A Self-Made Billionaire Uses This Easy Trick for Decisions

I learned this tool in a practical mathematics course more than fifty years ago and have used it for virtually every major decision of my adult life. It has never let me down and it will serve you well, too.

On one sheet of paper, list all the positive things you can about the issue in question, then give each one a score from zero to ten—the higher the score, the more important it is to you.

On another sheet, list the negative points, and score them from zero to ten—only this time, ten means it’s a major drawback. Suppose you are thinking of buying a house, and you tour one that’s in your price range, except the owners have painted every room to look like a giant banana. If you really hate yellow and can’t stand the thought of lifting a paint brush, you might give “ugly yellow house” a ten, and if it’s not that big a deal, maybe a two or a three.

If the positive score is at least double the negative score, you should do it—whatever “it” is. But if the positives don’t outweigh the negatives by that two-to-one ratio, don’t do it, or at least think twice about it.

The Decision-Maker is designed not to allow one or two factors to sway a major life decision in a disproportionate way. It forces you to strip away the emotion and really examine the relative importance of each point—which, of course, is why it works so well.

When we were considering whether to sell our royalty company, Franco-Nevada, to Newmont Mining, Franco’s executive team produced a collective Decision-Maker. We listed all the pros and cons, then the top four executives assigned their own point scores to each. We averaged them, the positives far outweighed the negatives, and we sold the company.