How to Anchor

I recently bought an investment property, here in Portugal, and was feeling pretty good about the deal until the day before I was to sign. I had underestimated the closing costs, mainly taxes, which were in fact material.

My reaction was telling of how anchored I was to my original expectation.

I felt anger. I felt it was unfair. I felt self-doubt. From this place of feeling all of these emotions, I began to seriously contemplate not signing the deal.

For a moment, I lost perspective of the bigger picture. I was more focused on seeing my original expectation, anchored firmly into the ground, versus evaluating if this deal was still a good investment given the new information of unbudgeted costs.

The once fixed anchor now began to float. Once I gave myself the space to digest my emotions, I came to again see the bigger picture and could now see clearly it was a great investment. I signed the deal.

I am not one to like rules, unless I am the one setting them of course. Even then, I am not quite sure I even like rules that I set for myself, I don't know if anyone does actually.

There is one rule though that after this experience of almost not signing a great deal because of my anchored expectations that I developed for myself. It has started to help bridge my fantasy with my reality.

My mind is capable of imagining the ideal scenario, for practically everything. It assumes the ideal conditions and circumstances by default, even though reality most often has other plans that my mind fails to account for.

The observer part of me notices how most things take longer than I expect, cost more than I budget for, and at times, have to be redone.

The experiencer me often reacts to these surprises with a set of emotions that range from mildly unpleasant to feeling triggered.

Knowing this pattern of expecting A, and often getting something slightly different, like an A+, A-, or B+, and noticing my automatic reaction to this delta between my fantasy and my reality, I came up with a simple rule to help me.

The 25% rule.

The 25% rule is a reminder for me that things will take 25% longer than I expect, cost 25% more than I expect, and 25% of the time, need to be redone.

These reminders are starting to help build more tolerance in my reality, which is often slightly different than my fantasy.

If I anchor my expectation to a specific number, or date, then I will measure success against that anchor. If the result is slightly off, I don’t feel good, either about those involved or myself.

The 25% rule also takes the edge off of my perfectionist tendencies.

In the past little while since being inspired by this rule, I have found it helpful to flow with surprises in all parts of my life. From business and investments, to how long it takes for a food delivery order to arrive, to my own productivity or efficiency in a day. The 25% buffer that I am slowly adding to many parts of my life is helping me relax into reality.

With this 25% rule, the previously fixed anchor is now a floating anchor. It has the freedom to move, within reason.

A floating anchor might sound like an oxymoron, in that it does not exist in reality. That may be true, however the fixed anchor also does not exist in reality. It is something that I made up in my mind to begin with, so why not choose for it to be floating in the first place.