Recently, a lot of people have been asking me what THEY should be doing. Should I buy gold? Is now a good time to invest in real estate? Should I sell my investment properties? I’m a BIG believer in helping people “learn how to fish” instead of just giving them fish. I want to educate and EMPOWER you to make your own sound financial decisions. So, I’m pleased to give you what I call my “Investment Decision Matrix“. When you use my Investment Decision Matrix, you’ll NEVER feel like you’re making an emotional decision .. you’ll never hesitate, wondering “am I doing the right thing?” I can’t tell you how many hours of fear, emotion, and anxiety that this tool has saved me, and my high level clients. Honestly, I’m really proud of this little tool, because I know that it can help you make some very powerful and difficult decisions with clarity and confidence. Don’t be fooled by the simplicity of this tool. It’s incredibly effective, and allows you to make your decisions from a place of intelligence, rather than emotion. Enjoy the video, and please let me know what you think once you’ve watched it! ]]>
45 Responses
Greg, this is an excellent decision matrix! Thanks for sharing…
Greg, you’ve presented an absolutely tremendous concept. I can see however that you have to be very careful on deciding what scenarios you use so that the results are not skewed in one particular direction. For example, if you used deflation of 5%, 10%, and 20% while using inflation of 10% your results would favor the deflation scenario. Thanks so very much for sharing your perception.
thank you Greg for helping making conscious decisions and watching my back!!!
nice strategy! thanks
Aaarh Matey! Give me all yer gold doubloouuuns.
How does one know what to put in the grids? Liklihood itself is hard to determine with all of the conflicting information in thed marketplace.
Seriously tho, thanks Greg for your clarity and integrity. It’s rare to have an expert in business/finances explaining things of the market so clearly. And all in one uncut shot of 21 minutes! So pro. Perhaps you should team up with Max Keiser on RT.
How do you know what the % or possibility of that happening is……where do you get that info from? If is it based on your feelings how accurate would that be?
Excellent question. Probability based on feelings and belief is ridiculous.
I agree — and the point is that you have to educate yourself so that you can understand what’s driving the various scenarios.
It’s based on doing the research and learning – understanding the fundamentals of what drives economic elements, instead of relying on the media to educate you (which it does not do!) It comes down to taking responsibility for your investments, and realizing that until you learn what inflation, real estate fundamentals, economic fundamentals and other basic concepts are, it’s impossible to make intelligent financial decisions.
So one of the keys is putting accurate information into the grid. The old saying “garbage in garbage out” certainly applies to this grid, but preparation should be able to overcome
Absolutely – again, the whole point of this isn’t to expect “perfect” results, and it will depend on the assumptions and information you put into it. The whole point is to give you a system that you can use to remove a lot of the emotion. Doing it this way also forces you to really think about all the potential scenarios, as opposed to thinking in a black and white way (which is never accurate). It helps you lay out the spectrum of possibilities and then weigh those different scenarios all together, which leads to far better (and less emotional and fear-based) decisions.
It’s based on doing the research and learning – understanding the fundamentals of what drives economic elements, instead of relying on the media to educate you (which it does not do!) It comes down to taking responsibility for your investments, and realizing that until you learn what inflation, real estate fundamentals, economic fundamentals and other basic concepts are, it’s impossible to make intelligent financial decisions.
Greg, great simple tool! I love how it forces you to look at both the likelihood of something happening and the action steps. I can see how that would creates clear pathways without the emotional clutter that often clouds our decision making. This tool can be used in so many applications, including with my coaching clients who are making life decisions. I teach them to make decisions more quickly and this is a great tool to have confidence in the decision they choose! Thanks for sharing.
It’s a good rational analysis, which helps to
avoid from mistaken and emotional decisions.
Great tool! Very helpful for a current decision I wanted to take 🙂
Excellent demonstration; the only variable for me that doesn’t work is guessing at the liklihood of something happening. How in the world does one do that? That’s like trying to predict the future. I’d need a lot of data just to even begin to make a guess at the liklihood of something happening, because if you make very faulty assumptions/predictions, it pretty much makes your entire analysis practically worthless.
Yes, understanding the likelihoods is critical. But I laid out a lot of my basic thoughts in the videos I’ve posted – for example, why I think that gold and real estate make better sense than something like mutual funds or bonds. My goal here is to get people thinking (and realizing) that they need to take an ACTIVE role in their financial well being and that starts with basic education. The good news is that even if your estimates aren’t perfect, you’re going to be WORLDS ahead of where you would have been, had you not used critical thinking in drawing the conclusions of what to do.
Yes, understanding the likelihoods is critical. But I laid out a lot of my basic thoughts in the videos I’ve posted – for example, why I think that gold and real estate make better sense than something like mutual funds or bonds. My goal here is to get people thinking (and realizing) that they need to take an ACTIVE role in their financial well being and that starts with basic education. The good news is that even if your estimates aren’t perfect, you’re going to be WORLDS ahead of where you would have been, had you not used critical thinking in drawing the conclusions of what to do.
Very useful tool… For any kind of business.
Dr. Fedeerico Groenewold
Comonfort, Mexico
This is a great tool for investing your money AND your TIME.
Time investment is a better application for me personally because it seems I focus 80% of my time on developing ideas that produce 20% of my income. Using this matrix, it gives a clear picture of where I should focus most of my attention.
How do you determine the percentage of probability? You say there are no magic numbers, but these percentages that you come up with or the person comes up with is through a belief and how reliable is their belief to be translated into a number that they can depend on? This is the biggest question on everyone’s mind, I’m sure!
I agree. One of the main keys to this is to have accurate “guesses” in the grid; otherwise, the decision cold be way off base
I’m not saying that you just randomly guess. You have to take responsibility to start learning and educating yourself so that you understand what is driving some of the main elements of the economy. That’s in part what I’m trying to do here on the blog – give people some of the insight and ideas to make better decisions and estimates with.
I’m not saying that you just randomly guess. You have to take responsibility to start learning and educating yourself so that you understand what is driving some of the main elements of the economy. That’s in part what I’m trying to do here on the blog – give people some of the insight and ideas to make better decisions and estimates with.
I echo what Ckess58 says. Is there hard data or likelihood percentages that any of these scenarios will play out, and if so, where do you get this data? Or, is it based on your hunches?
You have to take responsibility to do research, learning and read. Follow people that know what they’re doing, and begin gathering your OWN information and assumptions so that you are not just doing what someone tells you. Just by being here, you’ve already started doing that.
Hi Greg, Very good concept, Thank you for putting this out. The only thing I would add is that if you have no clue as to what the probabilty is, then that in itself is an indicator (at least to me) that you should go and do the research, then come back to the Matrix. i.e. you don’t want too use this tool prematurely … would you agree?
Thanks again.
Sincerely,
Louis
London, UK
Absolutely – you need to gather your facts so that you can make intelligent decisions and estimates about what’s REALLY going on. But that is more than just reading the newspaper headlines and believing what you read.
Very good analogy to use in anything we don’t know what we should do. The only problem is not everyone is good at probabilities, unless you took statistics in college, or know what the economy will do in the next 12-18 months.
I didn’t take statistics in college. This has nothing to do with “being good at math”. It has to do with understanding critical things. Like, what does the U.S. debt really mean? What is inflation? When did the U.S. dollar stop being backed by gold? What causes real estate markets to go up or down (and it’s not interest rates by the way)? The key is to really understand WHY things happen they way they do. For example, gold is going to go UP in the short to medium term. Period. I’ve been saying that for 3 years, and I have been right. I know that because inflation IS alive and well, regardless of what the government wants us to believe. I know that simply by looking at basic indicators. So the point is, learn the basics of what drives the economic realities, and then you’re able to see what’s likely to come. You can’t predict every element of the future, especially when shocks come .. but you can make decisions that have a lot less risk, as opposed to just hoping you make the right emotional decision.
Thank you Greg, this gives me the confidence to make sound investment decisions. Perfect timing for me too 🙂
I loved this tool.
I will start invest my money very soon and will probably use this.
Thank you a lot Greg.
Fernando Arbex
Goiania, Brazil.
Greg,
Nice use of scenario analysis. I appreciated it.
Ckess58 asks the same questions (below) that I ask myself.
(My most astute financial investments include ‘The Authority Formula’, and books that help expand my mind, overcome obstacles, foster my talents, and enrich my life and the lives of others.)
Thank you Greg. One does indeed need to do the background research in order to come up with realistic percentages of possibility. Once you have that then you go with your gut feelings and take action
Hi Greg,
Thank you for this video … This is a very useful tool.
I’ll use it to decide if I should built my company.
In the case, what kind of outcome you will take to put % on it ?
Thanks
Brice
I think this response from Greg(see below)may be the most important concept most of us need to begin with: “understanding the likelihoods is critical…. My goal here is to get people thinking (and realizing) that they need to take an ACTIVE role in their financial well being and that starts with basic education. The good news is that even if your estimates aren’t perfect, you’re going to be WORLDS ahead of where you would have been, had you not used critical thinking in drawing the conclusions of what to do.”
Most of us need to jump in and do something, continue to educate ourselves as we go and as things change, and make adjustments accordingly, rather than over-react or be paralyzed by indecision. Thanks, Greg — I’ve sent this to a number of my contacts!
Amen! Thanks for the comment. 🙂
Greg every thing you put out make sence i wish i like to able to be in a room and just learn all of the teaching just to learn because knowledge gives me inner peace
Wow! Great tool, Greg. So simple and easy to understand. I can how this can apply to not only financial decisions but also to all small entrepreneur business decisions as well. | A follow up question to this video would be: How often have you been right in your % likelihood guesstimates of the different scenarios? And, could you tell us, have you ever been significantly off in your probability guesstimates? If so, why do you think that was? | Thank you for the great tips, Greg!
Wow! Great tool, Greg. So simple and easy to understand. I can how this can apply to not only financial decisions but also to all small entrepreneur business decisions as well. | A follow up question to this video would be: How often have you been right in your % likelihood guesstimates of the different scenarios? And, could you tell us, have you ever been significantly off in your probability guesstimates? If so, why do you think that was? | Thank you for the great tips, Greg!
Overly simplistic and misleading…there are many parallels to this in decision-tree models- many of them similarly appearing to quantify the unquantifiable and leading to exactly the wrong result.
Great academic response. Too bad you didn’t actually say anything that someone could take away and use! I’m not suggesting this is the only or best way to come to a decision – but for someone who has no idea how to make decisions, this concept helps people get over the paralysis and fear of making decisions, and making them from emotion.