Earlier this year, I completed a course on behavioural economics at Harvard Business School to learn more about the processes we all use to make financial decisions.
I think that this topic is so important because, when it comes to investing and managing our money, our emotions have the ability to lead us astray - so much so we could become our own worst enemies. Of course, decisions like our portfolios’ asset allocation are crucially important in investing, but ultimately decisions like these are wasted if investors make irrational decisions at the worst possible time. The reality is, biases affect our decisions and we need to be aware of them so they’re not in control.
During the program I was fortunate to learn from some of the best professors in the world on the topic of behavioural economics, and I found it so interesting that I thought, why not have a chat with them for an episode of the Richards Report?
Well, there was just too much good content for just one episode, so I’ve split it up over a four-episode ‘quadrilogy’ on behavioural economics.
We’re lucky to be hearing from two of my lecturers from over in Boston. John Beshears is an Associate Professor of Business Administration in the Negotiation, Organizations & Markets Unit. Before joining HBS, he was an assistant professor of finance at the Stanford Graduate School of Business. His recent work includes studying participation in retirement savings plans, household investment decisions, and health-care choices.
I also speak with Michael Norton, the Professor of Business Administration at the Harvard Business School, and a member of Harvard’s Behavioral Insights Group. He co-wrote Happy Money: The Science of Smarter Spending. He has also given a famous Ted Talk on money and happiness that has been watched more than 5 million times (links below).
New Year's resolutions
Investing in time
The Ikea effect
Can money buy happiness?
For those who are interested to know more about the behavioural economics course I completed, you can find more about it here.
Stay tuned for the next episode of The Richards Report, when I’ll speak with Six Park CEO Pat Garrett to review 2018. This will be coming out in the next few days. Click here to subscribe on iTunes or Spotify.
Hope that you've had a great Christmas, and have a safe and happy new year.
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