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The Behavior Gap

3.72  ·  Rating details ·  1,389 ratings  ·  193 reviews

"It's not that we're dumb. We're wired to avoid pain and pursue pleasure and security. It feels right to sell when everyone around us is scared and buy when everyone feels great. It may feel right-but it's not rational."
-From The Behavior Gap

Why do we lose money? It's easy to blame the economy or the financial markets-but the real trouble lies in the decisions we make.

...more
Kindle Edition, 195 pages
Published January 3rd 2012 by Portfolio
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Average rating 3.72  · 
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Chuck Rylant
Jul 31, 2012 rated it it was amazing  ·  review of another edition
I've been in the financial planning business for a quite some time and read just about everything in the industry, and The Behavior Gap is truly original thinking. Most of the books in the field are advice driven whereas this book is more about challenging your thinking about money. This forces you to think about challenging questions about how you deal with your finances.

This is a good book for both the consumer and the financial planner. I think a lot of financial advisors tend to get caught u
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Joshua Anderson
Jun 03, 2020 rated it really liked it  ·  review of another edition
This was a quick and easy read and the book addressed what it said it would in the title, our behavior toward money. Most of it dealt with buying stock and investing, which may or may not apply to you, but throughout the book he asks important questions about: your relationship to money, what your goals are, what you must ask yourself when making financial decisions, and more. Some of these questions may not be new or even earth-shattering but for someone who considers themself a novice in the a ...more
Dawn Lennon
Jan 02, 2014 rated it it was amazing  ·  review of another edition
Shelves: business
So often in sports, commentators will take note how an athlete is playing within him/herself. That's essentially the message I read in The Behavior Gap about dealing with (okay, for some even playing with) your money: Make decisions within yourself that fit your goals.

The book is refreshing in its straight-forward, conversational style; enlightening in its behavioral focus grounded in reality; and encouraging because of its "you-can-do-this" approach.

I've seen people get tied up in knots over mo
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Mehdi Hassan
Jun 06, 2017 rated it really liked it  ·  review of another edition
a short book on mass mentality about money. different perspective to preaching frugality and goal based investing. nothing absolutely unique except for some interesting anecdote. fun leisurely read.
Sipho
Apr 02, 2019 rated it really liked it  ·  review of another edition
3.5 stars

This book is about how and why people typically make bad investment decisions. A very interesting read, as it doesn't fit neatly into the behavioural economics or personal finance genres but straddles both. Carl Richards won't tell you what to do with your money (as most books of this ilk would) but rather attempts to change how the reader thinks about money.

All in all, its a good read but not a 'must read'.

Key Takeaways

1. We Don’t Beat the Market, the Market Beats Us
• Aim for a
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Catherine Gillespie
The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money is a personal finance book geared toward people with investments. At the moment we aren’t very heavily investing and we aren't skittish about investing in general, so I found myself saying “yeah, yeah, OK” a lot as I read. However, if you are nervous about the stock market, the book contains a lot of solid advice.

One helpful section offers advice on how to talk about money. Richards points out that often when we think we’re havin
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Casey Wheeler
As a matter of disclosure I received this book as part of the 12 Books group with the expectation that I would participate in the discussion on Goodreads and post a review on that site, Amazon and my blog.

I found author Carl Richards book to be an easy to read and insightful. The chapters are concise and do not drift in to overkill on any of the subjects he discusses. The premise for the book is about being smarter with your money, but I found that it also translates into making useful life deci
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Ahmed Awami
Mar 01, 2017 rated it really liked it
I wished the book was going to dig deeper into behavioral economics and why we behave the way we do. But it turned out to be a beginner's level mainstream book.
In chapter 4 he got philosophical and talked about how capitalistic societies evolved to pursue wealth and falsely equate wealth to happiness and success.

3-stars book, but chapter 4 was excellent and hence the 4 stars.
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Jp Young
Sep 04, 2018 rated it really liked it
Anecdotally (and to some degree, analytically) introduces the concept of a "behavior gap," which befalls all of us - frequently in our investments, we act on emotion rather than rationality, costing us incalculable amounts of money, time, anxiety, and freedom in the long run. Interesting graphics combined with a bit of wit and humor makes it extremely approachable, even for those without finance backgrounds. ...more
Veselin Nikolov
Jan 12, 2020 rated it it was amazing  ·  review of another edition
What's the role of money in your life?
This book does not contain the answers. But it sure contains a lot of erroneous perceptions about money, investing and the usual conversations around them. Included you will find several "vectors" of thinking about money, than can help you find the answer that is correct for you. So glad that I was able to read it.
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Alex Hayes
Feb 13, 2017 rated it did not like it  ·  review of another edition
Good advice but nothing real insightful.
Lucas Westby
Jun 13, 2018 rated it really liked it  ·  review of another edition
Carl is a master at packing a punch with simple concepts. This is a must read for those looking to gain a self awareness of self-destructive tendencies in financial decision making.
Pam
Jan 19, 2014 rated it really liked it  ·  review of another edition
Recommended to Pam by: 12 books group
Shelves: finance
I got a kick out of this book because Carl has it down pretty good. I believe I have made just about every mistake he spoke of in the Behavior Gap.

Got "Financial foundation" plans from more than one adviser, day traded in 2000+, bought high and sold low regularly, bought gold bouillon, bought a stock at a high and watched it go to zero, and the list goes on not only in financial matters, but life matters as well.

I read lots of finance books, Bogel, Bernstein, Malkiel, Buffet, the Gardners, cover
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Sean Liu
This book is about money, but it's really about human psychology when we are at our most primal state—that is, when we're thinking about money.

When it comes to money, people are notoriously bad. We do things we KNOW are illogical and silly just because our brains are wired to tell us to do them (i.e. becoming interested in stocks when they become expensive [because they become expensive] and then selling off when they become dirt cheap). The media knows this and everyone and their dog claims to
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Jeannette
A quick easy read about reducing your fears about money and trying to make realistic choices about your financial situation. It's a pretty slim book and there's not a lot of meat - just general common sense advice, and a lot of napkin doodles, but it's a good starting place. ...more
John Browning
Jul 31, 2019 rated it really liked it
Quick read full of simple truths we all need to be reminded of. As someone who works in this field I have seen that these simple truths are easier said than done. The benefits are tremendous if you can consistently apply the ideas held within these pages.
Janice
May 25, 2015 rated it it was ok  ·  review of another edition
Skimmed. The research data behind some of the choices and behaviors that we make regarding money was interesting. The general pointers were not really new information.
Jon
Dec 07, 2020 added it
I used to stop in at The Behavior Gap blog every so often, and enjoy his cocktail napkin graphs or Venn diagrams illustrating some tidbit of financial wisdom, so I was excited to see that author Carl Richards had written a book, which turns out for the most part to be a compilation of many of the subjects he wrote about on his blog. Richards is a certified financial planner and runs a capital management company in Utah, as well as writing and speaking about money, so he definitely knows his subj ...more
Kaustav Banerjee
Well,
With a lots of hope, I started reading this book but somehow, unfortunately my expectations got hurt. It turned out completely investment's book wheres I was seeking for something other stuff. Moreover Richards has exaggerated to explain a simple idea unnecessarily which doesn't make any sense in the book. Really confused whether it is supposed to be given the icon of a good book or not because there are lots of great are flagging you up if you are really interested in investing. Yes it ca
...more
Julie Bestry
Mar 19, 2017 rated it really liked it  ·  review of another edition
This isn't an exciting book -- and that's the point. Richards' main point to get across to readers is that there's no magic wand, there's no shortcut, there's no one perfect tip from a broker or CNBC or The Economist or your brother-in-law that's going to get you rich. And that's OK.

Instead, this slim volume is designed to tell those who don't, deep-down, already know the foregoing, and to remind the rest of us who do know, and he digs into a layman's (not a therapist's) approach to the psycholo
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Akshat Solanki
Aug 23, 2018 rated it liked it
Mind

Mind your behavior.

This is what this book wants to tell you, this is what the author wants to tell you.
Carl has written about human behavior when it comes to financial planning, investing, trading, shorting the stocks, going long and how it affects, how it benefits. He has written some useful and important things that we should mind whenever we're trading.
There are many things that you need to forego in the short term to achieve your long-term plan.
Carl, again and again, insists on investing
...more
Lara
May 27, 2018 rated it really liked it
Shelves: z-2018, finances
I listened to the audiobook through my library and found the book interesting. Not having read much of a description, it wasn't quite what I expected, but the author made some good points about people's behavior around their finances. He also makes some really good points about the lack of value of paying close attention to the stock market (for most of us) and how so many act based on emotion and what others are doing rather than using their goals to guide their decisions. While I know that we ...more
Kara
Feb 26, 2018 rated it liked it
Shelves: nonfiction, money
3.5 stars. This short book (>200 pages) is a very fast read, and speeds along even more quickly due to the high number of illustrations/napkin diagrams. Richards focuses mostly on investing as opposed to other aspects of personal finance such as such saving money or paying off debt. I wish he had gone deeper into the research; as it stands now, the book stays pretty surface level and reads like a collection of conversation advice from your neighbor (granted, a neighbor who has spent decades in t ...more
Rob Price
May 21, 2017 rated it it was ok
Useful for non investors, novices or those who haven't paid much attention to the importance of behaviourial finance. I think about these things a lot but nevertheless it's always good to be reminded of numerous investing pitfalls. Richards places a lot of emphasis on understanding each individuals personal conditions and the investment journey that's relevant for them. It's a critical point that every individual probably needs to grapple with (both advanced, novice and all investors in between) ...more
Greg Weaver
Dec 16, 2017 rated it it was amazing
Oftentimes the simplest advice is the most effective if taken to mind and put into practice. But, of course, it takes coming across the advice in the first place for one to even have the ability to take the first steps in making mental shifts that adhere to that advice.

'The Behavior Gap' is a sage. The simple (yet not necessarily easy) lessons therein will seem elementary to some, yet most - if people are mindfully open to Mr. Richards's words - will notice the door to sound financial behaviors
...more
Chris Boutté
Nov 22, 2020 rated it it was amazing  ·  review of another edition
I've always been terrible with money. I have two parents who are terrible with money, and I picked up their terrible habits. Finally, in my 30s, I started getting smarter with my money, but I'm still a novice. Although this book by Carl Richards is mainly about being a smarter investor, and I have no interest in trying to seriously invest any time soon, this was a great book. I've only recently started dabbling in apps like Acorns to invest my loose change, and the thought of doing the real inve ...more
Glenn
Jan 10, 2019 rated it it was ok  ·  review of another edition
TLDR - A financial planner trying to explain human behaviour regarding money.

The irony - Carl writes about avoiding advice from unsubstantiated sources e.g. the brother in law who has a hot stock tip, and yet if you want to know about human behaviour, you should really source that information from psychologist rather than certified financial planner. (Alternatively, try reading 'You are not so smart' by David McRaney, who, although not a psychologist, actually compiles and lists a bibliography
...more
Emily
Jun 20, 2017 rated it liked it
An interesting read. I was looking for a book more geared towards buying and spending habits rather than stock investments. The last few chapters hit on some of this, but it felt like a winding road to get there. I wish he would have given better real life examples -- most seemed only half thought out. This book is memorable though -- his biggest advice is not to trust "experts" completely, as they often have different motivations than you. He is an expert, so by the end, he's telling you not to ...more
Maggie
Jan 20, 2019 rated it it was amazing
Shelves: finance
Read it in a single day. It was that compelling. Carl Richards is a straight shooter without the lazy crutch of excessive harshness. He's realistic and holds his reader accountable in a way that feels actionable. There are few things I dislike more than being coddled when receiving meaningful guidance. Richards does nothing of the sort. He talks to the reader like they are an adult capable of making adult decisions, managing their own behavior, and recognizing the role they play in their own fut ...more
Srividya
Aug 08, 2019 rated it really liked it  ·  review of another edition
Shelves: non-fiction
I finished this book over a weekend. I am a reasonably fast reader. However, it takes time to read non-fiction surely. So, by that standards, this book is much easier to read and is written with ease. Carl Richards has simplified some of the things about investing and personal finance and has cleverly applied it to most things we know (or not) about life.

I find the concepts simple, refreshing as reminders and are a great way to actually take that to think about choices and decisions about goals
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12 Books - Author...: The Behavior Gap - Official January Discussion 41 50 Jan 29, 2014 01:49PM  

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Carl Richards is a CERTIFIED FINANCIAL PLANNER™ and the director of investor education for the BAM ALLIANCE, a community of over 130 independent wealth management firms throughout the United States. He is the creator of the weekly Sketch Guy column in the The New York Times, and is a columnist for Morningstar Advisor. Carl has also been featured on Marketplace Money, The Leonard Lopate Show, Oprah ...more

News & Interviews

  If you listen to NPR regularly, you’ve likely heard the voice of Shankar Vedantam, the longtime science correspondent and host of the radio...
10 likes · 2 comments
“But in the end, financial decisions aren’t about getting rich. They’re about getting what you want—getting happy.” 5 likes
“whatever you have to do to gain self-knowledge, do it. Find out who you are and what you want. Then you can stop wasting your life energy and your money on stuff that doesn’t matter to you—and start making financial decisions that will get you to your true goals.” 1 likes
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