“If I had a million dollars…” is a refrain often spoken and contemplated. From song lyrics to day dreams, we spend time fantasizing about what we would do with such a large sum of money. For many, accumulating a million dollars seems unattainable, but in reality, it can be achieved. The keys are: utilizing a predetermined and dedicated savings/investment program, sticking with good financial management, and making smart choices.
Of the three items listed above, the piece that is often ignored is “making smart choices.” In fact, what we think are smart choices may be the exact opposite, they could be emotional reactions to something going on in our world at the time. This paper, part three of a series, uses the tenets of behavioral finance to examine how and why our actions often impede smart financial decision making.