The Behavior Gap
Carl Richards · 2012
The Behavior Gap (2012) is a book by Carl Richards on money & investing. The financial planner behind the New York Times' napkin sketches explains why we reliably buy high, sell low, and sabotage our own returns, and how closing the gap between smart plans and human behavior beats chasing markets.
The biggest threat to your money isn't the market or the fees, it's the person in the mirror, and this tiny book of Sharpie sketches teaches you to get out of your own way.
Two of the ideas you’ll keep
The Clif summary of The Behavior Gap pulls out 7 insights. Here are the first two.
- The **behavior gap** is the recurring shortfall between what an investment earns and what the investor actually earns. It is created not by bad products but by our own decisions to jump in and out at the worst possible moments.
- We are wired to **avoid pain and seek pleasure**, which in markets means buying when things feel safe (and are therefore expensive) and selling when things feel scary (and are therefore cheap), the exact opposite of the rule everyone claims to follow.
The other 5 — and the full 10-minute summary — are in the app.
What’s inside: 8 chapters
The whole summary runs about 10 minutes, read or listened to.
- The Gap Between the Investment and the Investor
- Wired to Buy High and Sell Low
- Confessions of a Financial Planner
- Make Fun of the Forecasters
- It's Not About the Numbers, It's About You
- You're Not as Above-Average as You Think
- Plans Are Worthless, but Planning Is Everything
- Don't Just Do Something, Sit There
Finish The Behavior Gap tonight.
Read or listen to the full summary in about 10 minutes, then keep the ideas with a minute of review a day. Start with the 2-minute quiz — no card required.
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