WitsMo

“When You Comin’ Home Dad?” Everything You Wanted to Know About Your Workaholic Father, and How To Get Him to Slow Down and Focus on Your Family

Lily’s dad, Tom, is a 43-year-old marketing exec. working at a Fortune 500 company. He was recently promoted to a senior vice president position at the firm. Along with new flexibilities on his work schedule, his pay has also increased dramatically. This means that Lily’s mom can now quit her part-time job in order to spend more time with the children, which is the fulfillment of a long-term…

Money Behavioral Mistake #6. Mental Accounting

Emancipate yourselves from mental slavery; none but ourselves can free our minds

– Bob Marley –

Mental accounting involves treating one dollar different from another depending on where it comes from, where it is kept, and how it is spent. This can lead to being too quick to spend, too slow to save, and too conservative or aggressive with investing.

Mental accounting can lead to being too…

Money Behavioral Mistake #5. Anchoring

Vision is the art of seeing what is invisible to others.

– Jonathan Swift

Anchoring refers to the tendency to hold to certain beliefs even when faced with new information that should alter those beliefs, thereby creating, in effect, tunnel vision. In other words, people start at an initial mental reference point based on past experience. This might lead to overweighting irrelevant past data or…

Money Behavioral Mistake #4. Hindsight Bias

Let us not look back in anger, nor forward in fear, but around us in awareness

– James Thurber

This is the characteristic of investors, when looking back, seeing events that took place in the past as having been more predictable than they seemed before they happened. Likewise, things that didn’t happen seem, with hindsight, much less likely to have happened than they did beforehand. In other…