Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

In this TED lecture, behavioral economist Shlomo Benartzi applies his expertise to explain barriers to saving and to craft a solution. His Save More Tomorrow program has proved so effective that about 60% of big companies have adopted similar savings plans, and it’s now part of the Pension Protection Act. getAbstract recommends that investors watch this video to gain smart financial advice.

Summary

People don’t always manage their finances logically. Many Americans buy larger homes than they can afford but blame the banks when they can’t make the payments. Investors love taking risks in the stock market when it’s climbing but aren’t emotionally prepared for losses. Adults tend to buy extended warranties for their iPhones but lack adequate life insurance. The average American household spends $1,000 annually on lottery tickets. Behavioral finance combines psychology and economics to explain why people make financial mistakes and to offer solutions. For example, patterns emerge in how Americans save money. Half do not have...

About the Speaker

Shlomo Benartzi is a behavioral economist and a professor at the UCLA Anderson School of Management.


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