Did you know golfers are more successful putting for par than they are putting for a birdie? The risk of not making par leads to a greater concentration on making the putt than the gain from the birdie.
Loss aversion can have a powerful psychological impact. It’s why we’re sitting at the casino and losing $100 has a more intense feeling than winning $100. It’s why when you watch interviews of athletes and coaches, you can see how much more intensity of emotion happens losing a game compared to winning a game. This psychological phenomenon exists because the intensity of feeling is greater losing something than winning something of equal value.
The question becomes, as we each strive for our better tomorrow, where can the idea of loss aversion become a decelerator in our progress?
When we challenge ourselves to do things we’ve never done before, the reality is there will be loss. If we strive for a promotion opportunity, there’s a chance we don’t get it. If we strive for better health, we may lose some of the guilty pleasures we love. There will absolutely be different versions of loss as we strive for something greater. Loss aversion can creep in at any time to provide the intense feeling of fearing loss taking our mind away from the greatness that can come with gains.
Loss aversion is not necessarily something that can be eliminated but it can be mitigated through perspective. If we’re pulled to the intensity of losing something, we naturally become more hesitant in trying something new that may heighten the risk of losing something. If we invest more time thinking through and understanding the benefits of the gain, little by little more perspective will creep in and push out the loss aversion mentality.
Perspective takes time to continue training the mind to take an optimistic explanatory view of the situation. The optimistic explanatory view helps build resilience by constantly circling back to focusing on the gain and momentum for your better tomorrow as opposed to being weighed down by a focus on loss.
Striving for our better tomorrow takes sacrifice and loss will come with this sacrifice. The question is will you let loss aversion stop you from challenges in life you know you need to take on? Or will the optimistic perspective persevere into providing enough why to risk loss for the gain?
Take your step: reflect on a part of your life you’re striving for a better tomorrow on. What challenges have you cautioned yourself or removed yourself from an opportunity to grow because of the fear of loss? Take time to reflect on where that hesitation is happening and push yourself to invest more time focusing on the gains that can happen. The optimistic explanatory view of why taking on those challenges for growth can help mitigate the intensity of loss aversion and build resilience as you continue striving for your better tomorrow.