S4:E4 - Why do smart people make bad money decisions? Understanding the formula

In this episode of The Finance Geeks, Warren Shute and Paul Cleworth break down the formula behind why intelligent people often make poor financial decisions. They explore the key ingredients, including ego, overconfidence and hindsight bias, and how these can distort even the most rational thinking. The conversation looks at how behavioural factors like recency bias, anchoring and herd behaviour influence decisions, particularly in changing markets. They also examine the emotional side of investing, from regret and loss aversion to the constant urge to act, even when patience is often the better formula. Warren and Paul share practical insights to help investors and advisers recognise these patterns and make more disciplined decisions. By understanding what goes into the mix, it becomes easier to avoid costly mistakes and focus on better long-term outcomes. ========================== Chapters: 0:00 - Intro 7:13 - Why do smart people make bad money decisions? ========================== Follow us our our social media channels: Instagram: https://www.instagram.com/thefinancegeekspodcast/ X: https://twitter.com/TheFinanceGeeks YouTube: https://www.youtube.com/@thefinancegeeks ========================== This show is designed to be informational only and does not constitute investment or financial advice. Please contact a regulated financial adviser before taking any specific action. ==========================