Wow! That’s a great piece of advice. But what really is a great piece of advice? Let’s find out.
It’s time to have a word, with me, Rajive Dhavan.
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Rajive Dhavn
Wow! That’s a great piece of advice. But what really is a great piece of advice? Let’s find out.
It’s time to have a word, with me, Rajive Dhavan.
There are two things that define a good piece of advice. The first is to understand the environment or the circumstances of the other person. And it needs to be understood in depth. More often than not, what we know about the circumstances of the other person is just at the surface level. And a lot of people are not comfortable with sharing their issues in detail. So, unless we probe someone and get a clear picture of their situation, we can’t really move ahead in the process.
Sometimes, the best advice can turn out to be counter-productive and defeat the purpose, if we are not completely aware of the situation. For instance, when two people have a misunderstanding, and we give an advice to one person on what to do, just by hearing their side of the story, our advice might do more damage than good, even when the intent is to fix things.
Having said that, there are also times when we might not know the solution. And that’s okay. We don’t need to always give advice, especially when we’re unsure.
The next step to create a good piece of advice is to understand the risk tolerance or risk appetite of the other person. And this might be different from what we see or know. So, this might need some probing too. The only catch, however, is that sometimes people overestimate or underestimate their own risk appetite. So, taking everything at face value could backfire too. It’s essential to analyse the actions of others and build our own analysis of their risk appetite. The circumstances of the other person also play a key role in influencing their risk appetite.
Now, let’s top this up with an example. If I’m going to be giving a piece of financial advice to a friend of mine, and I know he’s already under a lot of debt, but I ask him to invest aggressively in the stock markets to make a lot of money; it’s not good advice for him. But the same advice, when given to someone who’s got enough savings and no debts, can work wonders.
And then there are so many other factors as well – their age, whether they are married or not, how many children they have, what kind of responsibilities they have, do they have ailing parents, what their goals are, and the list goes on.
So, yeah, the advice is the same. It’s logical to some degree too. But the circumstances and the risk appetite of the other person make all the difference.
After all this, there are also cases where sometimes people don’t need advice. They just want someone to hear them out. In that case, no analysis and no advice will work.
So the two key factors that drive a great piece of advice are understanding the circumstances of the other and analysing their risk appetite.
Beyond this, there may be a hundred other factors that one needs to keep in mind while giving responsible advice. But these two key factors will at least give you the right ammunition to kick-start the process.
Like many other things in life, when it comes to advice, there’s no such thing as one size fits all. An advice needs to be customised. It needs to tailor-fit the person on the other side.
I hope you liked this piece of content. And if you did, please share. I’m sure you’ll positively impact someone. Thank you.