The Psychology Of Money: 8 Ways To Improve Your Money Mindset

RADICALFIRE.COM

Human cognition can be messy. Each of us carries a collection of cognitive biases, irrational beliefs, and behavioral quirks.

Let’s look at a few far-reaching psychological concepts that play an outsized role in our financial lives

1. Social Proof

Long-term investing usually works best for those who choose a simple, reliable strategy and stick to it regardless of what’s  popular today.

2. The Pesky Joneses

The only cure to keeping up with the Joneses is often to create distance from them. Surround yourself with people that share similar money values to you.

3. The Gambler’s Fallacy

The gambler’s fallacy is the often-unconscious expectation that past outcomes will unduly influence future events.

4. The Scarcity Mindset

The scarcity mindset drives people to continually buy more things, fill more spaces, and generally expand their lifestyle.

Making decisions doesn’t always come naturally to us. Ultimately, it’s best to remember that none of us is perfect and keep doing our best to work with the mindset and knowledge  we have.

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