How Hindsight Bias Can Bite You in the Butt!
Hindsight bias: what does that mean? It is a term used to describe a person’s overconfident view that they could have predicted the outcome all along. Or viewing a past event in a different light now that it is over. Like how I was screaming: I AM NEVER HAVING ANOTHER BABY during my labor contractions yet after it was over, thought: I CANNOT WAIT TO HAVE ANOTHER BABY. OK, maybe I can wait a little bit, so my husband doesn’t have a panic attack, but you get the idea. Just like when I was talking with my pregnant friend, who said, “I like being pregnant, but I am not someone who says I LOVE being pregnant.” And my response was, “those women who say they LOVE being pregnant have hindsight bias.” They forget the morning sickness that never seems to go away or the gaining weight and feeling fat part.
And I am one of those women, who now that it’s over, say ‘I love being pregnant’ even though I never even thought those words during my pregnancy. Now that it is over, all I think about are the good times, like when we found out she was a girl, and feeling her move for the first time, and the amazing feeling of never being alone. What I forget is how suffocated I felt at times, thinking I have MONTHS more of barely being able to breathe, let alone run, constant heart burn, and other stomach issues and nausea.
Now, let’s look at how hindsight bias plays out in the financial world. After a major market downturn, do you find yourself thinking: “I KNEW the market was going to go down”. Then why didn’t you sell all your holdings? Hindsight bias! Or “I KNEW the market was going to go up.” Yet, you invested extremely conservatively because you kept saying the market is making me nervous. Again, hindsight bias!
We tend to view things in the past in a different light. When you are going through something terrible, it feels unimaginably difficult in the moment, as if you will never be able to get through it. Yet, you do. You come out of it not just having survived it but THRIVED through it. You become stronger than you ever thought possible. Just like a friend and widow I write about in my book: Strong Woman Stronger Assets.
My friend and I were talking about life’s many changes and surprises. The women I primarily work with are going through a major life change, but it does seem that around every corner, we encounter yet another change. Whether it is a change we are going for, or not. For example, I went from being a married woman working in the family business, to being pregnant and going after my own business. And now I’m a mother. These are all examples of changes I went after.
On the other hand, my friend didn’t choose her changes. She went from being an employed married mom to an employed widowed mom to an unemployed widowed mom. Talk about high stress major changes in her life, all within 3 years. She was going down one path, when suddenly, she had to figure out a whole new way to live for herself and for her 2 daughters. Some people choose to let the past dictate the rest of their lives, and don’t allow themselves to move forward. My friend was not one of those people, and you aren’t either, or you wouldn’t be reading this.
If we let these roadblocks and forks in the road keep us stuck and not let us grow from having experienced them, then who wins? You always have a choice: you might not be able to choose to bring your husband back or your job back, but you do have a choice as to how you react to it. My friend stood strong, took control over the money and the house, and though she might not have believed she could do it at the time, she did it. She took action. She now has two strong adult daughters, with some grandchildren on the way, and an amazing marketing business she started all on her own. She chose not to live in the tough times of her life forever; she decided her life is worth living, not just for herself but for her daughters. They now have a role model to look up to, and their children will as well.
It wasn’t always easy for her - some family and friends said, “Oh you’ll find another husband to take care of you.” Well she didn’t want another husband, nor did she need one to take care of her. At first, she was scared, but she found she could do everything her husband did around the house and more. When we are put in a situation, we can either give up or thrive, and thrive is what she did.
We both came to a conclusion at the end of our conversation that if you decide your life is worth living and react encouragingly, then you can come out an even better version of yourself. Give yourself some credit, you CAN do it! I have faith you will get through it and look back one day saying to yourself, I did it!
What is the number 1 thing you want for yourself this year? Let’s make it happen together and not let hindsight bias sway you differently. Let’s just talk, have a conversation to see how we can get you living the life you want to live this year, TODAY!