One of our main roles as financial advisors is to act as a behavioral coach for our clients. The primary function of a behavioral coach is to protect clients from making life-changing wealth destroying decisions. These can include decisions such as:
- Pulling all of one’s money out of the market near the market bottom
- Keeping all of one’s wealth in his employer’s stock rather than diversifying (before something happens to the company and one loses significant value in one’s stock and one’s job)
- Investing a significant amount of money into one deal that turns sour
- Forgoing insurance
However, beyond these life-changing wealth destroying decisions, there are also much more subtle parts of each of our behavior and psychology that can have a negative impact on our wealth. This week, the Wall Street Journal put out an interesting article describing 5 of these more subtle psychology pitfalls that we can fall into:
http://www.wsj.com/articles/the-hidden-reasons-people-spend-too-much-1446433200?alg=y
