The Optimism Trap: How We Misjudge Risk and Rewards
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend Reading
A major – albeit common – psychological quirk in human nature is the tendency to focus on potential gains while downplaying risks. This optimistic outlook drives progress, entrepreneurship, and innovation, but can also lead you to poor decision-making if left unchecked.
READ THE ARTICLEWhile it's exciting to imagine big wins, like lottery prizes or risky stock investments paying off, long-term financial security is built through slow, steady growth and prudent decisions. To remain focused on the long game, you must practice patience, self-awareness, and balance ambition with practical risk management.
Key takeaways: If your end goal is financial confidence, you will quickly find that long-term investment success isn’t for the thrill-seekers. It’s a mix of slow, steady compounding with thoughtful decision-making.