From Here to Financial Happiness

Day Twenty Two Hunting but Not Gathering

Each of us is a bundle of hardwired instincts – and yet often we're only dimly aware of what these instincts are. That, of course, is the nature of instincts: They're things we do without stopping to think.

Most of the time, our instincts are a huge help. They tell us to pull our hand away from the hot pan, before we get scorched, and help us to figure out who's the friendly stranger on the crowded street who will give us directions. These are the instincts that were honed by our hunter‐gatherer ancestors and which allowed them to survive and reproduce. Be impressed: Without them, none of us would be here today.

But while our nomadic instincts steer us mostly in the right direction, they can lead us astray in the modern financial world:

• We're inclined to consume whenever we can, and we quickly become dissatisfied with what we have. Eating whenever possible, and constantly striving for more, made sense for our ancestors. But today, these instincts can cause us not only to overeat but also to overspend and take on too much debt.
• We believe the key to success is working hard. It's an attribute that helped our ancestors survive and also helps us get ahead in today's work world. But our belief in hard work, coupled with our self‐confidence, can cause us to incur hefty investment costs and take too much risk, as we trade excessively, hunt for elusive stock market winners, and make big investment bets.
• We imitate others. That was how our ...