Investment Blunders of the Rich and Famous...and What You Can Learn from Them

Part 1. Self-Inflicted Common Problems

Much of the harm that occurs to an investor's wealth is self-inflicted. The ways people think about investing often leads them into mental traps and false beliefs. In most cases these problems cause minor setbacks that can be chalked up to a “lesson learned.” However, if the lessons aren't learned, then a major investment blunder can occur. It only takes one major blunder to severely affect your wealth and your retirement lifestyle.

Many of these problems come from the human decision-making process. Investors tend to let their emotions interfere with their good judgment. The way in which the brain functions also biases investor beliefs. Consider that employees frequently think that the stock of the company ...