Sep 30, 2020
You’re smart. You’ve made a few dollars. You’ve done what the
financial books have told you. You’ve listened to the podcasts,
you’ve gone to the websites.
So why isn’t it working? Why aren’t you getting ahead?
Maybe your emotions and expectations are getting in the way of
good sense. Maybe you’re paying attention to the wrong people.
We’ve all made mistakes with money, sometimes unknowingly,
sometimes recklessly. We all have poor habits that hold us
That’s what I’m going to talk to Tom Corley about today.
We’ll chat about why smart people do stupid things with their
money, and hopefully, by the end of the conversation, you’ll be
more aware, and you won’t make those mistakes.
12 Reasons Why People Make Money Mistakes
- Ego – Ego-driven money decisions prevent you
from managing whatever money you do have in a prudent manner.
- Emotion – Spending decisions that are based on
spur of the moment emotions.
- Bias – Making money decisions that are not
fact-based but, instead, ideologically-based.
- Ignorance – Not doing your homework. Taking
uneducated risks could be Ego-based or Ignorance-based.
- Overthinking – Simple solutions are usually
the correct solutions. Seeking more complicated solutions leads to
- Fear – Never make money decisions out of fear.
An example would be liquidating investments during a downturn in
the stock market.
- Stress – Studies have shown that stress
reduces your IQ by 13%. Never make money decisions when you are
- Poor Decision-Making Habit – Making frequent
poor decisions is a habit. There are a number of reasons why you
make bad decisions: Ego, Emotions, Bias, Ignorance, Fear, Stress,
Tired or Hungry, and Impairment.
- Desperate Decisions – These are decisions that
you make from a position of weakness. They are typically the result
of prior bad decisions and always forced upon you by some third
party, such as a lender, government agency, credit card company,
employer, spouse, family, or friends.
- Impulse – Making spur of the moment purchases.
Related to emotion-based spending mistakes but could also be caused
by Decision Fatigue.
- Externalities – Keep up with the Jones’s
spending decisions are an example. Other reasons for making bad
money decisions can be due to pressure from a spouse, family,
friends, work colleagues, etc.
- Impatience – Making poor money decisions, such
as liquidating investments during a downturn in the market can be
fear-based or driven by a lack of patience. Making any major
purchase without wanting to spend the time on doing your homework,
is another example.
Links and Resources:
Corley - Rich Habits
Get the team at Metropole
to help build your personal Strategic Property Plan
Click here and have a chat with us
Get your own copy of our international bestseller Rich Habits Poor Habits
Shownotes plus more here:
Why Smart People do Stupid Things with Money with Tom
Some of our favourite quotes from the show:
“The trouble today with social media is you’re seeing people’s
highlight reels and it looks like their life’s really good. You
don’t know all the hard work that they’ve done to get there.” –
“We’re not pointing the finger at people, we’re not saying look
how bad you are. We’re saying, if you want to improve your
financial position, what you should be doing is having a look at
your habits.” –Michael Yardney
“If you recognize some of these habits in yourself, maybe now’s
the time to replace them with some good habits.” – Michael
PLEASE LEAVE US A REVIEW
Reviews are hugely important to me because they help new people
discover this podcast. If you enjoyed listening to this episode,
please leave a review on iTunes - it's your way of passing the
message forward to others and saying thank you to me. Here's