Welcome to a new week and a new theme here on the One Minute Retirement Tip! Last week, I talked about behavioral finance 101. This week, I’m continuing with the behavioral finance theme to go deeper on some of the biggest behavioral finance blunders.

Last week was a good overview, but we really gotta dive deeper into this essential topic, so that’s what I’m doing this week.  

Let’s start with defining behavioral finance. According to the corporate finance institute, Behavioral finance is “the study of the influence of psychology on the behavior of investors or financial analysts. It also includes the subsequent effects on the markets. It focuses on the fact that investors are not always rational, have limits to their self-control, and are influenced by their own biases.”

Our psychology and our biases impact how we make financial decisions and investment decisions in a big, big way! Understanding that there is a lot happening in the background each time you make a decision will help you take a pause, and hopefully make better financial decisions as a result. 

So stick around with me this week as I talk about the inner workings of that mind of yours and how sometimes it can lead you astray. I’ll provide real world examples of how behavioral finance concepts like anchoring and choice overload can lead you down the wrong path if you aren’t careful. 

That’s it for today, but before you go, would I be correct in saying that your retirement is perhaps the most important financial decision you’ll ever make? You want to get it right. Well, so do I. For the last 12 years, I’ve been helping clients just like you make the transition into retirement. If you want to talk one-on-one with me about whether or not you can retire, head on over to truenorthra.com, where you can book a 15 minute call with me, at a time that’s convenient for you. The call is confidential, free, and I promise to help guide you on whatever is weighing most on your mind right now regarding your retirement. So head on over to truenorthra.com and book a call today. 

That’s it for today, thanks for listening. My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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