A white paper has just been released by the Financial Markets Authority of New Zealand. It discusses ideas similar to the ones covered in the first three chapters of my book, "Legal Tender." It looks at the three things that negatively impact our ability to make sound financial decisions:
- preferences – our emotions and psychological experiences;
- beliefs – what we believe is likely, and what we believe about our own abilities; and
- decision-making rules – the flawed short-cuts we use to assess information.
And four strategies that can help us to overcome them.