Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics

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Why do so many otherwise rational individuals make irrational decisions when it comes to money? Financial journalist Gary Belsky and Cornell University psychology professor Thomas Gilovich contend the answers can be found--and the deficiencies remedied--with help from a relatively new science called behavioral economics. Still largely unknown outside academic circles, the field can be traced to research on the impact of rewards and punishments on human judgment and decision- making that first were undertaken at Jerusalem's Hebrew University some 30 years ago. In Why Smart People Make Big Money Mistakes , Belsky and Gilovich update this pioneering work and show readers how to understand exactly why they invest, spend, and save as they do. More importantly, using examples that everyone can identify with and language that anyone can understand, the authors offer dozens of workable suggestions that can help readers manage their money better. "We believe that by identifying the psychological causes behind many types of financial decisions," they write, "you can effectively change your behavior in ways that will ultimately put more money in your pocket and help you keep more of what you already have." --Howard Rothman

Book Description

Why do so many otherwise smart people make foolish financial choices? Why do investors sell stocks just before they skyrocket -- and cling to others as they plummer? Why do shoppers overspend when using credit cards rather than cash? What do our habits of tipping or buying lottery tickets indicate about our relationship with money?

In this fascinating investigation of the ways we spend, invest, save, borrow, and waste money, Gary Belsky and Thomas Gilovich reveal the psychological causes -- the patterns of thinking and decision making -- of irrational behavior. Most important, they focus on the decisions we make every day and, using entertaining examples, provide invaluable tips on avoiding the financial faux pas that can cost thousands of dollars each year.

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Why do so many otherwise smart people make foolish financial choices? Why do investors sell stocks just before they sky rocket -- and cling to others as they plummet? Why do shoppers overspend when using credit cards rather than cash? What do our habits of tipping or buying lottery tickets indicate about our relationship with money? In this fascinating investigation of the ways we spend, invest, save, borrow, and waste money, Gary, Belsky and Thomas Gilovich reveal the psychological causes -- the patterns of thinking and decision-making -- that result in irrational behavior. Most importantly they focus on the decisions we make everyday and, using entertaining examples, provide invaluable tips on avoiding the financial faux pas that can cost thousands of dollars each year.

Customer Reviews:

Great Introduction to Behavioral Finance.......2007-07-21

For more than 20 years I have been fascinated why so many people make financial decisions which defy rationality. Unfortunately, I find it extremely difficult to read and comprehend most of the research papers that has been done in the field of behavioral finance. The last 5 years have seen several good books explaining the results of the emerging field of behavioral finance. This book is one of those good books.

As a fan of index funds, I enjoyed reading this book's explanation and recommendation for suggesting index funds.

This book is very readable and is an excellent primer on the major concepts which are emerging from behavioral finance research.

Socrates was right when he uttered his famous quote "Know Thy Self". One of the hardest things to do is to understand why we do what we do sometimes. This book helps explain some of this natural human behavior, and how we can manage it to make more rational financial decisions.

I would suggest companion books to supplement this book including:

Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
How to Use Psychology to Achieve Your Financial Goals
Are You Using the Right Rules to Plan Your Retirement?
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing

Entertaining and good stuff.......2007-07-03

The book is easy to read and it also covers a lot of interesting topics. Highly recommended.

One of my favorite personal finance books.......2007-05-15

It's been years since I first read this book, but I still reference it often when talking about money decisions. It's readable, fun, and informative. I also enjoy the situational questions that begin each chapter. Even when you can see what point they're getting it, it's easy to see yourself making the same mistake in a moment of decision.

Out of the ivory tower and into your real life.......2007-01-09

this book is an easy well-written guide to understanding the academic field of behavioral economics and to bring it into the real world of our lives. The original research studies are really dry and hard to read even for a psychologist (I am one).....this is reader friendly and practical. Helped me understand some of the errors I made and still fall into....like noticing the stocks I have really done well with and forgetting about the ones that did not do so well so I think I have done really well in the market the past year..but then I look at the cold hard numbers and guess what? I did not do nearly as well I thought. Very helpful to use with patients who are having credit card woes (future dollars are so cheap). Dr. Mary Gresham Atlanta Ga

Are you mentally fit to make money decisions?.......2006-12-21

This book helps to show you some of the common pitfalls that people make when making decisions involving money. While there are topics related to investing, there are also general "money-decision" topics. There were actually some mistakes that I did not even think of but when I read them I realized that many of my friends made these mistakes. For me the biggest lesson that I learned was the part about mental accounting. This is one of those books that you think is all common sense but when you think about it, you realize that you too make these mistakes.

Book Description

The so-called culture industries--film, television and radio broadcasting, periodical and book publishing, video and sound recording--are noteworthy exceptions to the rhetorical commitment of Western countries to free trade as a major goal. These exceptions threatened to derail such high-profile negotiations as NAFTA and its predecessor, the Canada-US Free Trade Agreement, as well as the Uruguay Round of the GATT.

Conventional wisdom did not foresee trouble from this source, because these established industries are not commercial national champions, nor are they particularly large providers of jobs. As Patricia M. Goff shows, the standard trade literature considers the monetary value but doesn't recognize the symbolic importance of cultural production. In Limits to Liberalization, she traces the interplay between the commercial and the cultural.

Book Description

This digital document is an article from American Journal of Agricultural Economics, published by American Agricultural Economics Association on August 1, 2002. The length of the article is 3976 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Protection and trade liberalization under incomplete market integration.
Author: John Beghin
Publication: American Journal of Agricultural Economics (Refereed)
Date: August 1, 2002
Publisher: American Agricultural Economics Association
Volume: 84 Issue: 3 Page: 768(6)

Distributed by Thomson Gale

Trade, wages, and the political economy of trade protection: evidence from the Colombian trade reforms [An article from: Journal of International Economics]

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Trade, wages, and the political economy of trade protection: evidence from the Colombian trade reforms [An article from: Journal of International Economics]
P.K. Goldberg , and N. Pavcnik
Manufacturer: Elsevier
ProductGroup: Book
Binding: Digital
ASIN: B000RR4RZU

Book Description

This digital document is a journal article from Journal of International Economics, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
Worker industry affiliation plays a crucial role in how trade policy affects wages in many trade models. Yet, most research has focused on how trade policy affects wages by altering the economy-wide returns to a specific worker characteristic (i.e., skill or education) rather than through worker industry affiliation. This paper exploits drastic trade liberalizations in Colombia in the 1980s and 1990s to investigate the relationship between protection and industry wage premiums. We relate wage premiums to trade policy in an empirical framework that accounts for the political economy of trade protection. Accounting for time-invariant political economy factors is critical. When we do not control for unobserved time-invariant industry characteristics, we find that workers in protected sectors earn less than workers with similar observable characteristics in unprotected sectors. Allowing for industry fixed effects reverses the result: trade protection increases relative wages. This positive relationship persists when we instrument for tariff changes. Our results are in line with short- and medium-run models of trade where labor is immobile across sectors or, alternatively, with the existence of industry rents that are reduced by trade liberalization. In the context of the current debate on the rising income inequality in developing countries, our findings point to a source of disparity beyond the well-documented rise in the economy-wide skill premium: because tariff reductions were proportionately larger in sectors employing a high fraction of less-skilled workers, the decrease in the wage premiums in these sectors affected such workers disproportionately.

Book Description

This book deals with anabolic mechanisms which regulate eukaryotic protein synthesis, with particular emphasis on insulin and amino acids. Six chapters written by leading experts in the field provide both new data and comprehensive literature reviews. The regulation of both the eIF2 and eIF4 groups of initiation factors by signal transduction mechanisms is presented, and translation is related to cellular growth in response to nutrient and hormonal signals.

Book Description

Novel features of this book include the latest theories and applications of Time Series Modelling: - Intended for students, faculties and professionals having background of multivariate statistics, who wish to apply Time Series methods without toiling on Advanced Mathematics. - Highlights linear methods to yield ARIMA, SARIMA models and their multivariate (vector) extensions. - Time and Frequency Domains are given equal importance since these two are complementary. - Highlights nonlinear methods as well as State-Space, Dynamic Linear, Wavelet, Volatility and Long Memory Models. - Includes several solved case studies from mining, ore genesis, earthquakes, and climatology. - Includes several exercises and solved examples.

Book Description

One of the most important features of nonlinear systems with several degrees of freedom is the presence of internal resonances at certain relations between natural frequencies of different modes. This monograph is the first book devoted predominantly to internal resonances in different mechanical systems including those of practical importance.

The main purpose is to consider the internal resonances from the general point of view and to elucidate their role in applied nonlinear dynamics by using an efficient approach based on introducing the complex representation of equations of motion (together with the multiple scale method). Considered here are autonomous and nonautonomous discrete two-degree-of-freedom systems, infinite chains of particles, and continuous systems, including circular rings and cylindrical shells. Specific attention is paid to the case of one-to-one internal resonance in systems with cubic nonlinearities. Steady-state and nonstationary regimes of motion, interaction of the internal and external resonances at forced oscillations, and bifurcations of steady-state modes and their stability are systematically studied.

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Revenge of the Kudzu Debutantes

Kuduz Deb's Rule!!!

NOBODY DOES REVENGE BETTER THAN SOUTHERN WOMEN!

Read it in one day!

Funniest book I have read in years

Revenge of the Kudzu Debutantes: A Novel
Cathy Holton
Manufacturer: Ballantine Books
ProductGroup: Book
Binding: Hardcover

Comic | General | Literature & Fiction | Subjects | Books
Contemporary | General | Literature & Fiction | Subjects | Books
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The Secret Lives of the Kudzu Debutantes: A Novel

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Between, Georgia

Full of Grace

ASIN: 1400063671
Release Date: 2006-05-16

Book Description

kud • zu \kud-zü\ n: a ubiquitous vine/weed found in Southern climes that, left uncontrolled, will grow over any fixed object in its path, including trees, power lines, and the entire state of Georgia.

deb•u•tante \de-byu-tänt\ n: a young woman making a debut into society, easily spotted in white dress and pearl necklace. Common names include Muffy, Bootsy, and Bunny.

Eadie Boone is no shrinking violet. An artist and former beauty queen who married into one of the first families of Ithaca, Georgia, she tackles everything with gusto and flair. But tailing her wayward husband proves to be, well, an exasperating chore. If only Trevor would just see the light, dump his twenty-two-year-old hussy, and return home, Eadie’s creative energy could be put to better use. Now all she has to do is convince him.

Nita Broadwell, a good Southern girl from a good Southern family, is jolted out of complacency when she discovers condoms in her husband’s shirt pocket (“Maybe he’d found them on the ground and picked them up”). Between clinging to denial and dodging her overbearing mother-in-law, Nita is also trying to break her addiction to steamy bodice-ripper novels. Only now it appears she’s authoring her own real-life romance tale with a hunky handyman thirteen years her junior.

Lavonne Zibolsky–a transplanted Yankee, bless her heart–is saddled with planning the annual Broadwell & Boone law firm party. That and her lackluster marriage have her seeking solace in the contents of her refrigerator. If she could just put down the Rocky Road ice cream and peach pie, she might get around to finding a caterer, dropping sixty pounds, and figuring out how to fall in love with her husband again. Not necessarily in that order.

Bonded by years of friendship, these three women discover what else they have in common: lying, cheating spouses. So they heed their collective betrayals as a wake-up call and band together to exact sweet revenge. The take-charge trio will see to it that the punishment is just, exquisitely humiliating, and downright hilarious.

Cathy Holton’s debut novel is a delicious yarn of friendship and marriage, secrets and retribution, and how nothing stays hidden for long. Against a Southern backdrop of gentility and decorum, Revenge of the Kudzu Debutantes dares to abandon Junior League social graces in ways that would make even Scarlett O’Hara blush.

"It’s great fun reading about these women as they trade their tea for tequila and get smart, get out, and get even, with amusing, and surprising results." --Nancy Thayer, author of The Hot Flash Club

"Sly, smart, and full of great characters -- and then there’s that sweet, sweet revenge. Getting even has never been so creative. Or delicious." --Louise Shaffer, author of The Ladies of Garrison Gardens

Customer Reviews:

Revenge of the Kudzu Debutantes.......2007-09-24

This story had a chance to be funny, but the author lost it. I could barely wade through it, and wouldn't have if it hadn't been a "fun" selection by my book club. It wasn't fun. It was a chore. I only gave it a star above, because your system wouldn't let me leave it blank.

Kuduz Deb's Rule!!!.......2007-09-15

This has to be one of the best reads of this summer. Being divorced myself, I wished I could have done some of the things "the girls" did in this book. It was a fun read and I look forward to the next installment of "The Deb's"

NOBODY DOES REVENGE BETTER THAN SOUTHERN WOMEN!.......2007-08-24

I need not give a plot summary as others have done it so well. But I do wonder why Southern woman do revenge so much better than Northern women! Could it be the speech pattern of Southern women, all that "bless your heart" and you don't know you've been wounded until you faint from loss of blood? I laughed out loud, to the point of my husband asking me if I was okay, during the hunting trip scenes. And the Kudzu Ball description had me rolling on the floor. This was a delightful story and I can't wait to read the next book about these lively, wonderful women!

Read it in one day!.......2007-07-08

I loved this book. I felt Ms. Holton perfectly introduced each character and then showed us why they were the way they were. As someone else wrote, even though it is about revenge, it's not evil, just real. And funny! Looking forward to the next one!

Funniest book I have read in years.......2007-07-06

This is a must read for anyone that enjoys a good, funny, southern belle book. Ms. Holton has written a book that should be made into a movie. I hope someone sends the book to someone like Penny Marshall. Can't you see Julia Roberts, Cathy Bates and Bett Midler playing the lead roles?

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