Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics by Gary Belsky and Thomas Gilovich
Date Finished: March 4th, 2017
Reading Time: An afternoon
A great supplement to Thinking, Fast and Slow and Freakonomics. There is only so much behavioral economics research out there, so overlap with prominent books is unavoidable. Re-reading huge swaths of material cheapens the experience and you must carefully plan any behavioral economics kick. I’ve spaced the books over several years and I’ve found that the studies cited have clung to my brain like cicadas–I remembered nearly everything.
Why Smart People Make Big Money Mistakes And How To Correct Them can be classified as (mainly) Kahneman and Tversky’s research applied to personal finance. Ironically, this is what many people picked up Thinking, Fast and Slow hoping it would be. Way more approachable with sharp writing, this is a great book. However, the book did next to nothing for me as I’d previously read almost every study that was recounted in the book and read several personal finance blogs regularly. While I made it through the whole thing, I grew tired of it by chapter six.
If you only read one book on behavioral economics, this should be it. If you plan to read several, you need to start with Thinking, Fast and Slow or it will be valueless after seeing the concepts applied here.