Anticipating and planning for obstacles can sometimes be more powerful than adopting a positive mindset.
A positive attitude is important when embarking on any new endeavor. However, as you may have heard in previous episodes of Choiceology with Katy Milkman, overoptimism also can blind you to important information.
In this episode, we look at a strategy that can help counteract the effects of overoptimism and overconfidence. You could call it the power of negative thinking.
We begin with the amazing story of a lake in Louisiana that completely disappeared in a matter of hours. An oil drilling accident in 1980 created a giant sinkhole in Lake Peigneur that rapidly drained massive amounts of water into an active salt mine, swallowing several boats and barges and large chunks of land in the process. The event was catastrophic, but no lives were lost, thanks in part to robust emergency planning.
You’ll hear first-hand accounts of the dramatic event from Michael Richard, Sr., whose family owns and operates a garden and a nursery on the shores of Lake Peigneur, and from Dr. Kelvin Wu, who describes the scene in the salt mine as the disaster unfolded.
Dr. Kelvin Wu is a retired mining engineer and former chief of the Mine Waste & Geotechnical Engineering Division at the Mine Safety and Health Administration.
Michael Richard, Sr., owns and runs Rip Van Winkle Gardens and Live Oak Gardens on Lake Peigneur, Louisiana.
Emergency planning played an important role in the outcome of this disaster. But planning for the worst needn’t be limited to life and death scenarios.
Annie Duke joins Katy to argue that negative thinking—imagining failure in order to manage or prevent it— can actually help improve the odds of success when planning anything from a product launch to a birthday party. She argues that people shy away from negative thinking because it can feel unpleasant. But if you push through that unpleasantness, negative thinking can motivate you to take positive preemptive steps.
Annie Duke is an author and decision strategist. You can read more about negative thinking in her book How to Decide.
Finally, Katy differentiates negative thinking from pessimistic thinking. While pessimistic thinking can drain motivation and prevent you from setting goals, negative thinking can help you identify certain problems before they arise and raise your chances of success.
Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.
If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.
Important Disclosures
All expressions of opinion are subject to change without notice in reaction to shifting market conditions.
The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.
Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
The book, How to Change: The Science of Getting from Where You Are to Where You Want to Be, is not affiliated with, sponsored by, or endorsed by Charles Schwab & Co., Inc. (CS&Co.). Charles Schwab & Co., Inc. (CS&Co.) has not reviewed the book and makes no representations about its content.
Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.
Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.
Spotify and the Spotify logo are registered trademarks of Spotify AB.
(1021-1UD8)
To Fight Another Day: With Guests Alex Imas & Mary Stockwell
Choiceology's Guide to Better Decisions: With Guests James Korris, Carey Morewedge & Jack Soll
The Charmer's Playbook: With Guests Wilfred Webster & Daniel Read
Recipe for Success: With Guests Simon Rogan & Michele Gelfand
Take the Deal! With Guests Daniel Kahneman, Colin Camerer & Luis Green (Rebroadcast)
Top of Mind: With Guests John Farrell & Manasvini Singh
Repeat After Me: With Guests Jennifer LeMesurier & Tali Sharot
(BONUS) From What It's Like to Be … a Forensic Accountant
A Sticky Situation: With Guests Richard Thaler, Wendy Wood & Susan Budowski
Jumping to Conclusions: With Guests David Silbey & Ned Augenblick
No Mean Feat: With Guests Albert Chen & Elizabeth Tipton
A Cup of Knowledge: With Guests A.J. Jacobs & Steven Sloman
The Golden Misfits: With Guests Gary Lawless & Erika Kirgios
An Accidental Experiment: With Guests Steven Levitt, Solomon Ezra & Stephen Spector
The Superforecasters: With Guests Leon Panetta, Peter Bergen & Barbara Mellers
Survey Says: With Guests W. Joseph Campbell & Emily Oster
(BONUS) From Ripple Effect: Does Diversity Training Work? with Katy Milkman
Brave on the Waves: With Guests Bianca Valenti & Katherine Coffman
Fan Fictions: With Guests Hannah Sung, Crystal Tai & Anuj Shah
The Beanie Bandwagon: With Guests Robert Cialdini & Yemisi Brookes
Create your
podcast in
minutes
It is Free
Financial Decoder
Schwab Market Update Audio
WashingtonWise
On Investing
Giving With Impact