How Tunnel Vision Leads to Poor Money Decisions
In Today's newsletter:
How Tunnel Vision Leads to Poor Money Decisions
“Confirmation bias is the most effective way to go on living a lie.”
- Criss Jami
This is another installment in my ongoing series called “Money On My Mind,” where I publish articles to help you deal with the psychological aspects of managing money.?Check out past editions of the series here.
Today we begin exploring cognitive biases, a term used to describe the unique ways the human brain struggles to process complex information, which leads to irrational decision-making.
Continue reading to learn:
This Is the Most Important Financial Decision in Life
Not all financial decisions are created equal.
Whether you cook at home tonight or go out for dinner means nothing compared to a decision like whether you decide to rent or buy your home.
There’s a prevailing school of thought that if you take care of the little problems, the big problems will take care of themselves. I think that’s backward; if you absolutely nail the biggest financial decisions in life, you don’t need to sweat the little stuff so much.
领英推荐
This is the first in a 10-part series looking at the 10 most important financial decisions you are likely to make in life where we drill down and give each of these questions the spotlight they deserve.
4 Irrational Arguments Against Investing in Index Funds
The evidence presented in The Rational Investor paints a clear road map for the rational investor. Invest in low-cost index funds that buy the entire stock market, and basically forget about your portfolio until retirement.
Unfortunately, most investing resources you will come across will not take the rational approach. An entire media and online ecosystem have sprung up to use narratives and guruism to convince investors to do anything other than buying and holding index funds for 40+ years.?
I thought it only fitting that we end our journey with a discussion of four irrational and common anti-indexing narratives you will likely hear.
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This newsletter is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.