How to Avoid Impulse Buys
Hi, My name is Ben Le Fort, creator and editor of Making of a Millionaire, a publication dedicated to helping you use money to live your best life.
Welcome to the Making of a Millionaire weekly review. Think of this email as your personal finance appetizer. If you want the whole meal, you can unlock my entire archive of articles, books, and tools to help you use money to live your best life by subscribing to the MOAM Substack here.
Quote Of The Week
"The four most dangerous words in investing are: 'This time it's different.'"
- Sir John Templeton
The 3 Money Articles Of The Week
How to Avoid Impulse Buys
Imagine that I showed up at your office and offered to buy you lunch. I give you two options: Pizza or a salad.
Most people would choose pizza and, in doing so, would be displaying a textbook example of “present bias,” which is the human tendency to choose immediate rewards and avoid immediate costs even if they know that those decisions are not in our best interest in the long run.
If Index Investing Is So Great, Why Doesn't Everyone Do It?
I’ve spent a frankly embarrassingly large portion of my adult life reading academic research papers and studying finance. The more research I read on investing, the clearer it is that investing has basically been solved for the average person.
Allow me to distill over 100,000 words I have previously written about investing into one sentence:
How Your Attachment to Possessions Hurts Your Finances
领英推荐
One of the most important lessons in economics is that every decision has an opportunity cost; what we don’t get by choosing one action over another.
Let’s say you are thinking of selling your house. Similar homes in your neighborhood are selling for an average of $500,000. But you decide to list your house for $600,000.
You tell yourself it’s because of the new renovations or that you have a slightly bigger backyard than your neighbors. In reality, you overvalue your home because the thought of losing your house is more painful than not having someone pay you for the true value of your home.
The opportunity cost is the money you never receive because you listed your house too high and didn’t sell.
Pick up your copy of The Rational Investor
A Final Thought From Me
For more bite-sized financial wisdom, follow me on Notes.
Cheers,
Ben
Founder of Making of a Millionaire
Author of The Financial Freedom Equation & The Rational Investor