Chapter Outline

Irrationality in Financial Markets

Loss Aversion

  • Loss Aversion and Framing
  • Loss Aversion and the Sunk Cost Fallacy

Mental Accounting

Decision Paralysis

Getting Started on Your Own Financial Planning

  • Start Early
  • Diversify
  • Invest in Mutual Funds
  • Set Up a Payroll Deduction Plan
  • Pay Off Credit Card Debt