You and I we tend to be optimistic about the future.
That is not a bad thing in general. However, this optimism might easily develop into “wishful thinking”.
Too much “wishful thinking” will be harmful to you and your money. You might be awful at managing your money when you have never been able to predict what the market will do next. Still, this doesn’t deter you from trying to predict what the market will do next.
I am not suggesting that you turn into a pessimist straight away. That would not be meaningful in a world where far more people wake up in the morning, trying to make the world a better place than wake up thinking we’re all doomed.
Rather we should avoid blind optimism and strive for flexible optimism – optimism with its eyes open, wide open. If you cultivate that kind of optimistic mindset, it will significantly increase your chances of health, wealth, and happiness along the way.
Some joker defined the difference between optimists and pessimists this way:
An optimist thinks that this is the best of all possible worlds. A pessimist fears that this so.
I see it somewhat differently. There is always a choice in life. And I chose the middle-ground, between both ends of the spectrum, and call it rationalist.
What is a rationalist? Let’s take a look at that famous glass everybody likes to talk about: 
The optimist says, “The glass is half full.”
The pessimist says, “The glass is half empty.”
The rationalist says, “The glass is twice as big as it needs to be.”
This makes it clear as glass, right?
And being a rational optimist who desires to grow his/her nest egg, you would want to know the name of the glassmaker. If there is this much interest in that glass, you would want to know who makes it, so that you can invest in that company.
Still a bit pessimistic about whether the future will be better than the past?
Then you might want to check out these books to learn more about the progress we have made and will continue to make while living in a world of abundance:
Matt Ridley – The Rational Optimist
Peter H. Diamandis – Abundance
Or if you prefer a more graphical view of progress, do have a peek at these 6 Charts that Show How the World is Improving
“An optimist laughs to forget, but a pessimist forgets to laugh.” — Tom Bodett, humorist
“Whether you’re an optimist or a pessimist may or may not affect the outcome. It’s just that the optimist has a better time in life.” — James Borg, author
“Choose the positive. You have a choice and are master of your attitude. Optimism is a faith that leads to success.” — Bruce Lee, legend
“The main benefit of optimism is resilience in the face of setbacks.” – Daniel Kahneman
The opposite of optimism bias is pessimism bias (or pessimistic bias), because the principles of the optimistic bias continue to be in effect in situations where individuals regard themselves as worse off than others.
Optimism bias influences decisions and forecasts in policy, planning, and management, e.g., the costs and completion times of planned decisions tend to be underestimated and the benefits overestimated due to optimism bias. The term planning fallacy for this effect was first proposed by Daniel Kahneman and Amos Tversky .