My Smart Retirement

You may not realize it, but most of us hold an engrained bias about money. On today’s episode, we’ll break down a recent study by Morning Star, that details why people make the decisions they make when it comes to their finances. How much could a money bias be costing you? Everyone has their own attitudes about money. Those with a present bias focus on living today rather than contemplating long-term outcomes.  People with low a low level of present bias were three times more likely to spend less than their monthly income and seven times more likely to plan for the future. If your goal is instant gratification, you may be losing out on money. Another common bias is base rate neglect. This is where you are judging the probability of something happening based on new information while ignoring the original assumption. We see this with over-selling and buying in investing. Those with a high level of base rate neglect generally have lower savings.  With overconfidence, we see people put too much weight into making