Making good decisions isn’t easy, especially when it’s hard to know what information to trust. In an ideal world, we could trust the information we hear from friends and from the news. But the media likes to cover the rare and shocking, not the common and routine. A plane crash halfway around the world (a highly uncommon occurance) can seem as likely as a car accident down the street. This distortion skews our perspective, creating a big gap between what we think is likely and what actually is.
Nassim Nicholas Taleb has a smart way of knowing what really matters—he calls it “Skin in the Game.” In his book by the same name, Taleb explains that people with something at stake usually offer the best information. It’s simple: when you stand to lose, you’re going to think carefully. But when you’re insulated from the consequences, it’s easy to toss around advice or make bold predictions because they sound good, not because they’re giong to work.
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