A book on personal finance that I read several years ago had a sentence similar to the following one:
“All financial decisions are emotional.”
My first reaction was that there was an editing mistake in the book. Certainly, they left out the word “not,” I thought. They meant to say that “not all financial decisions are emotional.”
However, as I read on, I realized that this was no editing mistake. The author was saying that every single decision regarding finances is an emotional one.
Could this be true? How about when I use logic to make a decision? The answer is that I have an emotional reason for wanting to use logic. So, the desire to be logical is, as strange as it may sound, an emotional one.
For me, this is an important point to grasp. It’s not that emotions are the enemy. After all, if they are behind every financial decision, they are behind the good decisions as well as the poor ones. One takeaway, then, is to find ways so that emotions lead to more rewarding results than poor results. More on this next week….