The Four Core Types of Regrets + Thoughts on Financial Regrets

According to the new book The Power of Regret: How Looking Backward Moves Us Forward by Dan Pink, only 1% of people say they never feel regret. Here are the most in-depth articles from the media tour: WaPo, BBC, Atlantic.

In 2020, the author Daniel Pink launched the World Regret Survey, the largest survey on the topic ever undertaken. With his research team, Pink asked more than 15,000 people in 105 countries, “How often do you look back on your life and wish you had done things differently?” Eighty-two percent said regret is at least an occasional part of their life; roughly 21 percent said they feel regret “all the time.” Only 1 percent said they never feel regret.

In the book, Pink identifies these four core types of regret:

• Foundation regrets involves an irresponsible choice that changed the course of your life. This includes not saving enough money for retirement, not taking care of your health by eating well and exercising, or not putting in proper effort at school or work.
• Boldness regrets come from being too cautious, and not taking certain risks. This includes staying in a “safe” job instead of going for a career changes more suited to you, or not asking out someone you liked on a date.
• Moral regrets are when you don’t live up to your own values. You cheated, bullied, lost your temper, or didn’t stand up for something.
• Connection regrets deal with lost relationships with family members, friends or colleagues. Too often, this happens due to neglect and passivity.

I used to think of regrets as equivalent to mistakes. In our household, we try to look at mistakes as a positive opportunity to “make your brain grow bigger”. This way, they are less afraid of trying something new or challenging. Regrets are simply mistakes, so we should just learn from them and move on, right?

However, now I see regrets as a special sort of mistake. They involve looking at the past and imagining different outcomes. Over time, you realize what kinds of choices are likely to lead to regrets, and what won’t. This can help guide you towards better future decisions. To me, the phrase “no regrets” doesn’t mean I don’t have any regrets. It means I know what will cause regret, and so I do things to avoid it. For example:

• I won’t regret ditching a little bit of work for dedicated one-on-one time with a child. If you have kids, read The Family Board Meeting.
• I won’t regret saving a few months of expenses to ride out life’s inevitable bumps.
• I won’t regret waiting 24 hours to send that angry e-mail.
• I won’t regret reaching out to a friend, whether it is because you need it or they need it.
• I won’t regret taking the time to show or tell someone “I love you”.
• I am much more likely to regret not taking a chance, than taking a risk and failing. In many cases, the downside isn’t so bad, while the upside could be limitless.

In terms of financially-related regrets, the two big ones are the foundational regret “I wish I saved more money when I was younger” and the boldness regret “I wish to took the risk to pursue a career better aligned to my personality and interests”.

A study by the Federal Reserve Bank of New York found that only 27% of college graduates work in a field related to their major. Career paths are long and winding these days. I remembering choosing my college major when I was 17 years old, since some colleges make you pick on your application. Even though I questioned my choice after a few years in college, I felt the “sunk cost” bias and didn’t want to risk the additional time, effort, and tuition to try and change majors. I was also “good” at the major, and so I kept going. That is one of my personal regrets.

In my view, finding the right career path where you get the trifecta of “I am good at this”, “I like doing this”, and “I get paid well for doing this” is like having a jetpack on your pursuit of financial independence. Once you have a job where you wake up and actually look forward to go to work and there is a small but increasing gap between income and expenses, you are ready to blast off and start compounding. You could try and pursue financial independence with a job that is missing any one of those three factors, but the journey will feel like a slow grind instead.

Eventually, the fact that I was missing the “I like doing this” starting bugging me enough, and I was ready to quit and go back to school. But the first thing I had to do was save up a year of expenses (also helped by minimizing those expenses). That little money cushion gave me the courage to make the leap. The “ROI” on that “emergency fund” was more than any index fund or rental property. So that’s what I plan to tell my kids: When you’re young, live simply and always create a cash cushion so that you can keep searching for the jetpack trifecta. This will minimize your financial regrets.