Are You Guilty of These Cognitive Biases?

Today’s show is a fun one. Bias is one of our favorite topics, and cognitive bias is fascinating, especially as it relates to money. Find out what these biases are and how to implement more rational thinking into your life.

Your Guide:

Cognitive biases are widely accepted as something that makes us human. But every day systematic errors in our thought process impact the way we live and work.

On this episode of Your Retirement Elevated podcast with Scott Dougan, we’ll explain what these biases are and what classifies as rational thinking. See if you can identify if some of these biases are affecting you.

They are broken into six categories – memory, social, learning, belief, money or politics.

Dunning-Kruger effect

The less you know, the more confident you are. The more you know, the less confident you are. Everyone has a family member who falls into this category. If you don’t know who this person is, it might be you.

Anchoring

We rely heavily on the first piece of information introduced when making decisions. A sale or price tag saying 50% off makes us think it might be a great deal.

Google effect

We tend to forget information that’s easily looked up in search engines. This is especially true for phone numbers. With cellphones, we don’t remember friends’ and family member’s numbers.

Article discussed today: https://www.visualcapitalist.com/50-cognitive-biases-in-the-modern-world/

To hear about more cognitive biases, listen to the entire show and use the timestamps below to find specific segments.

[1:38] Bias is a favorite topic

[3:50] – Dunning-Kruger effect

[6:19] Anchoring

[8:16] – Google effect

[12:55] – Zero-risk bias

[13:37] – Ikea effect

[16:21] – Blind spot bias

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

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ABOUT YOUR HOST...

Scott Dougan founded Elevated Retirement Group in 2003 in order to fill a niche he felt was not being addressed properly in the retirement planning environment – helping retirees and pre-retirees in the Kansas City metro area find answers to issues that may affect the quality of life during their retirement.

Scott is a Registered Financial Consultant (RFC) and holds a Series 65 Investment Adviser Representative license, which holds him to the fiduciary standard. He also holds insurance licenses in Kansas, Missouri and other states.

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