The Power of Perspective

Have you ever noticed that everyone driving slower than you is an idiot and anyone going faster than you is a maniac?

This is what psychologists refer to as naïve realism.

We don’t see the world as it actually is. Rather, we see it through our own unique lenses of experiences, attitudes, intentions and beliefs.

In other words, we all see the world as it appears from our own perspective.

So, when disagreements occur, the all-too-common response I hear is “I’m right and you’re biased”.

That’s naïve realism speaking.

In reality, we’re all biased. Everyone. You. Me. All of us.

You? Yes, you. I am too. I mean, we try – but neither of us fully understand why others think differently than we do.

“Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works”.

We’re all biased to our own personal history.

***

Forty percent of Americans say they wouldn’t be able to come up with $400 in an emergency.

Yet, the lowest-income households in the U.S. spend an average of $412 each year on lottery tickets – four times the amount of those in the highest-income group.

So, why in the world are these people wasting their money on lottery tickets? No wonder they can’t come up with $400.

I’ll admit, I’ve certainly thought this. It sounds crazy to me.

But – maybe, just maybe, instead of automatically assuming these people are wrong or misguided – maybe it’s me, albeit innocently, that’s out of touch.

As Mark Twain said, “If you hold a cat by its tail you will learn something you can’t learn any other way.”

I’m very lucky.

Those that grew up extremely poor experienced things that someone like me never will.

And different experiences lead to different views. These views shape and define our current beliefs.

While my thought is, “why would you waste your money on a low percentage chance at winning the lottery?”, their thought could look something more like this:

"We live paycheck-to-paycheck and saving seems out of reach. Our prospects for much higher wages seem out of reach. We can't afford nice vacations...Much of the stuff you people who read finance books either have now, or have a good chance of getting, we don't. Buying a lottery ticket is the only time in our lives we can hold a tangible dream of getting the good stuff that you already have and take for granted. We are paying for a dream, and you may not understand that because you are already living a dream."

I hadn’t even thought of that perspective before. Why? I hadn’t lived it.

No amount of studying or listening will allow you to fully understand what it’s like to be in someone else’s shoes. Some things, it turns out, you just can’t learn from others. You have to experience it.

Just as why I couldn’t understand why some residents of New Orleans didn’t evacuate during Hurricane Katrina – my perspective was influenced by my own reality.

Sure, my family would pack up the car and drive north to safety. But…if you had no car to get you out, no out-of-town friends or family to stay with and no money to spend on a hotel...what choice did you really have?

***

So, instead of arguing with those whose views we think are wrong, perhaps we’d all benefit from trying to understand how their past experiences led them to these different views.

I’m not saying we have to agree.

But if anything, maybe we’ll gain an understanding of why they think this way.

Because after all, we’re all biased – through no one’s fault, but the luck of our own experiences.

***

As the joke goes, the man on one side of the river shouts to the man on the opposite side and says, “how do I get to the other side?”

The man responds, “you are on the other side”.

Different experiences lead to vastly different views.

Consider all of them.

After all, to that “maniac” driver, you’re the slow idiot.

Ever think of that?

*both quotes are from Morgan Housel’s book, Psychology of Money