The 5 mental traps secretly ruining your wealth
Hey Future Millionaire,
Let me introduce you to your financial nemesis: your own psychology.
You think you're making rational money decisions.
But what's really happening? Your brain makes snapshot decisions, mostly on autopilot.
Let's talk about 5 sneaky biases that quietly mess with your wealth:
1. Recency Bias
"The market crashed last week. Better pull out before it gets worse."
We overreact to whatever just happened. It's like judging weather on yesterday's rainstorm and packing an umbrella... forever.
I teach investing and I'm a qualified financial adviser. This one still gets me. When markets jump 20%, I feel great.
But when Trump's tariffs hit my net worth, I wonder if this time is different.
It isn't.
→ Fix: Zoom out. Look at decades, not days. A bad week doesn't erase 30 years of market growth.
2. Overconfidence Bias
"I crushed it picking that stock! I'm a natural."
We take full credit for wins but blame others for losses. Then we make bigger bets we don't understand.
I saw this in early 2020 when investors bragged about their stock picking genius when they bought Etsy, Zoom and Docusign.
Funny how none mentioned their losses that followed.
→ Fix: Be humble. Follow a plan, not your ego. Consistent beats clever.
3. Confirmation Bias
"See? This Reddit post agrees with me. I knew Bitcoin was the answer."
We only seek info that proves we're right and ignore the rest.
We're all guilty. You want to hear you're doing things right, so you grab sources that back your beliefs.
→ Fix: Challenge yourself. Ask: "What would change my mind?" "What would need to be true for me to be wrong?"
Great investors question themselves.
4. Hindsight Bias
"Obviously the market was going to crash in 2022. I knew it all along."
No, you didn't. None of us did. Our brains rewrite history to make us feel smarter.
Economic downturns come from unpredictable events. Yes, a recession is coming... but watch out for anyone who claims to know when. They're either foolish or lying.
→ Fix: Accept uncertainty. Don't try to predict the future. Prepare for it.
5. Trend Chasing
"Everyone's buying tech stocks. I should too, right?"
When something goes up, we think it'll keep going up. FOMO kicks in hard.
I see this all the time now. People ditch boring, effective passive investing for "exciting" stuff like crypto, Nvidia, or specific industries.
When you try to pick winners, you're no longer a passive investor. You're trying to beat the market.
→ Fix: Ignore the hype. Invest in what works long-term, not what's hot this week.
Which bias hits you hardest? Is there one that is most prevalent for you?
Here's the good news: You're not broken. You're human.
These biases live in all of us, even the pros. The key is to stop letting them drive.
That's exactly what we fix in Money Mastery Coaching.
We zoom out.
We build a system.
We use data, not drama.
And I help you make smart, calm decisions with your money... instead of emotional ones.
So if you're ready to:
Feel confident about your money decisions
Get out of your head
Build wealth with less stress
Book your free strategy call here.
Let's outsmart your biases and build the freedom you've been working for.
Here is what SE Manager Riccardo had to say about it:
I'm writing this from my reflection retreat in Connemara. It's been amazing and I'm going for one more dip in the sea before driving back to Dublin this afternoon.
Have an amazing weekend.
— Sjoerd
Financial Freedom Coach | Ex-Sales Director | Still Human Like You
P.S.
I recorded a quick video on why I'm here.
Check it out below.
