We’re Not As Rational About Money As We Think We Are…

Dr John Jeffrey Zink, PhD wrote this in the foreword to Money for Life…in good times and bad:

• “Economists start by assuming that rationality and self-interest are the best way of understanding why people make the decisions they make (as if people only made rational decisions!). Consumer choice theory assumes that people derive utility, (defined as well being, satisfaction, happiness, or whatever) only from consumer goods. Of course, most economists recognize that there are limits to this view, but nonetheless this is the view at the heart of most discussions of trade, and is not far below the surface in most other discussions.
• “The economic point is that how you spend or manage your money can be thought of as an extension of your deepest self, your core values. And this realization lies at the core of the Money for Life philosophy. When the choices you make with your money are in alignment with your deepest values, your money and the decisions you make regarding it are more likely to make you happy. Your money, and the Economy is serving you and the ideals you hold dear, not vice versa.”

 

Russ Juskalian, in a Special for USA TODAY wrote this about Dr. Dan Ariely’s work in economics:

• “Can thinking about an arbitrary number influence how much you’re willing to pay for a computer keyboard, a bottle of wine or a box of chocolates? Apparently so — and the degree of influence may shock you.
• “In Predictably Irrational, Dan Ariely, a professor at Massachusetts Institute of Technology’s Media Laboratory and the Sloan School of Management, put the question to the test in an experiment involving a group of MBA students.
• “The experiment began with students being asked to write down the last two digits of their Social Security number. When the experiment ended, it revealed a pattern — that students with Social Security numbers ending in the highest-ending digits (80-99) were willing to pay more for items (the wine, the chocolates, etc.) than students with the lowest-ending Social Security numbers (01-20) were willing to pay.
• “Experiments such as this make up the foundation of Ariely’s book. Ariely argues that while economists continue to base theories on the idea that humans are rational — that we make optimal economic choices based the information we have — the notion is fundamentally flawed. Not only are we irrational, says Ariely, but when and in what form irrationality surfaces is predictable.
• “Economics can be a tough subject to tackle, but Predictably Irrational is surprisingly entertaining. While the book belongs in the same family as Freakonomics, don’t expect the same kind of theoretical hand-waving. Ariely is less interested in regression analysis and more interested in simple behavioral experiments such as trying to determine if the first person to order a beer at the table is happiest with his choice (yes).”

You can read the USA Today article here – http://usatoday.printthis.clickability.com/pt/cpt?action=cpt&title=Not+as+rational+as+we+think+we+are+-+USATODAY.com&expire=&urlID=26739216&fb=Y&url=http%3A%2F%2Fwww.usatoday.com%2Fmoney%2Fbooks%2Freviews%2F2008-02-24-predictable-irrational_N.htm&partnerID=1661

Everything we do is affected by our minds, our hearts our hormones and our bodies. The merchants of misinformation and their minions, the snake oil sales reps from Wall Street, want you to believe that they have found the sourcerer’s stone and that all you have to do to achieve wealth is follow their “system.”

BUNK!

Discover a better way that relies on awareness of who you are and how personal economies actually work instead of adherence to a rigidly drawn plan that serves the Behemoth that wrote it much better than it serves you –> www.TheMoneyForLifeBook.com

__________________________________________

Today is your last chance to take the Financial Satisfaction Survey - the link to this anonymous two minute survey is on the side bar —>

Tags: 401(k) plans, 801(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market. stocks, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, Money, money book, money books, money for life, money under management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life insurance company, new your life, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Who’s helping you, Whole Life Insurance, why buy whole life insurance, why whole life insurance