Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics

As I get older (and hopefully wiser), I’ve begun to understand some of the money mistakes I’ve made along the way. After reading Why Smart People Make Big Money Mistakes, I see that I’ve fallen prey to many of the issues raised by this excellent book. This book does a wonderful job of explaining how humans are naturally inclined to focus on the short term and have multiple inherent biases in their reasoning that lead to big money mistakes. More importantly, it provides thoughtful approaches to minimize those mistakes so that the reader will be better able to manage their finances.

The book is geared to the casual investor, like me, and those who consider themselves savvy investors, though the latter will either disagree with the authors, or learn something about themselves. The advice isn't x's and o's of investing, no dry formulas or tips on research. Quite the opposite, the advice is simple and repeated throughout the book. The writing style is breezy, you feel like you're sitting in the author's living room chatting about finance. It's an intellectual look into why you part with money too easily, ignoring common sense, and making wrong assumptions. An excellent mix of psychology and finance.

What a book! Now, if you have an overly sensitive ego, this book may make you a little uneasy. However, if you truely want some honest insights into why very intelligent people can make some huge mistakes, then read this book. In some places the reading is a little tedious. However, the examples given and the corrective measures talked about to avoid mistakes have a lot of merit. I'm very thankful that I took a chance on this book. Personally, I think it is a very good and very insightful book.

This book is excellent. I gave it only 3 stars because the author doesn’t provide any references/citations backing up his claims and “research” (at least in Kindle version). I’m surprised the publisher allowed such an omission.If the results are statistically accurate (which author talks about that importance in book), then this is a powerful teaching tool. But if it based on one small study, then it is not very reliable. And without references the reader can’t verify. That is why the low score.

This book draws liquidity from the market. Great tools to better develop a decision making process ! . . .

Belsky and Gilovich wrote a nice, well-structured and entertaining survey of the "new" science of behavioral economics and finance.This small book should be more particularly of interest for beginners in this field who are looking for something easy to grasp without too much scientific jargon. Short stories and anecdotes nicely complement the more academic parts.Major studies / papers are explained and mentioned, so even more advanced researchers should also benefit from this reading.Overall, I give it a four star rating. Books by James Montier on this topic would be my first recommendation.

An outstanding summary of behavioral economics and what you need to understand about the mistakes you are making with money, why they feel right even though they are wrong.

Good walkthrough of essential aspects to consider in making financial decisions and staying healthy when it comes to your bank account health. Totally absorbing. Simple and good advice for experts and novices alike.

I Think, that there were very interesting points touched as why consider the emotional state to make right decisions. From my particular point of view this is one of human weakenesses in the crucial moment of financial decisions.I gave that valoration because as the financial decisions are. Never take the perfect one.Thanks

If you have already read Think fast and slow, don't buy it .Otherwise jump on it!

An excellent book. Great content for improve the understanding of marriage of psychology and business. Easy to read. If you're interested in how psychology affect our decisions, you should read it.

Great

Um dos melhores livros que já li sobre economia comportamental aplicada a finanças e investimentos.Sem rodeios, os autores explicam como os vieses e as heurísticas impactam em nossa tomada de decisão no momento em que estamos vendendo/comprando ações, escolhendo onde investir, poupar e etc.Com perguntas para o leitor responder no estilo de joguinhos para facilitar a absorção do conteúdo, e também com muitas pesquisas no campo das ciências sociais, economia comportamental, neurociência e psicologia.Ao final de cada capítulo há um resumo do que foi abordado com dicas (no estilo bullet tips) para ajudar.Obrigatório para quem quer entender mais sobre o comportamento atrelado a finanças e investimentos.