Tuesday, May 19, 2020

ANC On The Money: Understanding Money Behavior

Here is the link.

How to avoid money mistakes

2:02
4 areas of money management

  • cash
  • debt
  • risk
  • wealth
Common money mistakes are lack of budgeting and over borrowing

Behavior finance



Sore losers

Lock-in profit
Gambler fallacy

When it comes to loose change, people find ways to spend it.

Glass half-full solution

  • Can you save 20% of income? (outright loss)
  • Can you live on 80% of income? (Foregone gain)
Money illusion / bigness bias

To us, when something is small it's insignificant and when something is big, it's more valuable.

0.99/ month, 14% annual interest 

Emotions affect the way we look at money. 

11:05 
Jesse livermore:

"If there are ABCs in investing, there are also FGHIs... FEAR, GREED, HOPE and IGNORANCE"

Financial denial - acceptance of money mistakes 


14:30
grocery store shopping - alternative brand - grouch low
More expensive - eye level

15:14 Answer questions

18:52
Question:
Most days I spend more than what I should. How can I stick to my daily budget?

Answer:


  • Discipline yourself
  • Start saving
  • Live within your income level
Question:
Her mom sold a house. How does she invest the money?

Answer:
  • Investing not just about the return you want. 
  • It also involves risks
  • Ask a financial planner to do a projection of what's needed to live a certain life style. 

Balanced fund, less risk - a doctor earns good income





No comments:

Post a Comment