The challenge in writing about behavioral finance is that there is so much wonderful work already in circulation. For those who want to better understand the subject, a few books stand out:
I don’t want to duplicate the content of these marvelous books, so I focus on the errors I have personally observed in money management over the past three decades.
To make these easier to follow, they are organized into three sections:
1. Avoidable mistakes
2. Emotional decision-making
3. Cognitive deficits
Let’s examine how our brains lead us to bad behaviors that harm our wealth and learn what we can do to stop outsmarting ourselves.