One of the most popular (yet under the radar) logical fallacies is binary thinking. True or False. Yes or No. This or That. Binary functionality has its place — mathematics, physics, computing — but rarely does it translate to human decision making. The world is simply too complicated and the human brain often opts for heuristics, bypassing deep thinking altogether. This doesn’t need to be you.

Beyond the Zeros and Ones

Binary thinking is everywhere. Here are a handful of common examples:

  • Media. Some news source or “thought leader” lays down a narrative. Then people argue whether that specifically framed narrative is “good” or “bad.”
  • Politics (*shiver*). Two opposing bundles of beliefs compete for people’s affiliation and unwavering support. The other side must be entirely wrong… right?
  • Business. Company A unveils a groundbreaking product that’s likely to perform well. Therefore, Company B and C are doomed, and Industry D will suffer. Either you have the elixir or you don’t.
  • Financial decisions. Should I buy this or that? Save it all or spend it all? Invest in A or B?
  • Relationships. “He said X, so we can’t be friends.” “She has this one trait, so she’ll succeed / fail in life.” “That person has a good / bad taste in food, sports, friends, etc.”
  • Explaining complicated occurrences. This outcome happened because of this reason and not that reason. Simple causality.

And the list goes on and on.

Don’t get me wrong. It’s okay to disagree with others; in fact, you often should. My point is that on top of disagreeing with others you should learn to disagree with yourself. Say what? Hear me out.

Quantum Thought

One-sided thinking is totalitarianism of the mind. Faith and conviction are often preached with zeal, but its effects can make you mindless. When you only accept one idea as truth, it’s impossible to consider more than one hypothesis at a time. And when you fail to consider other hypotheses you’ll end up wrong far more often than you’d think.

“Quantum thought,” as polymath Nick Szabo points out, “demands that we simultaneously consider often mutually contradictory possibilities.” That’s tough to do, especially in such a noisy world that lives and breathes conformity. Binary thinking is dangerous because it’s a simple heuristic and far too easy to subconsciously habitualize. It’s worth fighting against. Szabo continues, “In quantum reality, I can be both for and against a proposition because I am entertaining at least two significantly possible but inconsistent hypotheses, or because I favor some parts of a set of ideas and not others. If you are unable or unwilling to think in such a quantum or scholastic manner, it is much less likely that your thoughts are worthy of others’ consideration.“

Malcolm Gladwell simplified it well: “If you don’t contradict yourself on a regular basis, then you’re not thinking.”

Revisiting the list above, let’s sprinkle in some quantum thought:

  • Media. Some news source or “thought leader” lays down a narrative. Instead of arguing good / bad or true / false, try reframing the narrative into something less biased and more “truth-capturing.” What’s the real story?
  • Politics. Fine, I’ll say it. Both sides are wrong about some things and right about some things. It’s probabilities. The truth lies in the middle. Always be wary when multiple beliefs are bundled up into neat packages.
  • Business. There are often multiple winners, unexpected losers, and those who reinvent themselves into better futures. It’s a multi-variable complex system. Understanding the future is rarely so simple.
  • Financial decisions. Opportunity cost is real, but so is balancing saving, spending, and priorities. There is more than one way to meet your goals.
  • Relationships. People are complicated; therefore, so are relationships. Give people the benefit of the doubt. You can learn something from most anyone. And, remember, binary opinions don’t count as universal laws.
  • Explaining complicated occurrences. History (big and small) is written by randomness. Cause and effect are rarely ever so simple, especially to be boiled down to “this reason” versus “that reason.” It’s multivariable.

Genius lies in being able to make smart decisions while upholding opposing viewpoints. Nuance should never be forgotten.

Show Me The Money

I want to double underline the importance of quantum thought in personal finance. Guidelines are important but in reality there are next to no rules. Different decisions — about spending, saving, and investing — can lead you into the same, great financial position. And randomness can (in fact, will) change the game entirely. When it comes to investing, The Motley Fool’s David Gardner provided some wise words on his Rule Breaker Investing podcast:

“But the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time, and still retain the ability to function or, in this case I’ll say, the ability to invest. To invest well. To hold over time that which deserves to be held.”

Consider promise and peril… together. Doing so separates first-rate thinkers from the rest of the pack. Take the red pill and expand your thinking.

My (idealistic) goal is to maintain a near-permanent state of quantum thought, even as my biases and instincts try to rip my rational thinking apart. As with anything, practice helps but perfection will eternally be out of reach. Yet I will persist anyway, hopefully destroying one binary thought at a time.

What binary thoughts are you shattering today?