The Mistakes we Make

• We assume that being wealthy is the same as being financially literate.

  
  

• We equate sophistication with value.

  
  

• We allow the weight of inertia to hold us back from making positive change.

  
  

• When we think about returns, we think about absolute returns. We don’t consider relative returns, nor real returns and we definitely don’t stop to think about opportunity cost.

  
  

• We massively over estimate our own ability to behave well as investors.

  
  

• We think a year or two represents a long period of time.

  
  

• We ascribe our successes to nous, but our failures to luck.

  
  

• We assume ours’ is the only right way to spend money.

  
  

• We deride other folks’ actions as illogical, without first stopping to question our own.

  
  

• We think the more effort we put into the investing, the better an outcome we will get.

  
  

• When we are young, we spend too much time trying to optimise our investment strategy - at a time in life when we should be optimising our saving strategy.

  
  

• We often assume the worst of our children when it comes to money. They might just surprise us.

  
  

• We think that managing our finances is about hitting winners, when in reality it is about avoiding cock ups.

  
  

• We are prepared to over-pay for certainty of outcome.

  
  

• If in doubt, we assume the answer is “more”.

  
  

• We assume the future will be different to the past.

  
  

• We assume the future will be the same as the past.

  
  

• We over ascribe value to money, and under value our time.