How a dual-degree in medicine and finance turns you into a better decision maker

Before you apply for a scholarship, let’s face the disappointing fact upfront. There is no empirical evidence supporting the claim that a surgeon turned banker made better decisions than normal mortals. How would one even think about forming such hypothesis then?

There are two elements to that, which we shall dissect carefully. Guts and numbers. Surgeons tend to know where to locate the guts in the human body. Good start. Bankers excell at putting numbers to everything and anything. Excellent continuation, although let’s be honest. There is lots of empirical evidence of catastrophic outcomes from decisions made by greedy bankers.

What do guts have to do with decision making? Guts and the brain do interact. They are intimately connected. Symptoms in the guts triggered by feelings are fed back to the brain, where they can cloud our ability to see clearly. This is especially true in decision making where our ability to frame a decision generously, to value all possible options and to decide rationally are prerequisites for good decisions. Don’t confuse good decisions with good outcomes, though. There is no correlation. Good decisions are good because they have been made at the right time for the right reasons. That doesn’t change the fact that they are best bets with uncertain and sometimes lousy outcomes.

Thus, should we ban emotions from decision making? By no means at all. Acknowledge your emotions, put them in a jar, refrigerate mentally and then spread them over the options when valuing those.

The valuation part is where the banker in you is given an opportunity to shine. There are two aspects worth considering. Start with sunk costs. Whatever happened happened. Your old self had decided to spend a resource. Fine. Get over it. No reason to be resentful.

Second, put a number to every option available to you. Easy if you can quantify a tangible return or money spent. More difficult to spot foregone earnings. Really hard to value emotions. Are net earnings of $100 more valuable than incremental quality time with your spouse? By creating a common currency in the form of «benefit units» you might be able to overcome this challenge.

Let’s say that $100 of incremental income might improve your life situation by 2 benefit units. Similarly, you might want to assign the same value to dedicating an evening per week to your spouse. Assuming for a moment that your marriage is actually facing the abyss, the value of commiting time to your spouse and thereby saving your marriage can easily lead you to increase the benefit value of this particular outcome from 2 to 4 units. This attempt to value outcomes isn’t scientific nor is it static. It can just feel right, which is nothing to be ashamed about.

Acknowledging your starting position is crucial. The marriage example can easily be applied to any monetary benefit. Deciding on an option that improves your financial situation from having no income at all to earning a minimum income to make ends meet isn’t the same as moving yourself from a life in luxury onto the list of the world’s billionaires. By considering the incremental as opposed to the absolute benefit value, you improve your valuation results significantly.

Lastly, decide. Not deciding is one of your options. However, choose it as carefully and proudly as you would pick any bold or presumably crazy alternative. Best of luck!