This week we get a bit theoretical about the economy and the psychology of human decision-making, but don’t worry, we’re pretty sure it makes sense, and there’s no need to lie down on a couch, unless you just want to stretch out in comfort while listening to the podcast. We discuss some of the ways the economy acts that we don’t often talk about, and the way people interact with the economy in ways we don’t often think about. The hope is to reframe investing as one of many ways we interact with the economy by looking to the future.
Meanwhile, Matthias has a vacation hack of sorts, and I’m back on Wrexham, but I really have a point this time, I promise.
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Some Thoughts
Taking controlled risks is a part of life; you’re already well-versed in it, so no need to panic when it comes to taking a controlled risk through investment.
Everyday life (and the economy) runs on agreements between people to perform and act certain ways, though the perceived and real risk of entering into any agreement may vary—this is not so different from investing.
Even with analysis and data, sentiment is still involved in any decision about the future, whether that sentiment is fear, caution, confidence, or anything in between.
Investing and buying a car are equally calculated gambles based on an assessment of past performance, others’ votes of confidence, mitigating downside risks, and confidence in the economy.
Perception of control may influence economic decisions more than we realize.
Any use of credit is an expression of confidence in the economy.
Topic and Time Breakdown
13:58 - Exploring the Currency of Confidence in Investments
20:50 - Consumer Confidence and Economic Decisions
24:18 - The Impact of COVID on Consumer Behavior
25:22 - Supporting Local Economies During Crisis
26:58 - The Illusion of Control in Decision Making
28:20 - Building Confidence in Investments
33:17 - The Role of Agreements in Economic Transactions
36:36 - Understanding Everyday Risks and Agreements
41:18 - The Currency of Confidence in Real Estate Investing
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