Loss Aversion and the Yong Tau Foo Team

As the year draws to a close, what are some of your thoughts?

Are you, like me, surprised that 2015 just passed by so quickly? Wasn’t it just yesterday we began the year with New Year resolutions? With a new resolve to do things?

What are some things you have done well this year? What can be better managed?

For me, it was a deliberate decision to update my accounts periodically and not wait until the day of tax is here!

Ever since we started OURF, doing accounts has been something I did not quite enjoy. Updating the various items in the income and expenses is a dreaded chore.

And when the day for submission for tax draws near, I just went into panic mode. The dreaded spreadsheet challenged me since 2008.

So in 2015, I thought it is high time I managed my compliance to a daily routine better. For a Fishball, being open and being kept “structures” free as much as possible are so important to me that the risk of “losing” this freedom sometimes causes a brain freeze for me.

So I decided to setup a simple structure to help me do my accounts regularly.

Instead finding it a dread, I told myself that I would be rewarded when tax day draws near. I will not need to go into panic mode. I can be confident.

If I were to be diligent enough to update the important details, I can even find out if I was overbuying something! (a very common fishball trait!)

I like to experiment and just yesterday as I was packing my cupboard, I found that I have so many different sizes of photo papers, empty cards, different sizes of plastic bags and other things that I have forgotten! The evidence was clearly staring at me in the face. I have simply forgotten that I have acquired them, so new ones are bought! Sometimes I bought something because they are too pretty. Sometimes, it is because they are cheap. And most times, it could just plain “I might need it someday!” and what a hassle to have to go down and buy again! Think of the petrol and time I can save:)

“In economics and decision theory, loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psychologically, as gains” – wikipedia.

Loss Aversion is a Cognitive Bias that all humans have and for a Fishball, setting structures remain one of the most challenging tasks to me. The perceived “loss” of being “free from structures” seems to outweigh the gains from having some structures in my biasness!

All Fishballs fight with this tendency to be less impulsive and complete what they have started out with…so as the year draws to a close, I am happy to say that at times I lost the “battle” with putting some structures in my life, but well, my accounts statement is almost ready for the tax year and it is not as nightmarish and scary as I thought it will be. In fact, I do like knowing how much I spend on art stuff, how much I spend on buying paints and yes, what income do I get from teaching and team building or art!

Who knows as I gain more confidence, I may even get rid of my “loss aversion” to structures by doing a pie chart of my expenditure and income!

So what are your challenges as you strive to develop and train yourself to be a complete Yong Tau Foo team?

Have a merry Christmas and a blessed New Year!

Paintings were done at Palais Renaissance, Orchard Road, Singapore. The little red dot:)

 

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