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Introduction – The Path of Least Resistance

Read the Introduction

Chapter 1 – Making Sense of What You See
  • Anchoring: An Invisible Hand
  • Representativeness: If It Walks Like a Duck
  • Money Illusion: The Rule of 72 and the Risk of Inflation
  • Recency Effect: A Clear and Present Danger
  • Reversion to the Mean: That Makes Sense but Doesn’t Answer Anything
  • Availability Bias and Distortion: Overestimating What You Can Easily Recall
  • Familiarity Bias: Recognizing a Stranger
  • Proportional Money Effect: Why We Save Pennies Only to Neglect Dollars
  • Mental Accounting: Pigeonholing Money
  • Endowment Effect: Loyalty Reward Points are Not Free Money
  • Status Quo Bias: The Influence of Inertia
Chapter 2 – Controlling Risk
  • Conservativism: Close but No Cigar
  • Gambler’s Fallacy: Heads or Tails?
  • Possibility and Certainty Effect: A Bird in the Hand is Worth Two in the Bush
  • House Money and Break-Even Effect: What Just Happened?
  • Disposition Effect: The Worst Time to Lock in a Profit
  • Loss Aversion and Fals Risk Control: Ante Up!
Chapter 3 – Wanting to Be Right
  • Overconfidence: We All Can’t Be Above Average
  • Hindsight Bias is Convincing: I Knew It!
  • Cognitive Dissonance: The Grapes Were Sour Anyway
  • Confirmation Bias: Buying and Selling a Boat
  • Availability Bias, Recency Effect, and Real Estate: House Prices Always Rise, Right?
  • Sunk Cost: Why Camping Seems Affordable
  • Barnum and Forer Effect: A Fool is Born Every Minute
  • Loss Aversion Undermines Your Beliefs: Trading Money for Sleep
  • Herd Mentality: consensus Hurts Performance
Chapter 4 – Developing Your Personal Economic Values
Chapter 5 – Adopting Unbiased Habits
  • The Point of Impact
  • Don’t Take It Personally
  • Quantify Your Returns
  • Keep a Journal of Investment Decisions
  • The Power of SMT
  • Negotiations
  • Just Pick One
  • Automate, Outsource, and Schedule
  • Stop Checking Your Investments
  • Establish Investment Constraints
  • Stick to Your Plan
  • Reframing Decisions
  • No Safety in Numbers
  • Money Doesn’t Care Where it Came From
  • Craft Your Personal Investment Policy Statement (click here)
  • I Knew-It-All-the-Time
  • Cut Your losses
  • Trees Don’t Reach the Sky
  • In the Absence of Research
  • Be Average
  • The Unbiased Habit Checklist
Chapter 6 – What an Investment Advisor Can and Cannot Do
  • The Bottom Line
  • Bull Markets and DIY
  • Is Passive Investing a Silver Bullet?
  • Intuition
  • Avioding Hindsight Bias with Training
  • When to Trust Expert Investment Advice
  • Know What You Don’t Know
  • Bias Resistance
  • Portfolio Abandonment
Chapter 7 – Can Money Buy You Happiness?
  • Happiness, Work, and Retirement
  • Happiness and Spending Money
  • Happiness and Gluttony
  • Health, Happiness, and Your Money
  • How Much Is Enough?