In Uncertain Times, Let Reason Guide Your Decisions

In moments of uncertainty, when anxiety takes over, the worst thing you can do is let emotions dictate all your decisions. Emotions are powerful, but when they’re the main driver, they can lead us astray, especially during high-stakes moments.

We tend to get scared easily because the media thrives on capturing our attention, and attention is often driven by emotional responses. Let’s be honest—how many people can focus on something boring for a long period of time? The brain simply won’t allow it; it’s wired to conserve resources for more pressing matters. For more insight into how our brains make decisions, I highly recommend reading Thinking, Fast and Slow by Daniel Kahneman. The book delves into the two systems that drive the way we think: System 1, which is fast, intuitive, and emotional, and System 2, which is slower, more deliberate, and logical.

We've been conditioned over time to make emotional decisions. After all, who wants to deal with all the "boring" details when we can go with our gut, right? Wrong. Fear creeps in so easily because we often aren’t informed. We don’t ask the right questions, and the reasons for that vary—from lack of knowledge to lack of confidence.

To underscore the importance of asking the right questions, I’d remind you of the iconic speech by John F. Kennedy: “Ask not what your country can do for you – ask what you can do for your country.” This speech, delivered in 1961, encouraged Americans to take responsibility for their actions and engage in public service. In the same way, I urge you to take charge of your decisions by staying informed. (Link to the full speech here: John F. Kennedy's Inaugural Address)

Now, let’s assume you're a veteran trying to build a business or simply survive in today’s landscape. Where should you turn for reliable, rational advice—especially when it comes to finances?

Not necessarily to official sources. Often, you won’t get the depth of understanding you need. Consultants, brokers, or financial advisors might not always have your best interests at heart. My grandfather used to make me do all the farm work and repairs myself, no matter how small or big. He would say, "It’s not that I want you to do this forever, but you need to understand the process and the numbers. That way, you can ask the right questions and negotiate."

The lesson here is clear: you have to educate yourself.

Where to start? Begin by checking benchmarks and financial indexes, like those from PayNet by Equifax. PayNet offers insights into small business credit performance, a valuable indicator for your own business. Similarly, explore the data available at the Risk Management Association (RMA), which provides industry standards and benchmarking data for various sectors. Although much of this information isn’t freely available, even the basic details can be helpful in making informed decisions.

You should also keep an eye on the Federal Reserve and prime interest rates, which are key factors influencing lending and borrowing costs. As of September 17, 2024, the federal funds rate is in the target range of 5.25% to 5.50%, and the prime rate stands at 8.50% . This data gives you an idea of the cost of capital and how it might affect your business financing.

It’s not easy, but you have to start somewhere. Step by step, you can educate yourself, make smarter decisions, and—as JFK might say—ask not what others can do for you but what you can do to take control of your financial future.

You’re an adult with the capacity to learn and master incredibly complex knowledge. With the right mindset and education, you can understand the basics of micro and macroeconomics. Most importantly, when your business is on the line, learning to navigate financial intricacies becomes more than just a necessity—it’s the key to survival and growth.