W.I.T. #53 - Critical Thinking

Sometimes seemingly undeniable facts tell us only half the story. By thinking critically we can more reliably find the truth of the matter.

Three Things Worth Sharing

Are you in the top 1%? – The wealth needed to be in the top 1%, by country.

The fastest-growing high school sport in the U.S. – My sons just finished their first season of this, which might be why this article caught my eye. 

Don’t take more showers – "The reason people get good ideas in the shower is because it's the only time during the day when most people are away from screens long enough to think clearly. The lesson is not to take more showers, but rather to make more time to think." - James Clear, author of Atomic Habits.

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VIDEO TRANSCRIPT

John Scherer:

How can we do a better job of thinking critically when presented with a set of facts? That's what I'm thinking about.

So my idea for this episode came as my wife and I were talking with our sons. They've been asking about when they get their first cellphones. They're eleven and twelve years old now. And of course, “everybody” and all their friends have cell phones, right? And we know that's not true. We talk about this guy and that guy. Oh, yeah, that's right. Not everybody, right? But that time's coming. We’re trying to have conversations with them about some of our reservations and some of the things we need to be aware of as they start getting into that world.

And we're reading an article, and the gist of the article was not about cell phones specifically, but basically that social media is detrimental to mental health, right? There's studies that have come out saying that social media use has some negative impacts. So we had the guys read this article and we were talking about it with them and asked them what they thought. And there was one paragraph that caught my eye. I'll bring up a snippet here. You can see the highlighted area. A number of studies, 55 of them, say that there's a direct correlation between social media use and mental health issues. And then there were 11 studies that said that there was no issue or nothing was at least strong, right? 

And you look at that, okay what do you guys think about this? And right, boy, evidently, five to one, pretty overwhelming that social media is not awesome for mental health, right? But I asked the guys, think about this, and I said, you know, think about what the work that I do with our clients as well here is, what if I went to the boys and I said, look, here's this article, or they came to me, here's this article, here's this study, here's this study… six, eight, ten studies that say social media doesn't have a negative impact on mental health. You know, at some point you start thinking, well, geez, maybe that's the case.

But you don't know, if you didn't know about the other 55, you might make a different decision or come to a different conclusion, right? And I related that to work with clients is what if we come and have, here's this investment philosophy or this strategy and look, and here's a study that shows, and here's a study, and here, and after four, six or eight studies that show that this is the way to do tax planning, you start to think, well, golly, that seems to make a lot of sense, right? That's pretty overwhelming evidence, but, you know, not taking into account the other 55 things that show, hey, this doesn't really work, right?

And so I was asking and talking with my sons about, you know, what things, what things don’t we know when we're given a set of data, right? It can look overwhelmingly, in favor of this outcome based on this and they’re facts, perhaps, right? But what do we not know? What questions aren't being asked? What information is not in there, right? Not just the information we know, but what do we not know? What's possible, right? 

And as you think about those things, I think it really is helpful in making better decisions. So that's what I thought, it was really interesting. Wanted to share, interested in knowing what this brings up for you. As always, I want to share these things in, in the comment box below. Love to hear what you have to think. Shoot me an email directly if you'd like to as well. And as always, thanks for watching.

John Scherer CFP® is a fee-only certified financial planner based in Middleton, Wisconsin. John has over 20 years of experience advising clients on personal tax, investment, and financial planning. You can reach him by email at john@trinfin.com.