The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money

“It’s not that we’re dumb. We’re wired to avoid pain and pursue pleasure and security. It feels right to sell when everyone around us is scared and buy when everyone feels great. It may feel right—but it’s not rational.” —From The Behavior Gap

As a financial planner, Carl Richards grew frustrated watching people he cared about make the same mistakes over and over with their money. They were letting emotion get in the way of making smart financial decisions. He named this phenomenon—the distance between what we should do and what we actually do— “the behavior gap.” Using simple drawings to explain the gap, he found that once people understood it, they started doing much better.Richards’ work now attracts thousands at BehaviorGap.com and at the Bucks Blog at The New York Times. Now in his first book he’ll help you to:

  • avoid the tendency to buy high and sell low;
  • avoid the pitfalls of generic financial advice;
  • invest all of your assets—time and energy as well as savings—more wisely;
  • quit spending money and time on things that don’t matter;
  • identify your real financial goals;
  • start meaningful conversations about money;
  • simplify your financial life;
  • stop losing money!

“We’ve all made mistakes, but now it’s time to give yourself permission to review those mistakes, identify your personal behavior gaps, and make a plan to avoid them in the future. The goal isn’t to make the ‘perfect’ decision about money every time, but to do the best we can and move forward. . . . Most of the time that’s enough.” —From The Behavior Gap.


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About the Author

Carl Richards is a certified financial planner and founder of Prasada Capital Management, a portfolio design firm. He contributes to the Bucks blog at The New York Times and is a columnist for Morningstar Advisor. Carl appears regularly on National Public Radio’s Marketplace Money, and is a frequent keynote speaker at financial planning conferences and visual learning events. You can find more of his writing at behaviorgap.com. He lives in Park City, Utah, with his family.