Category : Basic concepts

Core ideas about uncertainty, money as tool etc.

Consumer Confidence

  There was a nice illustration of some of the basics points that I keep making on the BBC last week.   One is the habit economists have of simplifying everything to the point that they can understand it, which … Continue reading

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Deferring Gratification

If you see a pair of shoes, a gadget or whatever your favourite “impulse buy” is, can you just ignore it? If you can, well done!   How about if it is on sale?  Can you convince yourself that it makes … Continue reading

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Mental Accounts

Another experiment I did at my workshop on 26th March was about something called mental accounts.   You might like to try it.  It’s one of the most looked at, least understood habits we have about money.  But if you understand it, you could save a lot … Continue reading

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Bigness bias

I did some experiments at my workshop on 26th March. One was about what is called “bigness bias”. Maybe you’d like to try it, it could help you save a lot of money.   Imagine that you go to a … Continue reading

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Index linked funds

  I was recently asked in a comment on the site whether using indexed funds would be a good investment strategy.  These are funds (unit trusts, mutual funds, etc.) that buy shares in companies that make up the market index.  That … Continue reading

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Reality and illusion

We think we know what “reality” is.  So people say that they “know” how to make decisions, they “know” what markets will do, they “know” what is true.  Often they base this on the fact that they are “logical” (which … Continue reading

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Just be rational

The common them of a lot of “experts” about money is that you should be logical, rational, unemotional.  You should rely entirely on your “thinking” and eliminate emotion.   The theory is that this will avoid “emotional errors” and lead to … Continue reading

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Financial planning basics

I’ve been asked about my “recipe” for successful financial planning.  I don’t have one – in the sense of “ten top tips” that work for everybody.  People, you, are unique and there isn’t a one size fits all solution.  Anybody … Continue reading

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Economise on economics

I saw Paul Lewis from MoneyBox (a generally good guy, with a good programme) on the BBC morning programme today.   He “couldn’t believe” that the Governor of the Bank of England said that he (the Governor) couldn’t control the economy.   I … Continue reading

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Changing markets

Everybody seems to accept that we’re in a period of change.  Nobody knows what the housing market will do, what the stock market will do, how the economy as a whole will react to “necessary cuts” – but everybody seems … Continue reading

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