The 3 Whys

My almost 3 year old daughter often drives me crazy with her constant questioning of whys. But did you know, one of the best way to find the root of a problem is by simply asking why?

A couple years ago, I was really unhappy at work that I wanted to quit my job. I had sent out resumes, and even went for interviews. Then one day, my husband ask me a series of whys.
It went something like this.

“Why do you want to quit your job?”
“Cause I’m unhappy with the company” I retorted.

“Why are you not happy?”
“Cause I found out that they didn’t pay me at market rate! I did some market research and I should be getting $xxxx amount!”

“Why do you think they didn’t pay you at market rate?”

I thought long and hard about the last why. I know it definitely wasn’t because of my performance. In terms of performance, with a 1-5 rating, 5 being the highest, I am usually between 4-5, which is really good.

I know that the company is making money, and they are willing to pay for talent. But why aren’t they giving me that raise? Was it something as simple as me asking for a raise? Guess what, that was it. I asked for a pay raise twice and got them. Read here to find out how I did it.

When practicing this exercise, you have got to really put in some deep thoughts and honesty to your answer.
It shouldn’t be emotionally driven like this example:

“Why do you want to quit your job?”
“Cause I hate my boss.”

“Why do you hate your boss?”
“Cause my boss is an ass!”

“Why do you think your boss is an ass?”
“Cause he keeps criticizing my work”

“Why do you think he keeps criticizing your work?”
“Arg! He is just an A-hole, that’s why!”

Notice the difference in the 2 examples. If you do this exercise driven by your emotion, you are going to get nowhere and more frustrated. Instead of helping you find the root of your problem, it will probably make you want to quit even more.

When answering your Why, it should be driven by supporting facts and data. Only then, can you find out your real Why. Once you have that, then you can start thinking about How to tackle that Why.

And remember that the 3 is just an arbitrary number. It can take more or less whys, to get to the root.

Applying the 3 Whys on personal finance

My investment portfolio is pretty heavy in SG stocks. When the market tanked in March during the all time low, it was difficult not to monitor my stocks everyday. There was a point where my portfolio hit -40%.

I was tempted to sell to reduce my losses, but I stopped short of doing that. I went through the 3 whys exercise on each of the stocks I bought. Majority of the stocks I own, still holds true to why I bought them. There were some that didn’t aligned with my reasons, and I eventually sold those off when the market recover a little.

Why did I buy this stocks in the first place?

These are quality companies that provided me consistent dividend income.

Why do you think they are quality companies that can continue to provide you dividend income?

Because [research findings]…

The 3 Whys is a technique that can be practised in almost any circumstances. Hopefully, you will find it useful too.