works for them.
Going back to Zappos when you can put your shoes on or test drive a car, surveys, asking people about their happiness, putting the shoes on tells you a lot more about how you’ll like the shoes or how comfortable they will be than reading a survey about it or reading about it.
3: Sunk costs are sunk.
Belichick doesn’t get embarrassed when a decision doesn’t work out. If the shoe doesn’t fit, Belichick doesn’t feel compelled to wear it. He’ll move on from one player to another.
Often we say, “I took the job, but it was a mistake,” or “I went to law school, but it was a mistake.” Robert says, “A mistake is ordering anchovies on pizza if you don’t like them. Life choices that turn out differently from what we hoped are not mistakes.”
4: Grit and persistence are overrated.
Robert says that it’s a bad idea to quit immediately because something is difficult or unpleasant. But he says that some things may never become delightful. If you hate law being a lawyer, change careers. It’s not a mistake, because you had incomplete information when you made that first decision. Like Belichick, cut your losses and move on. Be Like Bill:
- Date before you marry.
- Be an intern before you join a company.
- Hire an intern before you make a long-term commitment as an employer.
- Visit a place before you move there.
- Don’t finish every book you start.
A lot of what makes wild problems so painful is regret, but you shouldn’t have regret.
That sums up the chapter I covered, and the book. Everyone has their own wild problems, but if you’re looking for help implementing this framework, we’re happy to talk. You can schedule a free consultation with us below. Thank you to everyone who tuned into today’s episode.