Warren Buffett has often talked of how his mistakes of omission have actually been far greater (in terms of the cost to Berkshire Hathaway shareholders) than his mistakes of commission over the years.
Breaking it down, a mistake of omission is when you fail to act on good information. You don’t do something you should have done.
A mistake of commission is the opposite. You act on information. You do something you shouldn’t have done. You do something wrong.
A mistake of commission is easy to point to and see an error, especially in terms of investing. You can point to a bad investment and actually calculate the loss.
However, a mistake of omission is much more difficult to point to, especially in terms of investing. That’s because there’s no investment loss, since there was never an investment in the first place.
To clear things up, Buffett points to a number of investments he didn’t make – like a Dallas-Fort Worth NBC station for $35 million – to be worse mistakes in terms what he know he could have made off of them, than the bad investments he did make and what the calculations come to when he looks at actual losses.
I certainly have my own mistakes of both omission and commission on the investing side of life, but I actually want to discuss this dynamic in a very different sense today.
I believe when we’re one day old and dying, looking back on our lives, we’ll come to see our mistakes of omission as far bigger regrets than our mistakes of commission.
And I think recognizing this while we’re still young enough to act on it and correct that behavior is invaluable.
Mentally Moving Through Time
If this is an eventuality, or at least has a high likelihood of coming to pass, we should do what we can to identify this behavior and correct it in real-time, before the current moment passes and becomes the past.
We should try to see our lives as a much older version of ourselves would, then aim to behave and correct mistakes as that older version would love to (if they could travel back in time).
One of my favorite things to do is imagine my life from today until my death. I then discount that time back to today, sum up my moments, and try to make the best of it all. Said another way, I try to reverse engineer my way to an eventuality that I deem to be more than satisfactory.
My mind thinks in the very long term. I have a rough idea of what I’d like to be doing when I’m 40, 50, 60, 70, and even 80.
But if I want those future timelines to line up at least somewhat accurately, I have to make the right moves today.
This is a concept I’ve talked about when I’ve shared how I actually saw a future version of myself that was financially independent.
Well, I use this trick all the time, except I now use it for purposes other than to simply see myself financially independent (because I’ve already become one with that future me who I knew was already financially independent).
I now try to move my mind into the future to see what else the future version of myself is up to, and then I reverse engineer my way there to make it so.
When I do this mental exercise, I’ve come to the conclusion that the future me will actually not have any regrets in terms of mistakes of commission.
Mistakes Of Commission
And that’s because we learn and grow from the mistakes we make. We’re not perfect beings. We’re not celestial. We’re not machines. We do not have omniscience.
In the end, we’re the sum of all of our moments, memories, and experiences. That is life, my friends.
A big part of that sum is, of course, the mistakes we make and learn from. We cannot take action without making mistakes. There are good odds of failure in most endeavors we choose to take on in life. To regret mistakes of commission would be to regret life itself, in my opinion.
I wouldn’t be the me I am today if it weren’t for the mistakes of commission I’ve made. If I were to be unhappy with the mistakes I’ve made, through regret, I would thus be unhappy with the person I am today. And since I’m not unhappy with who I am, I have to accept the bad with the good.
It’s a yin and a yang that requires a balanced outlook and disposition toward mistakes. We cannot have victories without losses, nor can we take action toward victories without accepting a high degree of likelihood that a loss will occur.
Furthermore, to see mistakes as failures is wrong. Success cannot happen without making mistakes along the way, and so to see mistakes as failures means you fail before you even begin. That’s true failure, which happens without making a mistake.
Of course, it’s better to learn from the mistakes of others than to learn from our own mistakes.
I’d much rather see someone else do something dumb and learn not to do that, than to do something dumb myself and get burned. But human nature is such that we sometimes have to feel the burn for ourselves so that we know to avoid the heat in the future. To not accept this, and to not accept mistakes of commission, is to not accept my own humanity.
In essence, what I’m saying here is, I don’t actually look back on any of my mistakes of commission with a sense of regret, for to pick and choose is impossible – we must take the whole of actions and reactions, and the learning that occurs through being human and making mistakes along the way.
I cannot regret actions I’ve made without regretting who I am, for they’re one and the same. I am the sum of my actions (and mistakes).
However, I think if regret is possible to have one day, way down the line, it’s in the mistakes of omission we make.
Mistakes Of Omission
These are the things we don’t do, that we should have done.
Why don’t we do these things?
Well, the most obvious answer is fear.
We fear repercussions. We fear making mistakes. We fear reaction to our actions. We fear change. We fear upsetting the status quo, our families, or our friends. We fear not meeting expectations. We fear being judged.
We fear for the sake of fearing, instead of fearing fear itself.
This is often out of fear, but I also believe it’s also greatly out of consideration of money. An object in motion stays in motion. And people tend to continue doing what they do without thoughtfulness or introspection, which is a huge mistake. People try to live up to expectations that others place upon them, instead of being true to who they really are.
Once you solve the money angle, which is obviously a huge part of what FIRE is all about, you’re then free to conquer your inner fears and be the real you.
This combination of tackling money and fear, in my opinion, can help us avoid mistakes of omission.
My most recent example of mentally moving through time and seeing the oncoming regret of a mistake of omission (and doing my best to avoid it), is my indefinite move abroad in order to become a dividend expat.
Even though financial independence largely equals geographic independence, actually up and moving halfway across the world is far easier said than done. And that’s true even for a thoughtful guy like myself who embraces change and likes having an edge.
But as I sat and weighed out the pros and cons of living abroad, which required changing my entire thought process on what constitutes home, I started to see a big word flash inside my mind: REGRET.
I knew that if I stayed in the US – this would be against the conclusion of my own thought process change, which meant I’d be caving into fear – I’d be an old man one day, asking myself one basic question:
What if I had gone? What if I had experienced a totally new culture? What if I had went down that road much less traveled? What if my entire life ended up differently? What if I had just given the idea a shot?
But now I don’t have to await that old, bitter man who’s full of regret due to a big mistake of omission. I have my answers.
And they’re pretty great answers.
I’ve experienced reverse culture shock, what it means to be truly free, amazing food, awesome adventures, weight loss, and a totally new perspective on life, people, money, freedom, and happiness. I’m a changed person, for the better. And a best-selling book even came out of it!
Sure, you could ask those same questions on the other side of the fence, with a future version of myself wondering what if I had stayed in the US.
But that timeline is very easy to imagine, since all I had to was extrapolate out my current situation, more or less, into the future.
It’s not hard to imagine the future when you’re simply sticking with you already know. Wondering what might happen, for instance, if you stay in the small town you’ve known all your life doesn’t require a mental leap. There’s no mental leap because there’s no physical leap.
And instead of not doing something you should have done, you’re just not doing anything at all. So there’s no mistake of omission to point to and potentially regret.
Regret is something I’m actively aiming to avoid in my life.
And I do this, in part, by reverse engineering my way toward a life that I can actually see once I mentally travel through time. I see plain as day the me I know I can, should, and will be over the course of the passing of time.
But if there’s one thing I’ve learned when practicing this, it’s that there’s a much older version of myself out there that has come to see mistakes of omission, not mistakes of commission, as the true harbinger of regret.
Bronnie Ware, who for many years worked in palliative care, shared the #1 regret from the dying:
I wish I’d had the courage to live a life true to myself, not the life others expected of me.
As such, when faced with big choices in the future, I will always keep this in mind so as to avoid mistakes of omission. I may end up making mistakes of commission with this mindset (that I otherwise wouldn’t have made through inaction), but I’ve not yet come to regret one single mistake of commission.
When seeing life this way, you can’t help but win (even when you lose, which you most certainly will). It’s a true win-win!
What do you think? Is this a good way to look at, and avoid, regret? Do you mentally travel through time so as to reverse engineer your entire life?
Thanks for reading.
Image courtesy of: Stuart Miles at FreeDigitalPhotos.net.
P.S. If you’re interested in avoiding mistakes of omission, which is a far easier thing to do when you’re financially independent and can do almost anything you want, check out some fantastic resources that I personally used on my way to becoming free at 33!