The Psychological Factors Affecting Our Financial Decisions
Whether you are budgeting or investing, you are grappling with several psychological factors affecting your financial decisions.
Read MoreManaging money well is not so much about how much we know, but more about how we behave. Learning about the psychology of money can provide you with valuable insights into your behavior around finances. Understanding and modifying those behaviors can help you set yourself on a path of financial success.
Whether you are budgeting or investing, you are grappling with several psychological factors affecting your financial decisions.
Read MoreSunk cost fallacy is a cognitive bias that causes people to include non-recoverable past costs in their decision-making process.
Anchoring is a cognitive bias that describes the human tendency to overly rely on the first piece of information we find or is offered to us.
Loss aversion is a cognitive bias, or a systematic pattern of thinking, that refers to our natural inclination to focus on setbacks more than progress.
Even though both fallacies and biases are very different from each other, they are both typically concerned with the same issues - errors in reasoning.
The red herring is an attempt to divert the attention away from the relevant issue by introducing another irrelevant issue.
Straw man argument is a type of logical fallacy that occurs when someone deliberately distorts or misrepresents their opponent's position.
Ad hominem fallacy is based on personal and irrelevant attacks against the source of an argument instead of addressing the argument itself.
Appeal to emotion occurs when someone uses emotional appeals instead of relevant facts and logic to support a claim.
The appeal to authority fallacy occurs when one misuses the testimonies of perceived authorities in an attempt to back up a certain claim or position.
Appeal to tradition is a logical fallacy based on the assumption that a traditional practice must be better than its newer alternative.
Post hoc ergo propter hoc occurs when someone assumes that one event must have caused a later event simply because it happened after the other.
A false dilemma occurs when a limited number of choices, outcomes, or views are presented as the only possibilities.
The genetic fallacy is a logical fallacy in which someone accepts a claim as true or false solely on the basis of its origin.
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