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Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich | 
 enlarge | Author: Jason Zweig
Publisher: Simon & Schuster
Category: Book
List Price: $15.00
Buy New: $3.30
You Save: $11.70 (78%)
New (37) Used (16) from $1.99
Rating:  33 reviews
Media: Paperback
Edition: Reprint
Pages: 352
Number Of Items: 1
Shipping Weight (lbs): 1
Dimensions (in): 9.1 x 6.1 x 0.9
ISBN: 0743276698
Dewey Decimal Number: 332
EAN: 9780743276696
Publication Date: September 16, 2008
Availability: Usually ships in 1-2 business days
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Product Description
What happens inside our brains when we think about money? Quite a lot, actually, and some of it isn't good for our financial health. In Your Money and Your Brain, Jason Zweig explains why smart people make stupid financial decisions -- and what they can do to avoid these mistakes. Zweig, a veteran financial journalist, draws on the latest research in neuroeconomics, a fascinating new discipline that combines psychology, neuroscience, and economics to better understand financial decision making. He shows why we often misunderstand risk and why we tend to be overconfident about our investment decisions. Your Money and Your Brain offers some radical new insights into investing and shows investors how to take control of the battlefield between reason and emotion.Your Money and Your Brain is as entertaining as it is enlightening. In the course of his research, Zweig visited leading neuroscience laboratories and subjected himself to numerous experiments. He blends anecdotes from these experiences with stories about investing mistakes, including confessions of stupidity from some highly successful people. Then he draws lessons and offers original practical steps that investors can take to make wiser decisions. Anyone who has ever looked back on a financial decision and said, "How could I have been so stupid?" will benefit from reading this book.
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Showing reviews 1-5 of 33
 Behavioral Finance June 8, 2010
Man of La Book (NJ USA)
This behavioral finance book came recommended to me and I'm glad it did.
The book, in a very non-technical language, touches on how the body reacts physically and mentally to the changing stock market. The author explains how the brain works when faced with pleasant events (stocks going up) and unpleasant events (stocks going down) and when faced with peer pressure or an important decision. After the explanation, the book tells you simple techniques to avoid or circumvent these issues as well as a great checklist to go through before gambling in the stock market.
I do have a "play account" and aside from my retirement account which I opened to learn about the stock market. This book has helped me focus on my actions instead of actions of others as well as make the stock market gambling a bit more interesting (using my play account only). Maybe in a year or so I'll be brave enough to stick a few more dollars, but meanwhile - a fake portfolio - here I come.
A Masterpiece of Risk & Investing Behavioral Science May 12, 2010
TW
1 out of 1 found this review helpful
Your Money & Your Brain is a study of behavioral science focused on the finer points of rational thinking. The object of the book is to get a better understanding of the overwhelmingly common poor choices that investors make, particularly those decisions based on emotions, knee jerk reactions, and a poor reliance on seemingly helpful yet strikingly destructive instincts.
Zweig demonstrates how humans have relied on our reflective systems as though our instincts were built for the problems we face today; however, the reality is that our instincts were built for survival purposes. Instincts have served us well for millions of years, yet the modern world renders survival intuition meaningless, and a reliance on these instincts for investment is not only irrational, but dangerous. Our tendency to search for patterns causes us to assume order where it doesn't exist, and as a result our instincts cause us to jump to unhelpful conclusions.
There may be a large difference in the knowledge base between the average investor and the manger of a multi-billion dollar hedge fund, but there is little to no difference in nature of irrational thinking. Zweig clearly illustrates why the playing field for poor thinking is level no matter what your status, and leaning to defend against hasty and imprudent decisions cannot be overstated. Put best in his own words, Zweig states, "Over the years, I've grown convinced that there are only three kinds of investors: those who think they are geniuses, those who think they are idiots, and those who aren't sure. As a general rule, the ones who aren't sure are the only ones who are right."
This book is fully enlightening and will leave you with an improved awareness of the proper rationale for making money. Zweig has an exceptional grasp of the human intellect as well as a strong ability to present the material coherently and effectively. The result is a masterpiece that any investor should read.
Investor, Know Thyself March 5, 2010
bronx book nerd (Bronx, NY USA)
1 out of 1 found this review helpful
This is a book that guides investors by introducing them to themsleves, or rather the way the brain functions and reacts when money is involved. Jason Zweig applies the latest research and findings in brain science to provide advice on how to invest by learning how our brains have been hardwired by evolution to behave in certain ways and to either use those ways to make better investing decisions or compensate by being aware of the tricks of our mind. For example, the brain looks for patterns where there are none. An investor may then determine that a stock is going to continue to rise because it has gone up the last three quarters. Maybe it will; maybe it won't. The investor who knows his or her brain will be aware of this brain tendency and will know to take other factors into account. Similarly, a brain-knowledgable investor will be aware of the confirmation bias that makes us look for informtation that confirms what we already believe and ignores that which goes against our current stance. Again, the investor who knows that his gray matter matters will be aware of this bias and will consciously consider factors that counter his current position. These are just two of many examples throughout the book, all of them illusrated with neuroscience experiments, that every investor should know to get the most from their investing efforts.
Getting the best out of thinking and feeling while investing September 28, 2009
Matthew Toland (Atlanta, Georgia)
1 out of 1 found this review helpful
Opinion
I thoroughly enjoyed reading this book. I am currently an undergraduate dual major student in business and biology who was looking for a book that could combine the science of the mind with the science of the business world. Jason Zweig's "Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich" was the perfect blend of psychology, neuroscience, and economics to show investors how to avoid basic money mistakes and gave me great insight into how much emotion affects the basis of our decision making. The title implies that the book can make people rich, but from my personal interpretation, the book was more geared towards avoiding many of the emotional decisions that have cost investors over time rather than actually creating wealth for them. The book is a gateway into how the brain reacts through a wide variety of emotion and provides many tests, puzzles, and interesting experiments to show how irrational the brain can actually be.
Structure of the Book
The book is divided into ten chapters each with their own specific message. The first chapter is an introductory chapter, the second chapter defines the difference between thinking and feeling, and the final eight chapters all involve emotions that can take their toll on an investor. These emotions include greed, prediction, confidence, risk, fear, surprise, regret, and happiness. Inside each chapter are subdivisions of personal stories, behavioral studies, and experimental data to show various aspects of each emotion and how it can affect investors.
Section Synopsis
The first chapter is an introductory chapter with the sole purpose of explaining the theory of neuroeconomics and the general situations where advancements in the field will potentially be beneficial for future investors. The first chapter provides investors with the basic lessons that have emerged from neuroeconomics with insights that include comparing the neural activity of someone making money equivalently to that of someone who is high on cocaine. The findings are laid out in this chapter and then supported case by case as the book progresses through the major emotions that define investor behavior.
The second chapter defines the difference between thinking and feeling and shows how brain functions can either be reflexive or reflective. This chapter is largely the heart and soul of the book as it defines the greatest interplay of interpretation that each investor makes when making decisions. For each emotion, Zweig shows examples of when the brain responds reflexively and other scenarios when the brain responds reflectively. Zweig tells investors that both types of brain function are important to investors, but understanding the benefits of recognizing which pathway is responsible in making a final decision can be as important as the decision itself. Basically, knowing why the brain is responding is as important as how the brain is responding.
The final eight chapters deal with emotions and teach the investor how these emotions lead to financial decision making. Zweig takes an in depth look into how the brain interprets these emotions and using experimental data and true stories of behavioral studies shows investors how these emotions factor into financial decisions and why people act the way they do.
Interesting Elements
The book is full of pictures, puzzles, tests, behavioral studies, and experimental data that allows the reader to tangibly understand the scientific findings that neuroeconomics are providing investors. The information in the book is largely current and very relevant. I found these puzzles and tests so interesting that I have already shown many of the examples to friends and family who have also shown interest in the findings. Zweig makes a point in the book and allows the reader to prove to themselves through these puzzles and tests that what he says is actually true about the way people think. The section on fear was the most informative to me and the most intriguing chapter of the entire book. In the middle of the book, Zweig has inserted real brain scans from his own brain from the different experiments that he has participated in. These pictures show how the emotions present themselves in the brain and provides physical evidence to Zweigs claims of how each of these emotions defines investor decisions.
Interesting Quotes
"Since both systems have their strengths and weaknesses, the challenge for you as an investor is to make your reflective and reflexive sides work better together, so that you can strike the right balance between thinking and feeling."
"A monetary loss or gain is not just a financial or psychological outcome, but a biological change that has profound physical effects on the brain and body."
Recommendation
I feel this book is a must read for anyone who intends on investing or making any financial decisions on their own as it is a perfect guide to becoming a more thoughtful and intelligent investor. I would also recommend this book to people who find emotions interesting, and how emotions such as greed, fear, happiness, and others help guide our brains into making decisions and the motivation for the way we respond behaviorally in different scenarios. The book contains a depth of science, however, in no way is the book overbearing because Zweig quite successfully gives the reader the tangible evidence to prove to themselves that investing mishaps are often triggered by our own misconceptions of how we are thinking and feeling. The book reads almost as a compilation of interrelated stories that are topic specific and illustrate a wide range of scenarios a typical investor would face, both good and bad. The experiments and puzzles in the book will inspire the reader to share the results with others and test friends and family with how little we actually know about how we think. The book is written in an interesting and informal style that makes it approachable to anyone, even those with a limited background in neuroscience.
Amazing explanation of why we do what we do with money August 15, 2009
Mariusz Skonieczny (ClassicValueInvestors . com)
I believe that investors are their own worst enemies because they are not equipped with an understanding of how to think about financial decisions. In this book, the author proves that investing generates powerful emotions that lead us to take certain actions that may not be in our best interest. He says that there is nothing in our lives that makes smart people feel as stupid as investing does. Being knowledgeable about this topic can help us make better investment decisions that will lead to more wealth. I don't believe that we can maximize our wealth until we learn how to control our minds.
What I like about this book is that the research provides the biological explanation of what goes on in our brains when we make financial decisions. It was interesting to learn that the brain of a person who thinks is about to make money is almost identical to that of a cocaine addict. This book really helped me understand myself, clients, and other investors better, and why we make decisions that we make. It was simply a fascinating read.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
Showing reviews 1-5 of 33
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