The Psychology of Money
Two topics impact everyone, whether you are interested in them or not: health and money. The healthcare industry is a triumph of modern science, with rising life expectancy across the world. Scientific discoveries have replaced doctors’ old ideas about how the human body works, and virtually everyone is healthier because of it. The money industry—investing, personal finance, business planning—is another story. Finance has scooped up the smartest minds coming from top universities over the last two decades. Financial Engineering was the most popular major in Princeton’s School of Engineering a decade ago. Is there any evidence it has made us better investors? I have seen none. Through collective trial and error over the years we learned how to become better farmers, skilled plumbers, and advanced chemists. But has trial and error taught us to become better with our personal finances? Are we less likely to bury ourselves in debt?...