海角大神

Let鈥檚 say you鈥檙e worried that your finances aren鈥檛 being organized effectively. You鈥檙e not really sure what鈥檚 wrong, but you have a gut feeling about it. You decide to go to a financial advisor, who tells you that, indeed, your finances are in a bad place. He points out several perceived flaws and pledges that he can fix them.

Let鈥檚 say you鈥檙e leaning toward putting some of your money into an annuity. You do a few Google searches and, based on the results you find, it sure seems like buying an annuity is a really good idea.

Let鈥檚 say you鈥檝e seen repeated advertisements and product placements that convince you that a particular product is really cool. You go into a store, see it on a well-designed display, and find yourself really wanting this item you don鈥檛 need. You sigh, decide that you can probably afford it, and head to the checkout aisle.

In each of these situations,聽confirmation bias is working against you.聽It鈥檚 guiding you toward a conclusion that is quite possibly not in your economic best interest.聽

What is confirmation bias?聽聽is a tendency of people to favor information that confirms what they already believe.聽A person with conservative political leanings might believe in the accuracy of Fox News, for example, while a person with liberal political leanings might be an avid viewer of MSNBC. Both of these people will view their news source as unbiased and correct and view the other news source as farcical (I actually think they鈥檙e both farcical, but that鈥檚 a different subject entirely鈥�).

Confirmation bias can be incredibly expensive.聽It can lead you to poor investment choices. It can lead you to extremism in your personal beliefs (which can be very alienating). It can lead you to poor spending decisions.

狈补迟耻谤补濒濒测,听confirmation bias is something you鈥檙e going to want to overcome most of the time.聽Whenever you鈥檙e making an important decision about your money or about something else you鈥檙e going to invest heavily in (such as a political movement), you owe it to yourself to figure out if confirmation bias is pushing you into this decision.

For me,聽the most effective tool at overcoming confirmation bias is unbiased information, particularly multiple sources of it. I try to look for sources of information that have no vested interest in anything but the accuracy of the data.

For example, an investment firm will have a vested interest in making their investment products look particularly good, so they鈥檒l choose data points that will make their investments look great. I鈥檒l want to look for other sources of information on investments.

On the other hand, places like聽Consumer Reports聽have a vested interest only in reporting reliable information about products. They don鈥檛 have a vested interest in one product selling well and another product selling poorly.

Sources I tend to trust include non-politicized government agencies (meaning ones that are staffed by people whose jobs don鈥檛 depend on the current administration or the result of elections) and independently-funded review and comparison organizations (like聽Consumer Reports聽for consumer products or Morningstar for investment options).

(It鈥檚 important to note that聽many people who prey on confirmation bias want to undermine unbiased information.聽They鈥檒l attack the source of a piece of unbiased information rather than looking at what the information itself is saying. If you鈥檙e going to pay attention to such attacks, you聽must聽find out for yourself whether those attacks have any justification or not.)

Beyond that,聽I always value data that comes from many different sources.聽If I can鈥檛 find data that comes from an unbiased source, I try to find data from sources that would have聽different听产颈补蝉别蝉.

For example, when I鈥檓 making up my mind on a political story, I鈥檒l read an article on it from a fairly conservative source and then read an article on it from a fairly liberal source. The elements that the stories have in common are generally the ones that are reliable, while everything else is highly suspect.

The more important a decision is, the more sources of information I鈥檓 going to want.聽I most highly value unbiased sources of information, but I鈥檓 often forced to include some sources of biased information, so I do my best to balance them.

If the data tells me that my initial hunch was wrong, then I鈥檓 willing to say I鈥檓 wrong.聽This is absolutely vital.聽You must be able to walk away from the ideas you have if the data proves you wrong.聽If you cannot do that, then you will repeatedly fall prey to confirmation bias.

What鈥檚 the take-home message here?聽When you have an important decision,聽research it.聽Find unbiased sources of information. Find information with conflicting biases 鈥� one on one side and one on the other. Compare them all and see what idea really does come out on top, and then go with the one that鈥檚 actually backed up by data.

If you make major financial moves based on a hunch that was reinforced by a salesman or the first two results of your Google search, you鈥檙e going to find yourself on the losing end of the deal more often than not.聽Take your time and find many sources of real information before you make a move.