My partner Bob just showed me this amazing study called The Dunning-Kruger Syndrome. The effect is named after Justin Kruger and David Dunning, who developed the theory while at Cornell University by testing people on different skills and then asking them how well they thought they did. As you will clearly see from the graph, the less competent someone is, the less able they are to judge their ability. Or put more simply, some folks don’t even know enough to realize just how little they know.
- Participants were asked to evaluate their general skill in the tested subject
- In the graph, the results are sorted by how well the participants actually did in the test
- Everyone clearly thinks they are better than average and the least capable were also the most wrong in assessing their ability.
What Does it Mean to You?
We all know someone that is not as brilliant as they think they are, but it’s also true that many of us who are brilliant at one thing errantly assume we are equally brilliant about things in which we are, in fact, quite stupid. But sadly we are often too stupid to know it (as my wife, Jen, would gladly acknowledge when it comes to my knack for ignoring instructions when I “know” what I am doing)! The reality is no one is an expert in everything. Like diamonds, we are all brilliant, but we all have our flaws. We all suffer from Dunning-Kruger Syndrome in some form, so what should we do about it?
Be aware and be open. Having awareness of our limitations is the first step to improving our judgment. Only then can we be really open to really learning more about anything.
Our team’s responsibility is to help people all over the world to improve their lives by helping them with their decision making, so you can see why this study was fascinating to all of us. We all have biases and knowing what they are and how they affect our decision making is the first step in improving our entire financial life. That is why we developed The Money Mind™ analyzer as a free, easy and accurate way of giving people awareness about their blind spots and how to avoid the mistakes they might not be aware they are prone to making. Maybe ignorance is bliss because we always think we are smarter than we are about the things we know the least about….ok my head is spinning.
Give the Money Mind a try (link) and let’s see how well you know yourself….