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One of the mistakes we simple human beings do is try to see things in a binary fashion. Something is or isn’t. Believer or non-believer. Black or white. Republican or Democrat. Rich or poor. One of the areas which can be deadliest to our well-being and personal power is seeing attributes of ourselves in the same light.

Let’s take one of the most abused: confidence. We see confidence as an either-or proposition almost entirely. She’s confident. He’s not confident. Even in our use of language, we rarely ever refer to degrees of confidence. “Sort of confident” doesn’t really exist linguistically in the same way that middle class does in economic language.

What does confidence even mean? Short version: a belief that what you are doing is correct or effective based on evidence and history. Confidence is far from binary. The more evidence and history you have of being right, being effective, being productive, the more confidence you probably have in yourself. The more evidence and history that you have to the contrary, the less confidence you probably have in yourself.

Guild bank

If you begin to think of the history and evidence of confidence as a sort of currency or commodity, then you change confidence from a binary belief to something that you can measure and manage. What if confidence operated like money you put in a bank vault? An activity that demonstrated evidence of a lack of your capability would be a significant withdrawal in the confidence bank. An activity that demonstrated evidence of your superior capability would be a significant deposit in the confidence bank.

Put in this light, then, managing your sense of confidence becomes almost transactional in nature, something that most people can understand and do. If you take a big withdrawal from the bank, you have to build back up that reserve. What’s more, because you’re starting with fewer resources on hand, you won’t be able to make as big an investment to recover your loss, so you have to look for smaller opportunities to build back up that reserve.

Suppose, for example, you performed badly on stage in front of a major audience and you took a giant withdrawal from the confidence bank. In order to build that back up, you’d take a series of smaller speaking engagements or other activities that deposit more and more into your confidence bank until you’re back to even, and then you can make big investments and risks again.

When you view confidence as transactional in nature, you can then assess all of the activities and actions you take on a daily basis on a confidence-economy scale. Some activities will generate very little or none, because the outcome is never in question or has no value. Some activities will generate or withdraw small amounts of confidence, such as getting positive or negative feedback from friends on your Facebook wall about your latest venture. Some activities will generate or deplete large amounts of confidence, such as speaking publicly or competing in a martial arts tournament if you don’t have enough evidence and history to support your success in those endeavors. Once you have a sense of what builds confidence for you, you can re-prioritize how you live day to day to focus on activities that build or deplete confidence at a level of risk you’re comfortable with.

Think about how you manage your own levels of confidence and whether you treat it as an all-or-nothing belief in yourself or something transactional and manageable. If you operate with a sense of confidence being a dynamic, fluid currency in your life, you’ll be able to restore and build confidence in yourself much faster than someone waiting for the big break that may never come. It’s the confidence equivalent of investing smartly over time versus playing the lottery and hoping to get lucky just once.

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