Poor. Choices.

A few years ago I remember hearing about how Amazon scaled to the size it is so quickly.

There were several mechanisms that stood out to me like eliminating PowerPoint in favor of narrative documents, working backwards from the customer, and one-way vs. two-way door decisions.

Two-way door decisions are exactly what they sound like – decisions that can be undone or reversed rather easily. These include things like painting your kitchen a new color, buying a share of a company, or starting to read this article only to realize your time would be better spent organizing the condiments in your fridge in alphabetical order.

One-way door decisions are also exactly what they sound like – hard or impossible to undo. Like getting married, quitting your job, or spending 10 hours playing Pokémon with the wrong starter (90s kids get it).

As Jeff Bezos wrote in a shareholder letter,

Some decisions are consequential and irreversible or nearly irreversible — one-way doors — and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions.

But most decisions aren’t like that — they are changeable, reversible — they’re two-way doors. If you’ve made a sub-optimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups. 

The whole trick is figuring out what kind of decision you’re making and then using this mental model to make it.

One-way Doors:

• Go slow.
• Consult with others.
• Explore your options.

Two-way Doors:

• Move quickly.
• Use your intuition.
• Reverse course if you don’t like the result.

As luck would have it, I recently started a new job at Amazon and I can definitely confirm that this framework still very much exists.

It’s not uncommon to hear someone in a meeting say that some decision is a “two-way door” and we are spending too much time arguing about it. Speed matters in business more than almost anything else.

I recently started thinking about this through the lens of money (because of course I did) and I’ve landed on my own application of it.

To improve your finances, pause for a moment before spending any large amount. Decide if it’s a one-way or two-way door purchase.

You really just need to get the one-way door purchases right. The big things.

You do this by thinking through the alternatives, the potential outcomes, and consulting with those knowledgeable on the topic.

Here’s an example from my super interesting life:

My wife and I bought a house that did not yet have a backyard entertainment area. No deck, no patio, not even stairs. Just a sliding doorwall with a short drop to the grass.

Once you install a deck or patio, it’s hard to replace. It is also expensive. So we needed to get it right.

We decided we wanted a nice deck like some of our neighbors that had similar setups. So we sketched it out, got a few quotes, and then had a decision to make. The average quote was about $10,000 for a Trex deck. Definitely a one-way door amount of money and more than we wanted to spend.

But as we talked about it, we realized we didn’t really need a deck since the doorwall wasn’t very high from the ground. A patio with a few steps would work just as well.

So, again, we sketched it out, got a few quotes, and then thought it over.

A 10ft. x 10ft. concrete patio would cost us about $3,000. Still a one-way door type of decision, but much more reasonable. And we were just about to pull the trigger until we spoke with one of my best friends who reminded me:

“No one has ever complained that they had TOO much patio space.”

He was right.

We quickly requested the contractor double the size of the patio, from a 10 x 10 to 20 x 20. And because most of the price of pouring a patio is labor, the quote only increased $1,000.

This is a perfect example of how and why to figure out what type of decision you’re making and then do the amount of due diligence that it requires.

Had we been deciding whether to plant a rose bush or a lilac bush off to the side of the yard, and spent that same amount of time and effort, it would have been a waste.

But how many people (and companies for that matter) treat one-way door purchases as if they were two-way? Look for them and you will start to see it all over the place.

Here are some one-way doors I’ve watched people mistake for two-way doors over the years:

Purchasing a brand new car. Even if you sell it a week later, you will lose a bunch of money on it. The younger you are, the less reasonable it is to buy a nice car.

Delaying saving for retirement. Every year you forego taking your finances seriously is a year you will never get back. The earlier you start saving and investing, the better. Even if just to build the habit. This is the definition of a one-way door.

Related: Money Milestones for Each Decade of Your Life.

Purchasing a house in a bad location. Easily one of the hardest to reverse decisions is where your house is located. You can change the siding, or redo the kitchen, or even refinance your mortgage. But you can never move the house.

Getting married too quickly. Now that I’m in my 30s, I’ve seen some divorces from those who jumped the gun in their 20s. Not only are weddings expensive, but so are divorce lawyers.

Getting divorced too quickly. The default assumption most* people should have is that their relationship problems are 80% them and 20% their partners. Therapy, couples counseling, meditation, and self-awareness should all be tried before giving up on a marriage. (*The exception being for objectively abusive situations.)

Buying expensive furniture. We recently forgot to consider what type of decision a big furniture purchase was. Had we measured the space more, thought about other options, and examined the return policy thoroughly, we would have avoided buying a $900 piece of furniture that we now need to sell on Facebook Marketplace for half the cost.

Quitting your job. Don’t discount the value of working with people you like, in an industry you know, at a company with a strong balance sheet. According to Cal Newport, job satisfaction doesn’t come from following your passion, it comes from expertise, autonomy, and a good culture.

Not quitting your job. The flip side of staying put in a comfy gig is your salary likely won’t keep up with the market. Taking a calculated risk with your career once in awhile is a good way to earn more money. Besides, if you leave on good terms, you may be able to go back to your previous company if things don’t work out. One-way doors can become two-way doors if managed correctly.

Taking out student loans. I’m glad there is a lot more awareness about the downsides of student loans now than when I was in school, but I suspect this problem will be with us for a few more years. Check out my article on how to graduate college with zero debt.

Mistaking gambling for investing. Options, penny stocks, and concentrated positions in a single stock are all gambling.

Investing in a timeshare: Buying into a timeshare can seem appealing for vacation plans, but getting out of that commitment can be difficult and expensive.

With money, it’s almost always about getting the big things right. The one-way doors.

With two-way door decisions, feel free to explore a bit more and have some fun, like subscribing to my monthly newsletter!