Kill your investment biases with these five top books

Emotions, overconfidence, and bias: all three interfere with investments as they often lead to misjudgment. Awareness of inherent psychological traits can help in preventing financial pitfalls. Here are the top five titles that can help you rein in these tendencies on the road to wealth creation.

Extraordinary Popular Delusions And The Madness Of Crowds By Charles Mackay

Extraordinary Popular Delusions and the Madness of Crowds is an early study of crowd psychology by Scottish journalist Charles Mackay first published in 1841 under the title Memoirs of Extraordinary Popular Delusions. The book was published in three volumes: National Delusions, Peculiar Follies, and Philosophical Delusions. Mackay was an accomplished teller of stories, though he wrote in a journalistic and somewhat sensational style. 

The Psychology Of Money By Morgan Housel

Money and behaviour are closely linked. Investing, personal finance, and business decisions are math-based fields. Any decision claims Housel is not made on spreadsheets but at dinner tables or meeting rooms where personal histories, viewpoints, and pride collide. In The Psychology of Money, Housel shares 19 short stories to explore ways in which people think about money. It will teach you how to make better sense of life’s important financial decisions.  

Seeking Wisdom: From Darwin To Munger By Peter Bevelin

Wisdom results from life lessons. Seeking wisdom is the result of the wisdom which Bevelin has acquired over the years. Bevelin’s own mistakes combined with insights shared by Berkshire Hathaway Vice Chairman Charles Munger are combined in this book. Bevelin cites an encyclopedic range of thinkers from the first century BCE Roman poet Publius Terentius to Mark Twain, Albert Einstein, Richard Feynman, and others. Seeking Wisdom is for those who have a love for knowledge. Some essential questions the book poses are: Why do we behave as we do? What do we want out of life? What interferes with our goals?

Misbehaving: The Making Of Behavioral Economics By Richard H.Thaler

Human beings are prone to error and largely predictable. Nobel Laureate, Richard H. Thaler explores these aspects of investing in Misbehaving. Thaler’s premise in the book: any activity we engage in – we constantly succumb to biases of various kinds. In other words, we misbehave. Thaler combines human psychology with a practical understanding of incentives and market behaviour and teaches people about how to make smarter decisions. Thaler reveals how looking at everything from household finance to starting any business is driven by inherent psychological traits. When economics meets psychology, the implications for individuals, managers, and policy policymakers are profound and entertaining.

Dollars And Sense: How We Misthink Money And How To Spend Smarter By Dan Ariely

Emotions play a powerful role in shaping our financial behavior says Dan Ariely which often makes us our own worst enemies as we try to save, access value, and spend responsibly. In Dollars and Sense, bestselling author and behavioral economist Dan Ariely teams up with financial comedian and writer Jeff Kreisler to challenge many of our most basic assumptions about the precarious relationship between our brains and our money. In doing so, they undermine many of personal finance’s most sacred beliefs and explain how we can override some of our own instincts to make better financial choices.