Pay no mind to the sharks

By Hilary VizelA man sits on the beach reading Jaws scared to go into the water.

Shark attacks are plenty rare. Yet many people avoid the water anytime a news report mentions a sighting at a very distant beach. Similarly, longtime smokers — who face a more sure threat than sharks — may feel a sense of calm when they witness an elderly person enjoying a cigarette. These are instances of Availability Bias. We have a tendency to overestimate the likelihood of an outcome based on the most easily-recalled information. That might be something we heard very recently or something that’s simply been repeated so often it just feels true. Consider how you would feel about investing some of your money in the stock market in a week when the news has reported multiple market declines. You would feel pretty apprehensive, despite the fact that it can be a great time to buy. Simply put, our fears and rationalizations are sometimes, well, irrational.

Use this knowledge Learn more about what scares you! Do some proper research, and you may just find yourself enjoying a wonderful day at the beach  —  with no sharks, and plenty of sunblock — or buying a house when the rest of the market is selling.

Make saving as easy as spending

Set a goal and make it happen.