Episode Details

Are you hoping to be a better investor, businessperson, or entrepreneur?

Well, today's show is for you because we discussed the concept of behavioural finance, which is the study of the effects of psychology on investors and financial markets.

But don't worry, it's not woo-woo stuff, and it's not technical. Instead, I share several quotes from my favourite author, Morgan Housel, and Mark Creedon and I will try and explain why investors often appear to lack self-control, act against their own best interest, and make decisions based on personal biases instead of facts.

Whether you're a beginning investor or well down the track in your investment journey, I'm sure today's show will give you some insights, as you're probably twice as biased as you think, and if you don't think this applies to you, you're probably four times as biased as you think.

Want to become better with your finances?

Well, you could do a lot worse than learning from my favourite author, Morgan Housel, author of the Psychology of Money.

His book The Psychology of Money shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life's most important topics.

And today, I'd like to discuss several of Morgan Housel's quotes with Mark Creedon, founder and CEO of Metropole's Business Accelerator Mastermind.

Doing well with money isn't necessarily about what you know. It's about how you behave. And behavior is hard to teach, even to really smart people.

● Doing well with money has little to do with how smart you are and a lot to do with how you behave.

● Money―investing, personal finance, and business decisions―is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world, people don't make financial decisions on a spreadsheet.

● Emotions can override any level of intelligence.

Morgan Housel Quotes

"Be careful when reading about how stupid investors can be and not realize you're reading about yourself."

"The problem with economic forecasting is that the things you can predict tend to not matter, and the things you can't predict make all the difference in the world."

"Planning is important, but the most important part of every plan is to plan on the plan not going according to plan."

"Getting rich and staying rich are different things that require different skills."

"Most financial mistakes come when you try to force things to happen faster than is required. Compounding doesn't like when you try to use a cheat code."

"Imagine how much stuff you'd have to make up if you were forced to talk 24/7. Remember this when watching financial news on TV."

● Investors were probably better informed 20 years ago when there was 90% less financial news.

● Predictions, opinions, and forecasts should be discounted by the number of times the person making them is on TV each week.

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