Negotiating the Future: Know Thyself
From our friends at the Neuromarketing Blog, we learn that twenty-somethings are more risk-averse than seniors.
Story: Mediation Practice
In my mediation practice, I find that people accurately assess how risk-averse they are and that they will readily tell you why ("I was poor"; "I was rich"; "I survived the Viet Nam War"; "I lost my parents when I was ten and was sent to live in an orphanage" etc., etc.)
Because I now help people make decisions on a weekly if not daily basis, I know that both the "why's" and the "therefore's" of risk-tolerance are as unique as fingerprints.
Story: Dad and the Grapes of Wrath
I, for example, was raised by parents who experienced the Great Depression. My father's family worked its way west from Nebraska to Portland and finding no source of sustenance there, drove the model-T south through California's fertile Imperial Valley, picking fruit and vegetables on the way (the entire family, including all children old enough to pick).
Dad's family eventually settled in the foothills of San Diego (Ramona) where they raised chickens. His mom took in the neighbors' laundry to fill in the financial gaps.
Other than Mr. Thrifty, Dad is the most financially risk-averse person I know. (oh no! you DO always marry your dad!)
Story: Me and Mr. Thrifty
But let's go to the second generation. Raised by depression-era parents, my older sister is incredibly financially risk-averse and I (to Mr. Thrifty's horror) am on the far end of risk-courting. Mr. Thrifty's childhood financial distress, on the other hand, seems to have produced two financially prudent children -- neither pathologically "tight" nor abnormally risk-seeking.
But this is all anecdote, you say.
Yes, but the truth resides in the particular, not in the general.
Story: Innocence and Experience
At the beginning of the semester at the Straus Institute one year, the professor asked each student to jot his or her greatest fear on a piece of paper. Roughly half of the class was post-forty mid-career people and the other half twenty-something law students.
I was genuninely shocked by the result. In a roomful of statistically over-achieving outliers, every twenty-something law student said "failure" and every mid-career student said "nothing."
If pressed, I'm sure we mid-career types could have populated a lengthy list of fears: ill health, war, earthquake, loss of our children, etc., etc., etc. That our first response was "nothing," however, said something about us. What? And why were all these bright, talented young people who were so clearly successfully achieving so afraid of failure.
Then it struck me. We mid-career people were not afraid of failure because we had likely already failed. And survived. Rather joyously. The law students who haven't yet failed think failure will be a far greater catostrophe than it ever actually is. This is not only the wisdom that comes with age, but also the new finding of the neuroeconomists.
Finally! the Neuroscience
In a 2005 article in the Illinois Law Journal, Law and the Emotions: The Problems
Affective Forecasting (80 Ind.L.J. 155, 167) Syracuse Law School Professor Jeremy A. Blumenthal summarizes the current research on one's ability to anticipate the degree of suffering that might be caused by failure as follows:
although people are relatively adept at knowing which emotion they will experience and whether it will be positive or negative, people are surprisingly inaccurate at predicting the intensity and the duration of those emotions. Moreover, this is so even for relatively “straightforward” emotional experiences, such as winning the lottery or suffering severe injuries. It is on such inaccuracies—in predictions of the intensity and duration of future emotional experiences—that most of the affective forecasting research has been focused.
Id. (emphasis added).
Parting thought? There's no greater gift to one's peace of mind than failure.