Wall Street Journal columnist Jason Zweig has written on just about every topic imaginable when it comes to the world of personal finance. His book Your Money & Your Brain covers a gamut of emotions and biases that we’re likely to experience when dealing with money. The major theme, as Zweig puts it
“…our investing brains often drive us to do things that make no logical sense. That does not make us irrational. It makes us human. Our brains were originally designed to get more of whatever would improve our odds of survival and avoid whatever would worsen the odds. Emotional circuits deep in our brains make us instinctively crave whatever feels likely to be rewarding–and shun whatever seems liable to be risky.” [1a]
In other words our minds are still quite primitive. The mental processes and emotions that evolved to help our ancient ancestors survive have resulted in some unintended consequences when it comes to dealing with modern day financial decisions. Using a combination of psychological evidence and easy to understand examples Zweig takes readers through the progression of emotions that they are likely to experience when managing their finances and investments
- Greed
- Prediction
- Confidence
- Risk
- Fear
- Surprise
- Regret
- Happiness