How Pessimism Can Make You Rich

You know that rush of confidence that comes when you decide you are absolutely, totally going to make a change? The burst of optimism, the bliss of hope, the vision of your goals achieved?

Turns out they can backfire on you. Especially that optimism bit.

Scientists who study change and success know that intentions are an important part of accomplishing any goal. You have to want to change; you have to plan to act. But a new study from the University of Waterloo shows how positive intentions can actually interfere with long-term success.

The study followed college students who had all set the goal to save money they were making at their jobs to help pay for school (on average, the savings goal for the term was $5000). They tended to be highly motivated and highly confident: they estimated, on average, an 85% chance that they would succeed.

When they set their goals, the students also had the chance to enroll in a program designed to help them meet their goals by carefully tracking their savings. Most students did not believe they needed this help. When asked how much they were willing to pay for the support program, the most frequent response was "nothing." Even those who enrolled predicted it wouldn't do much for them. As it turns out, the program was quite helpful for those who participated, and would have been worth paying for.

In the end, only 65% of participants met their goals, and this includes those who had the extra support of the savings tracking program. The researchers speculated that the students' initial optimism actually put them at a disadvantage over the quarter. Students put too much weight on their good intentions. They failed to recognize that they needed to carefully monitor their actual behavior, and might need some external help.

Previous research by one of the study's authors, Derek J. Koehler, has shown this trend for other forms of goal-setting. In general, people trust their initial intentions far more than they should [2]. They fail to consider how external events, situational factors, and other forces might undermine their ability to act on their intentions. And so they predict their own success based on their motivation at that moment, without anticipating the challenges that inevitably come up. Other researchers have found the same kind of bias when people predict how long it will take to accomplish a goal [3].

Curiously, no such bias exists when people are asked to predict others' chances of success, and how long their success will take. We can see clearly that other people will face challenges or their motivations will waver. And indeed, in the study of college students' savings, the students recognized that other students would benefit from the savings support program-even as they thought they, themselves, wouldn't need it.

This is a curious reversal of one of social psychology's best-known findings, the actor-observer effect. Usually when we try to interpret other people's behaviors, we assume that their actions are due to who the person is-their personality, their character, their abilities, and their motivation-and we underestimate the influence of external forces. However, when we interpret our own behavior, we are far more likely to see how external forces shaped our actions.

For example, if you fail a test, I think you don't know much. If I fail a test, I think I didn't sleep well the night before, and the test was poorly written. If you yell at your waiter, I think you are rude. If I yell at a waiter, I think he was rude, and his lousy service pushed me over the edge.

But the opposite seems to be true when it comes to predicting future behavior. We simply don't have a realistic sense of the external challenges we will face. All we know in that moment is the strength of our intentions. In the moment I commit to quitting smoking, I focus on the flood of optimism that I can make this change. I'm not thinking of the friends who will offer me cigarettes, the stress of staying late at work, or the after-dinner cravings that will overwhelm me.

These studies suggest that you can ensure your future success by imagining your future failure. Anticipate what your setbacks might be, and when temptation might strike. Have action plans for those moments. The same researchers have shown that strengthening your intention doesn't increase the chance of success [2]. Only strengthening your action plan helps-getting very specific about what you need to do and how you are going to do it.

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Hope and belief in yourself are key for any long-term success. But don't trust that initial warm glow of optimism too much. Feeling good about yourself may make you miss the opportunities to help yourself. Instead, turn that optimism into self-efficacy: know that challenges will arise, but with the right support, you can handle them.

Studies Cited
1. Koehler, D. J. , White, R. J. , & John, L. K. (2010). Good intentions, optimistic self-predictions, and missed opportunities. Social Psychological and Personality Science, published online in advance of press.
2. Koehler, D.J., & Poon, C.S.K. (2006). Self-predictions overweight strength of current intentions. Journal of Experimental Social Psychology, 42, 517-524.
3. Buehler, R., Griffin, D. & Ross, M. (1995). It's About Time: Optimistic Predictions in Work and Love. European Review of Social Psychology, 6, 1-32.