Getting Emotional

By Jonathan Clements of Humble Dollar

WHEN A FAMILY opts to purchase a Mercedes rather than a Subaru, the rest of us might think they’re being extravagant. But you likely won’t find many people saying, “How stupid is that? They could’ve got around town for half the price.” We accept that a car isn’t a strictly utilitarian purchase.

But we aren’t nearly so forgiving when it comes to “suboptimal” investment and personal finance decisions. Today’s contention: We shouldn’t be too quick to deride the money choices made by others—and, at the same time, we should concede there’s an emotional element to many of our own financial decisions and we should stop pretending otherwise.

For instance, many folks prefer to invest in companies that…. read more