Why Smart People Make Big Money Mistakes and How to Correct Them
Author: Gary Belsky
Publisher: Simon & Schuster; Fireside ed edition (April 6, 2000)
Average Rating: 4.5 star
People who are very smart otherwise tend to make foolish financial choices. This book focuses on this very statement and, unlike other financial books, focuses directly on behavioral issues. It is a captivating investigation on the ways we deal with money, including our techniques of wasting it.
Since it deals with the new science of behavioral economics, the writer reveals the psychological causes, our ways of thinking, decision making skills, and the sources of our 'irrational behavior'. It revolves around the psychological traps one's liable to fall for such as the idea that there are times when people treat a dollar with more value than on other occasions. Moreover, people's tendency to be more risky in an attempt to avoid potential loss is also among the many dilemmas they face. The fundamental relationship between increasing the availability of choices and one's preference to do nothing, undermining the impact of inflation, non-availability of second chances to make the first impression, and the ego trap in which smart people are likely to believe that they 'know it all' are also widely discussed. This book is an insightful and enjoyable read but not the sort of book that I'll come back to and read over and over again.
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