Your Brain is Lying to You About Your Money

The Growth Insight 🌱

Your Brain is Lying to You About Your Money

"I'm not wrong - maybe everyone else is!"

Sound familiar? We've all been there.

That moment when we're faced with evidence that we messed up, but instead of admitting it, we dig our heels in deeper. It's like watching someone insist the earth is flat while orbiting it in a spaceship - the truth is right there, but they just won't see it.

This mental gymnastics isn't just about stubbornness - it's about protecting our ego. And nowhere does it bite us harder than in investing.

Picture this: You've put your money into a "can't-lose" stock, convinced by glowing reviews from your favorite finance guru. The stock starts tanking, but you're still scrolling through Twitter, desperately looking for posts that say "buy the dip!" Meanwhile, your portfolio is bleeding money.

Here's why this happens:

• Our brains are wired to seek information that makes us feel good about our decisions

• We'd rather be consistently wrong than admit we made a mistake

• The more time, money, or emotion we've invested, the harder it is to let go

The Fix?

Here's what actually works:

1. Play devil's advocate with yourself. Seriously, pretend you're arguing against your own position

2. Set hard rules before making decisions (like "I'll sell if it drops 20%") and stick to them

3. Keep a decision diary - write down why you made each choice

4. Diversify not just your investments, but your information sources too

Remember: The most successful investors aren't the ones who never make mistakes - they're the ones who admit them quickly and learn from them. Warren Buffett didn't become a billionaire by being right all the time. He got there by being honest with himself when he was wrong.

So next time you're tempted to double down on a failing investment or ignore evidence that contradicts your views, ask yourself:

Would you rather be right, or would you rather be rich?

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