I’m not referring to the view from the rooftop bar (although it was pretty awesome, if a little windy). I’m referring to the inside view, a term coined by the ever-present and oft-quoted Daniel Kahneman.*
Basically, we humans have a tendency to adopt a particular attitude when assessing the potential of a venture we are part of of. Unsurprisingly, we tend to expect that we will succeed. Even in scenarios where we know the greatest likelihood is failure, we work on the assumption that our project is different, that we are special, that we site outside the norm and the rules don’t apply to us.
It’s why we open new restaurants, knowing that most fail.
It’s why we start small businesses.
It could even have something to do with why we have kids (it won’t be that hard for me…)
We know that many people with a mortgage end up stuck in jobs they hate, scared to risk a stable pay check. But we assume we’re different when we buy.
We know that renovating old houses often cost more than the initial budget because of unforeseen work. But we commit out maximum amount from the outset.
We know that building a house typically takes longer than expected. But we take on a fixed-term rental agreement that ends the day after the first finish date.
When it comes to out attitudes and actions in the property market, how else are we each special in our perception, and totally normal in reality?
*You can read an excerpt from Kahneman’s primary piece of work, Thinking Fast and Slow that talks about the Inside View at this McKinsey article.