If a recording were made of the conversations had with clients, you might be surprised at how little is actually said about money and how greatly emotional the talks are.
I must not be alone for we have the field of Behavioral Economics growing.
Let’s take a look.
It’s Your Behavior
Five principles of behavioral economics:
“People are swayed by moral and value judgements. They often do what they believe is ‘right’ rather than what would gain them most profit.
People apply quite different judgements to situations where money isn’t involved. They distinguish between these market and social contexts. To a neoclassical economist, however, it makes no odds whether you give your best friend a book worth $20 for Christmas or a $20 bill.
People are irrational financial investors. They put more weight on recent events than far-off ones, and are not particularly good at calculating probabilities. Similarly, they don’t react well to losing cash. They are prone to hang on to investments since they have a strong sense of possession.
People often follow their habits rather than examining their behavior to see whether it is optimal. Old habits die hard.
People are an amalgam of experiences- theirs and other people’s. They often do things by observing others rather than because of their own individual judgement.”
So. . . the next time we meet, let’s strive to keep this in mind and acknowledge the emotions on the table without giving them a vote.
Until next week,
Susan R. Linkous