Why We Don't Understand Money: How to fix your thinking flaws - [Cognitive Biases #3]
Growth Mindset Psychology: The Science of Self-Improvement
Gambler's Fallacy: Misreading Randomness
Sam outlines the gambler's fallacy, its ubiquity, and real-world consequences like judicial inconsistency.
Think you konw what you're doing with you money on your mind? Think again.
You walk into a cinema and buy the $12 large popcorn because the medium is $10. You think you got a deal, but you actually just fell for the "Decoy Effect."
Your brain is wired to latch onto the first number it sees.
In this episode, I break down the psychological pricing traps that businesses use to hack your wallet.
We also cover why Sir Isaac Newton lost his fortune to the Sunk Cost Fallacy and why having more information actually makes you a worse investor. It’s not about being smart; it’s about understanding the system.
Key Takeaways:
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"Consider the Opposite" strategy: Mentally flip the price anchor to neutralize the urge to buy.
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Spot the Decoy: Identify products that exist solely to make expensive options look cheap.
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The 5-Point Rule: Stop researching after five data points to avoid the Information Bias trap.
Listen now to stop your brain from leaking money on deals that aren't real.
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Learn about the evolving story of the human species and our ideas told in chronological order.
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Growth Mindset Psychology:
Sam Webster explores the psychology of happiness, satisfaction, purpose, and growth through the lens of self-improvement.
CHAPTERS
00:00 Money Traps - Financial Cognitive biases #2
02:49 The Opposite Strategy
08:01 Decoy Effect
10:44 Gambler's Fallacy
16:48 Sunk Cost Fallacy
19:24 Bad Prediction Flaws
19:59 Overconfidence Bias
21:33 Information Bias
25:43 Send Off
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