Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich

by Jason Zweig

Book Overview

What happens inside our brains when we think about money? Quite a lot, actually, and some of it isn't good for our financial health. InYour Money and Your Brain,Jason Zweig explains why smart people make stupid financial decisions -- and what they can do to avoid these mistakes. Zweig, a veteran financial journalist, draws on the latest research in neuroeconomics, a fascinating new discipline that combines psychology, neuroscience, and economics to...

• Format: Hardcover
• Language: English
• ISBN: 074327668X
• ISBN13: 9780743276689
• Release Date: August 2007
• Publisher: Simon & Schuster
• Length: 340 Pages
• Weight: 1.28 lbs.
• Dimensions: 1.2" x 6.5" x 9.3"

Customer Reviews

Amazing explanation of why we do what we do with money

I believe that investors are their own worst enemies because they are not equipped with an understanding of how to think about financial decisions. In this book, the author proves that investing generates powerful emotions that lead us to take certain actions that may not be in our best interest. He says that there is nothing in our lives that makes smart people feel as stupid as investing does. Being knowledgeable about this topic can help us make better investment decisions that will lead to more wealth. I don't believe that we can maximize our wealth until we learn how to control our minds. What I like about this book is that the research provides the biological explanation of what goes on in our brains when we make financial decisions. It was interesting to learn that the brain of a person who thinks is about to make money is almost identical to that of a cocaine addict. This book really helped me understand myself, clients, and other investors better, and why we make decisions that we make. It was simply a fascinating read. - Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Your Mind's Effect on your Money

Controlling one's emotions is a major key to successful money management. No one who has withered under the emotional pressure of making split second investment decision will argue that it is not. Financial writer Jason Zweig combining concepts in neuroscience, economics and psychology to explain how our biology drives us toward good or bad investment decisions. He argues our brains lead us to self-deception. We are oath to admit our lack of financial knowledge. We overestimate our ability to perform. We believe we're smart enough to forecast the future even when we have been explicitly told that it is unpredictable. Our impetuousness leads to mistakes of action rather than inaction. In short, although we see ourselves as rational beings; we make irrational investment decisions. His book blends tales from his visits to neuroscience labs with stories of investing mistakes. From them he pulls lessons and counsel on how investors can make more profitable investment decisions. They are: 1. Take a global view. 2. Hope for the best: expect the worst. 3. Investigate; then invest. 4. Never say always. 5. Know what you do not know. 6. Past is not prologue. 7. Weigh what they say. 8. If it sounds too good to be true, it probably is. 9. Costs are killer. 10. Eggs go splat. Another that should be added to the list is The Paradox of Choice: Why More Is Less. More general in its approach, it cites many of the same studies. Schwartz, a Swarthmore College professor, cited research from psychologists, economists, market researchers and decision scientists to make five counter-intuitive arguments: We would be better off if we: 1. Voluntarily constrained our freedom of choice. 2. Sought "good enough" instead of "the best." 3. Lowered our expectations about decision's results. 4. Made nonreversible decisions. 5. Paid less attention to what others around us do. Thoroughly researched, Your Money and Your Brain needs to be studied by anyone seeking to make wiser and more profitable investment decisions.

Your Money & Your Brain / Author: Jason Zweig

This book is just amazing.Besides helping you understand how to be a better investor,it opens up a whole new universe in learning how and why us humans think and act the way we do. To say that, most everything we think we know about investing and risk is wrong, is a "HUGE" understatement. The applications that can be put into practice from this book,reach much more farther than just the investing world.I already have been witness to the newly gain knowledge by aplying the principles to myself and unto others.To try and illustrate how powerful this book is,at this very moment I am writing this review, I have not reach the half of it.

Great Science, Great Advice

Zweig has packed a lot of cutting-edge neuroscience into a very entertaining book. The lessons are clearly presented and the advice is very simple and very practical.

Inner Workings of the Investing Brain

As the title reveals, this book is about the inner workings of the investing brain. It not only explains the mistakes we all make, it takes the next step by telling us what we can do to become better investors. First of all, this book will dispel any notion that our brains are predisposed to act only in ways that are about increasing wealth. As it happens, our financial decision-making is more about intangibles, such as avoiding regret and achieving pride. Never underestimate the value that comes with bragging about some brilliant investment to anybody who will listen. Mr. Zweig explains that we really have two brains. Our reflexive brain gets the first crack at decision making, and is essentially based on intuition or how we feel. Our reflective brain, on the other hand, is more logical. The problem is that we usually don't know which part of the brain is at the switch when we make any decision. One key to maximizing wealth is to give the reflective brain some time to respond, and not to react immediately to our gut instinct. Just when I thought the book couldn't get any better, I read the last chapter on "happiness." It explored the relationship between money and happiness. In spite of the lip service that is paid to believing that money doesn't buy happiness, we all seem to be on the treadmill of acquiring as much of it as we can. The disappointment sets in when we find that raise we got, or that windfall profit, doesn't actually make us happier for long periods. In summary, content is fascinating but it is Mr. Zweig's writing style that kept me reading when I could barely keep my eyes open. It is a rare gem in its genre, a book that will change your way of investing and your life, and be fun to read.