Ep 43 The Opportunity Cost of Confidence
If you're smart and work hard, but just aren't where or who you want to be, welcome to your podcast, Real Confidence. I'm your host, Alyssa Dver, and I'll be sharing a bit of brain science, some surprising social secrets, and a touch of tough love. Why? Because I believe confidence is everyone's fundamental right and choice. So, let's get to it.
Alyssa Dver:
Look, I went to a really good business school and learned all kinds of skills, how to read a profit and loss statement, how to do a business plan, all those things that you would expect. There was one concept that I learned that by far has really shaped my life. And you know what it is, but you probably never really appreciated it, as it applies to everything in life. And that is this concept of opportunity cost, opportunity cost. So, from a business perspective, if you think about it, you always have limited resources, limited time, limited money, maybe limited talent, limited access to particular assets you need, or raw materials. And so, you look at that pool of resources and say, if I do this thing, perhaps acquire that company, then I can’t acquire this other one. And you're theoretically trying to evaluate what the best decision is, given your options and given your limited resources.
Think about it in terms of investment in anything, right, you can take the money that you have for investing, and do stock A, stock B, stock C, bond D. And again, there's this activity, that whether it's conscious or subconscious, happens to make the decision, what is the best thing to do relative to what you got to do it with? Now, let's apply that to something that's a little bit more fun. Let's talk about things like buying shoes. Should I buy these or those? Should I buy this house or that home? And your brain goes through lots of different permutations about the pros and cons? What would be advantageous or disadvantageous, depending on one or the other? You weighing them against each other? What about when you make decisions about how you're going to spend your time you decided to listen to this podcast, you could be listening to any one of millions of podcasts or doing something else with this time, but you made the decision to listen to the podcast as right now in this moment in time, this is the best thing to do for you.
Maybe you're even contemplating some days, should you be doing more work, or playing a game or exercising all these things, question the opportunity cost at that particular amount of time and energy you have. What about hanging with your kids going to go with your friends, you all these decisions that we make on an ongoing basis, you know, even on your birthday with all the Facebook people saying happy birthday, happy birthday. You know, they're making that decision, as are you to say thanks, or just even like what they're saying, right? We make those decisions constantly. Now, you can Google this up. There's all kinds of numbers, but there's some estimates of 30,000 or more decisions we make a day. And subsequently, each one of those decisions takes cognitive cycles. And we're making that decision about the opportunity costs of what we're about to say or do right. That's a lot of energy. That's a lot of time, that's a lot of neural activity. Now, some of it can maybe subconscious, you may not even realize you're doing it. But your brain is making that decision for you whether you realize it or not.
And when we have to make decisions that we're not 100% sure of or uncertain that we don't really know if it's the best use of our time, energy or money. That's what causes that amygdala moment that goes through, I might screw up if I make the wrong decision. I'm gonna fail. I'm gonna regret. God forbid if I'm rejected by my friends for being a bonehead. So, there is this constant check in with your brain to say this is the right thing to do? Is this something that is the best opportunity that I won't fail, regret or get rejected over it if I make the wrong decision? So that's going on all the time. It's kind of a background default process and whether you putting that conscious effort to make those decisions. What about if you're in a job and you’re miserable, because your boss is terrible toxic? Please listen to some of those podcasts because we've got some great tips on how to handle them. But needless to say, every time you say something or write an email, right, you're making that decision of is this going to backfire and bite me in the butt. And is there something better I could or should be doing or doing nothing at all, which is always an option too. So particularly when you're in a stressful situation, like a toxic or work relationship, or a toxic personal relationship, or anything else that's causing you stress and trauma, that opportunity cost calculation, maybe even harder to make because your brain is preoccupied, it has overhead, going to dealing with the trauma. So, you know, some days you can't make a decision when you want to eat for dinner. Again, it's over choice with decision fatigue, but it gets worse when we're tired, traumatized or otherwise stressed.
Okay, but let's go back to this idea of opportunity cost again for just a minute. Because one of the things that you really have to come to grips with as a businessperson, is that no matter how many analytics you have, no matter how much data or research you have, no matter how much time you allow to really boil, marinate a decision, the reality is, you're never going to know for sure. The reality is there's always a margin of error or standard deviation of possible ways that you are wrong. But in business, in particular, we go to great lengths to try and be as short as possible. In fact, we want everybody else's opinion in the company outside of the company. That's what often takes so much of this time, particularly in corporate environments, is to get enough information to make a confident decision. And again, a confident decision means we still realize that there is a margin of possible failure. And so that opportunity cost, that decision about what to do that's best at that moment with what you got, still may not be 100% guaranteed to succeed. Again, apply that to your life, that even though you're making a decision to buy a particular pair of shoes, or to date a particular individual or whatever it might be that provided you're doing enough thought around, I could do A or B, I pick B, I could do B or C but I pick B, then you should feel confident in that decision. Allowing yourself that standard deviation amount, that possible reality that it may not be in the end the outcome you want. But the decision is conscious. It is thought through enough given what you have in terms of time and information. And you feel confident that that’s the right decision. And in that moment, you have conquered this idea of opportunity cost, because you're making a decision of how you want to spend your time and money and energy.
All right, well, that, again, I hope is one of those theoretical concepts that you start to think about in your own life that says A- am I thinking enough about decisions in general, but am I thinking enough? Am I present enough with some of the bigger issues? Who do I want to have relationships with on any level? What kind of job or work do I want to do? What kind of parent do I want to be? What kind of friend do I want to be? And while you are making the decisions about how to manifest those things, to give yourself the compassion, of the possibility that even if you really make those decisions with total presence and consciousness, that we're human, we screw up. But the decision itself is a confident one. And you are working to make that decision, the best opportunity of all. All right, so theoretically, again, I want you to kind of roll that around in your head and we're gonna take a quick sponsor break, come back and I want to give you some very specific ways to literally manifest that we’ll be right back.
This podcast was sponsored by IT Cosmetics, a makeup and skincare company committed to helping all women do their confidence best. It Cosmetics campaign Confidence at Work provides free brain science based resources, including educational articles and videos developed together with the American competence Institute. It Cosmetics also partners with Kiva, an international nonprofit that directly empowers underserved female entrepreneurs. Please learn more at itcosmetics.com/confidenceatwork.
We're back. And we're going to talk about making opportunity cost really work for you, and how you can really think about this and make better, more confident decisions. So, to start us off, I'm going to break it into two different types of decisions. The first kind of decision that we typically make, I say, typically all the time, are ones that we feel confident. The ones that we say, yep, that's what I want to do. And I want you to ask yourself, in those moments, when you're like, I really want to buy those shoes. Or I really want to send this text to somebody, or, you know, I really want to tell that person off whatever it might be, you're making that conscious decision to do something, I want you to take a microsecond. And just challenge yourself why? Now, it's not to me kind of a naysayer or devil's advocate, what it is, is to really test and validate what is the value statement? What is the value that you are really leaning into that is making you want to do that? If it is something like vengeance, you might say, oh, come on, girlfriend, knock it off, that's silly. But if it's something that's justice, like, I really feel strong that I need to do this, I need to tell that guy that he's a jackass. You know, that may make you feel that much more empowered and confident to do what you're about to do.
So, opportunity cost, again, is a good thing. It sounds like such a negative thing when you phrase it like opportunity costs. But you know what, it is a good thing. When you take a moment and say, I'm doing this for this reason. There's other things I can be doing with that time and energy. But I'm choosing to do this because it's important to me. And you have to be honest with yourself, right? Of course, you have to say to yourself, I'm doing this, because I really want to set justice straight, as opposed to I really want to put him in his place. Right? So, be brutally honest with yourself, what's the cause? What's the reason that you're doing something and justifying spending, whatever that resources again- time, money, energy, emotional, cognitive cycles, and all that? So, you don't have to do it with every decision by any means. But every now and then see if you can stop yourself, kind of put a little speed bump in there. And go hmm, why am I doing this? ever write an email in a fury, like in response to somebody's other bonehead, email and then send it in later regretted? Well, yeah, so this is a great, great time where you can stop. If you're on fire, your fingers are on fire and that emotion is flailing at your amygdala, your cave person is coming out all over the place, take the email, put in drafts, sit on it, the world doesn't change like that in a couple hours, maybe even sleep on it overnight. let it brew, think through why you're doing this, what's the purpose? What's the outcome you want? Decide if it's the best way to handle the situation, if you even want to waste time on it, opportunity costs, maybe there's better places for that energy and that emotion. That's a really good practice to get into. So that's number one. Decisions that we feel confident are we're going to challenge ourselves, are we really feeling competent? Or we're just feeling pissed off? Decisions?
Number two, what about those moments, and these are probably more than the others for sure, where you're not sure you're worrying, you're waffling, you're nervous? And you're just not sure what to do. So, it could be anything again, it could be should I stay with this job? Should I stay with this person? Should I send this text? Should I call this person out? Whatever it might be, but you have that amygdala moment where you're like, I'm not sure what the right thing is? What is the right opportunity? What is the cost? That might happen if I do this or don't do this? Now, these are a little bit trickier. But the good news is they're a lot easier to detect, right? Because you have that amygdala, like moment of oh, no, no, I'm gonna do so brainstorm. Say, okay, amygdala, I hear you, that's my signal. I gotta sit down and brainstorm. Think about what my options are. What are the things I could do, instead of this thing that's making me a little unnerved. Now, a lot of times things that are nervous are just new. So, things that are new, sometimes we just have to take little bits of them or ask other people to give us some experiential feedback that they've had. There's ways that we can mitigate the fear of new, talk about that and another pod. But if you just be logical, or find a friend and say, look, this is wigging me out I just want to brainstorm some of the ways I can handle this or do this one of my options. You don't need 100 you just need two or three. And within those two or three do the opportunity cost jig, right? Like, okay, I could do A or B, or C. C feels better. And this is why. Okay, awesome. You are closing that standard deviation amount, you're closing the possibility that you're making a bad bonehead decision, because you at least thought it through and kind of weighed the obvious options to pick the one that you think is the right thing.
Now can you quantify the outcomes and the possibility risk and all that? In business we try. I will tell you, it's not even easy in business, let alone in personal life. But there is something that we have to our advantage. And we don't use it very much. And that's called our gut. And without getting too scientific on you, your gut has the largest neuronal pathway to your brain of any part of your body. It actually has a mind or brain of its own in many ways. And so, if your gut is saying, he really feels like that's the right thing to do, listen to it. I'm not saying act on it, but listen to it, listen to it, and put that in your pile of opportunity options. Just because your brain says it's nutty, does not mean it's to be ignored. Your belly has a lot of intelligence. So, listen to that. Give it permission to speak. And then again, factor it into the options in front of you.
So, here's the thing. I think a lot of people will take that indecision moment that amygdala chaos, and not just freak out, but go into kind of inertia, like go into this deer in the headlights, where you're not able to make a decision, you refuse to make a decision and you just fluster or just get all anxious, and, and don't do anything. That's the worst. To me that's the worst. That's the absolute worst cost of opportunity. Because here you are, you have an opportunity to do something and you're not doing it. Oh, don't break my heart, people. Take that moment where you are feeling unnerved, or you're feeling like you're not sure what the right answer is. Spend a minute, five minutes. Think through the opportunities, the different ways you can handle that situation, jot them on a piece of paper, if you're like me, I like to see things written down, make a mind map, talk to a friend, talk to the dog, lay out your options, and then pick the one that's best for you. Now, this is all based on the coaching methodology we do at the institute. And I promise you more than oh gosh, at least 100,000 people we've coached using this to such great success. And it sounds so simple and easy. But it's practical for that reason, and effective as hell. So, give it a try.
My friends in summary, for decisions that make you nervous, lay out a couple options, pick them out. Because opportunity cost is often what challenges our confidence each and every day several times a day. All right. Love to hear from you. Thank you for tuning in. Talk to you again soon.
So, before we completely wrap up, I want to let you know that full transcripts and show notes for this and other episodes can be found on the website, www.AmericanConfidenceInstitute.com/podcast. I also want to remind you once again that the best way to get confidence for yourself is to give it to others. And you can do it so easily just by liking and sharing this episode on your favorite social media channels. You can even give me some confidence fuel by sending in any comments about the topics I've covered, or ones you'd like me to consider for the future. So, for now, this is Alyssa Dver, thank you for helping to bring more confidence to the world.
This podcast was produced by Mindful Media. All rights reserved by Alyssa Dver and the American Confidence Institute. Music written and performed by Jeff Weinstein.
