Sunday, October 16, 2011

Book: Your Money & Your Brain



This is an interesting book about human psychology, with emphasis on decision making on money related matters. Below are some extracts, hopefully it can keep you thinking:

"Imagine that you could choose between winning $3000 for sure, on the one hand, or gamble with an 80% chance of winning $4000 and 20% chance of winning nothing. If you are like most people, you will pick the sure thing. Next, imagine that you can choose between losing $3000 for sure, or a gamble with 80% odds of losing $4000 and 20% odds of losing nothing. What would you do? In this case, people reject the sure thing and take the gamble 92% of the time."

"A test was done with Godiva chocolates, the people who had selected one piece of candy from a display of 6 were much happier with their choice than those who picked one out of an array of 30 different candies. The more choices they left on the table, the more they worried that the one they picked was not the best. Too much of a good thing creates "choice overload", releasing a swarm of potential regrets."

"A study of dozens of Olympic athletes showed that, on average, bronze medalists were happier than silver medalists. After all, the silver medalists just missed the gold, while those who won the bronze just missed earning no medal at all."

" Imagine 2 situations - In one, you buy the biggest house in a middle-class neighborhood, in the other, you buy the smallest house in a rich part of town. In both cases, you earn an upper-middle-class income and pay the same price for each house. Which Neighbourhood will you be happier in?"

The ending note on this Investment Book:---

"Doing and Being are better than Having
Having centers around purchases and possessions (quite often shortlived). Doing is about experiences and activities (ie. Gathering with friends, Traveling to new places). Being is about something larger than yourself: devoting a portion of your time and energy to an idea, a cause or a community. Having creates diminishing returns; the more accustomed you become to whatever you buy, the less happiness you get from it. The good news is that the money you spend on Doing and Being gives a much longer afterglow, as experiences burnish themselves in your memory and belonging brightens your self-esteem. In the end, living a rich life depends less on how much you own than on how much you do, what you stand for, and how fully you reach your own potential.

The best "value investment" of all is channeling your money into goals that will make your life more valuable: drawing out your innate gifts to make yourself matter to other people and to make the world around you a better place. Given the way the brain works, your happiness ultimately depends not on finding out how much you can buy but on learning how much you can be."

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2 comments:

Yingel said...

*like*

kianhong said...

Great book. Totally agree with - "Doing and Being are better than Having"