The first cognitive bias we will see in behavioural finance is "Anchoring" or also called "Focussing". It refers to the common tendency to rely too much on the first information we hear whenever we make any decisions. Imagine you want to sell your … [Continue reading]
What makes humans irrational when it comes to money?
Economists for a long time believed (at least wanted to believe) that humans are rational when it comes to decision-making about money, markets and overall economy for that matter. These economists thought that, given two choices, a normal human will … [Continue reading]
Discounts on Magazine Subscriptions – How do they work?
When I said yesterday that I subscribe to lot of magazines, there was a thought that crossed my mind. How do these magazines make a profit after giving such deep discounts when you subscribe them? You must have seen them right? A copy which costs … [Continue reading]
Two things you should spend your money on
Read any personal finance site or expert's opinions, you are sure to see the following: you should save your money. reduce your expenses. make sure you spend less than you earn. Well, I agree that this is good advice, but only if people follow it. … [Continue reading]
Diversification – How to do it and how not to do it
Lot of people don't understand the need for diversification. If they did, they wouldn't go and buy houses or land spending tens of lakhs of Rupees, being in debt for 25-30 years paying EMI. I am not against getting your own home to live in, but there … [Continue reading]
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