162: Money Psychology - Your Mind is Not Your Friend Right Now

In this timely episode, recorded during the coronavirus pandemic of 2020, we’re talking about the psychology behind how we think about money, the mistakes we make, and why we’re so prone to irrational behavior in both good times and bad.

It’s hard not to get emotional when it comes to money. The stock market took a sharp negative turn recently and the short-term future of the economy is uncertain to say the least. Many Americans are either out of work or find themselves having to pivot to earn money. It would be 100% normal to be panicking now, however, it doesn’t have to be that way.

In this interview, Jeff and I talk about how, if you’re attempting to “react” to what’s happened, you’re not likely to be making decisions that are doing you any good.

For example, people are asking me questions like, “Should we sell out of the market at least partially?” or “How can I make sure to get in at the bottom?” or “Don’t you think hotel stocks are poised for a great return?”

Despite what the media would have you believe, nobody knows the short-term future so these questions cannot be answered. More importantly, investing is about size and consistency, not timing, and it’s important to take a look at it from a big-picture perspective.

As we navigate the coronavirus crisis, our minds are more vulnerable than ever to tricks, traps, and temptations. If you’re wondering how to invest, what to do with your investments, or just why you’re reacting the way you are to reading the news or checking the market, today’s episode of Profit Boss® is for you.

I’m joined by author, speaker, pundit, comedian, and behavioral science advocate Jeff Kreisler. In addition to writing for TV, politicians, CEOs, and sharing insights on networks like CNN, Fox News, MSNBC, and SiriusXM while he’s not touring the planet, Jeff runs Peoplescience.com. He and past Profit Boss® guest Dan Ariely recently co-wrote Dollars and Sense: How We Misthink Money and How To Spend Smarter, where they hilariously tackle the behavioral science behind our financial decisions.

So, are you ready to stop letting the news cycle leave you wondering if now’s a good time to buy or sell, identify financial traps before you fall prey to them, and discover frameworks that will help you use human nature to your benefit? Then you don’t want to miss this episode. Tune in to Profit Boss® Radio today!

Here’s what you’ll find out in this week’s episode of Profit Boss® Radio:

• Why we participate in emotional, panicked, and irrational behavior, like hoarding toilet paper, when we see others do it - and how a crisis like the coronavirus makes bad thinking even worse when it comes to money.
• The reason it’s so important to take a 30,000 foot view of your finances during a recession or extended downturn.
• Why our brains struggle so much to understand money - and why the things that make money “awesome” in Jeff’s words are also the things that make it so complicated.
• The things people are most frequently getting wrong right now - and why we’re so prone to making terrible tradeoffs for the future in this moment.
• Why making your IRA contributions automatic and paying your bills first has a significant, positive impact on your ability to save.
• Why we’re so much more prone to stressing about small spends instead of big ones. 

Show Notes

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Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.