Your Money and Your Brain Summary


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Originally published at: https://blog.12min.com/your-money-and-your-brain-summary/

How the New Science of Neuroeconomics Can Help Make You Rich


The impact of neuroeconomics on making lucrative investment choices and decisions.

Critical thinking is not just for fun, but also for profits.

Who Should Read "Your Money and Your Brain"? And Why?

Have you ever been caught off guard and why did that happen? Search your mind, and you’ll see that external influences don’t ask for permission to run your life. Indeed, get the big picture by focusing only on matters that you can affect, and leave the others one aside.

These factors often tend to make us nervous, but on the other side, they are all beneficial. The good part refers to exposing your handling-pressure potential, which is a complete rarity in this world.

The author of “Your Money and Your Brain “Jason engage in two daunting subjects – financing and neural research. He succeeds making them both available and intriguing to the general audience.

Not even the competition can deny the fact – that this book has its place among the comprehensive and credible content ever written.

Given these points, there is not much to say except that “Your Money and Your Brain” is a book without restrictions designed for everyone.

About Jason Zweig

Jason Zweig currently works as a senior writer and part-time a guest columnist for CNN and Money Magazine. He edited the Intelligent Investor – a book written by Benjamin Graham. Many books stand by his name like “Where Are the Customers’ Yachts” “A Good Hard Look at Wall Street” and others which he co-authored.

"Your Money and Your Brain Summary"

From Benjamin Graham to Warren Buffett, investing contradicts the conventional wisdom emerging from the old-fashioned investors. Financial experts in the 20th century, adhered to several unproven, misleading theories which made the society believe in the wrongly managed processes.

Even so, the world and especially the U.S. continued to evolve in all matters of human life. That system walks the same road now again because no investor has yet found a definition – that will calculate everything.

You can start with cost/benefit ratio, ROI, Break-Even Point, or any other economic feasibility but neither one of them will generate results credible in all aspects. Some methods will cover long-term perspective; others may focus on the upcoming results and so on.

Many people even nowadays have a strong affection for talent, or skill whatsoever, but the real value comes from analyzes. The idea that hard work pays off is no strange to anyone; it also works with stocks. Eagerness and desire to learn more, are the only ingredients for success.

Don’t look far to find the culprit for your failures; it’s right there in front of you.

Sometimes, а correlation between understanding, knowledge, and hard work doesn’t have to coexist in order for the process to unfold effortlessly. There is no shortage of exceptions, that’s for sure.

Even Nobel laureates who have dug deep into the financial logic of investing admitted that mistakes are unavoidable. This statement embraces or includes all successful investors. It all starts with knowledge and preparation, but it relies on motivation, research, durability, and persistence.

In pursuance, of prosperity people neglect some major steps that are vital for getting there. The human brain doesn’t function on good/bad mode; the decision-making process sure is more complicated than monetary gains and losses.

In addition, it’s vital to mention the versatility existing in different sections. Readers will be utmostly pleased to specialize in cognitive science and investment matters. Of course, the duration of this process can never be clearly identified, but that doesn’t put you in an awkward position.

The material is right there in front of you, every person interested in personal development and growth will be keen to explore the benefits of adopting a proper approach to the market.

Whether you are a beginner or a pro in personal finance, doesn’t matter. This book has no shortage of quality strategies that even the most experienced investors could find intriguing.

Surprises at work, conflicts, risk, intuition, emotions, are some stuff that comes uninvited. Don’t blame feelings, nor any other element – somehow everything out there is shaping you into a better person/investor. Understand how to use them, and don’t look for a guilty party.

Don’t lose self-control when dealing with personal investing. Just like anything else, practice makes perfect – you don’t need any particular background to be an ideal fit. To sum it up, we promote this magnificent masterpiece because of the valuable information that the author has to offer.

As such it is highly recommended for any person who wishes to take the next step in investment-related topics.

Key Lessons from “Your Money and Your Brain”

1. Forecasting power 2. Understand what makes a reasonable investor 3. Being overly confident it’s not advisable either

Forecasting power

It may seem strange, but even now people still believe in homework effect. This method indicates that stock knowledge lies in earlier preparations – an entirely false theory. Several reasons support this claim.

First, stock price relies on millions of analysts, second – transaction costs and other expenses influence the overall market – so you cannot have a total knowledge.

Understand what makes a reasonable investor

Being an investor It’s not a backbreaking work, under any circumstances. Time allocated to education is time well-spent, however, it never ends there.

Investors prefer the term rational analysts, as its name implies this is a concept that emphasizes the hard work element of investing.

Being overly confident it’s not advisable either

Numerous studies illustrate that people quite often overestimate their capabilities by ignoring the facts.

Self-esteem is an essential part of life, but neglecting knowledge and access to valuable information as some secondary elements is a strategy leading to financial collapse.

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“Your Money and Your Brain” Quotes

[bctt tweet="The good news is that neuroeconomics can help you bring your confidence into synch with reality, making you a better investor than you may ever have imagined." username="get12min"]

[bctt tweet=“Correlation is not causation.” username=“get12min”]

[bctt tweet=“Smart investors know that it’s often a good idea to act like a four-year-old.” username=“get12min”]

[bctt tweet=“Over three years, a chimp flinging darts in the dark has a 12.5% chance of outperforming the market average.” username=“get12min”]

[bctt tweet=“Avoiding whatever felt like a loss probably helped keep our ancestors alive.” username=“get12min”]

Our Critical Review

This outstanding book is not the first in line – among materials written to demonstrate cognitive and behavioral research theories that apply to personal investing. Nevertheless, it occupies а respectable position due to its high-quality examples and methods of dealing with market uncertainty.