When it comes to mathematical functions, the human brain can easily comprehend “Linear Function or Simple Interest”, but we are genetically unfit to comprehend “Exponential Function or Compound Interest” and its massive impact years down the road. When it comes to interest…
Social scientists have proven that—emotionally—a loss “weighs” at least twice that of a similar gain. That might be great for aspiring body-builders, but not so great for us regular Joes. It’s the actual gaining or losing and your feelings about it that…
Irrationally wanting things to stay the same, also called inertia. We do this in part because we want to avoid costs, even when they’re offset by a larger gain, a process psychologists call “Loss aversion”. You hold onto a mutual fund…