Flying on Autopilot
We often hear financial experts say “put your finances on auto-pilot”, and there is plenty of data to back up this strategy.
By the Editorial Staff
Betterment Resource Center |
Published: September 17, 2012
But something about it feels intuitively wrong – when I’m making important decisions with my money, shouldn’t I continue making those decisions every step of the way? Well, unfortunately for us, humans make bad decisions based on emotion all the time…
Even the most sophisticated investors make poor decisions. Paul Graham, partner at VC firm Y Combinator, talks about counterintuitive knowledge in a recent article on his blog. While funding startups is very different to retail investing, the emotions involved are the same. Paul talks about making decisions you know to be right, and how to stick with them when irrational instincts kick in:
“To succeed in a domain that violates your intuitions, you need to be able to turn them off the way a pilot does when flying through clouds.”
Carl Richards touched on something similar last week – what we refer to here at Betterment as the “paradox of choice”. It’s important that we, as investors, are informed … but too much information can get in the way of being a good investor. Anxiety, rather than clarity, is often the result of an information overdose.
It’s good stuff so take a look:
Recommended Content
View All Resources
How to Prioritize Your Financial Goals
If you identify all your financial goals for investing, you’ll likely find you can’t fund them all at once. Get our expert view on how to start prioritizing them.
Redesigning How You Manage Your Finances at Betterment
Our new design represents a synthesis of a large body of customer feedback. We hope it meets your expectations.
How Does Betterment Calculate Investment Returns?
Understanding and using time-weighted and money-weighted returns within your Betterment dashboard.
Explore your first goal
Safety Net
This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.
Retirement
Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.
General Investing
If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.
Smart Saver
You could earn 20X more than a typical savings account with our low-risk investing account for your extra cash.
How would you like to get started?
Your first step toward a smarter investing future starts here.
Create a Betterment account
Go ahead and join the smart, modern way to invest.
See what we can do for you
Tell us a bit about yourself, and we'll show you the benefits of investing with us.
Get a free investing checkup
Help us get a sense of your investing approach and see how you could improve.
Transfer a 401(k) or an IRA
Move an existing retirement account into a Betterment IRA.
Download the mobile app
Enjoy the Betterment experience anywhere on the go.