I recently helped my mother purchase a 2015 SUV from a dealership. It was not a pleasant experience. Those of you that have purchased from a dealership know how long the process takes. Within 20 minutes of walking into the dealership, we were ready to pay all cash for the vehicle. We had done our research in advance, the test drive went well, and we were buying a reliable make and model.
Most of us have said or thought something like: “If only I had invested in __________, I would have so much money today.” Whether it’s the stock of Amazon, Google, Netflix, or Apple, the growth of these stocks over a long period of time is incredible. But when we examine the historical price movement of these stocks, we see that early investors have endured a bumpy ride.
Meir Statman is a Professor of Finance at Santa Clara University. He has gained increasing acclaim in the financial world for his work in the field of Behavioral Finance. What is behavioral finance? It studies the intersection of our behaviors (which are driven by our thoughts and feelings) and our money.
What does “normal” look like in today’s culture?
More specifically, what does normal look like in the area of personal finance and the decisions that surround this area of our lives?
For most people they think of “normal” as a new car every few years, a bigger house every so often, various exotic vacations, and many more “things” or “experiences” to live a fulfilling lifestyle. One thing that has become a foundational component of today’s “normal” culture is the idea of instant gratification…whether the finances are there to back up the gratification or not.