“You and me, baby, ain’t nothing but mammals…”

The human brain is a remarkable thing. We have evolved all manner of traits which set us apart from the rest of the animal kingdom: language, art, empathy, technology, philosophy, law, religion, music, virtue, war, entertainment, history, cookery, medicine, welfare, mathematics. It’s almost enough to fool us into thinking that we’re fundamentally different, made of something better than the organic mush the rest of nature is composed of. We certainly think of ourselves as logical, rational, objective thinking machines rather than primitive, animalistic beasts.

However there is one area where it is apparent to me that we are not half as clever as we think we are; another specific uniquely human characteristic: money.

We think that we make decisions, not just about money, but about life in general, based on the facts. We get a good understanding of the options, weigh up the pros and cons, and make sensible decisions. That’s what we tell ourselves, but it couldn’t be further from the truth. The reality is that we are far more short-sighted and reactionary than that. Ultimately, our decisions are entirely emotional rather than rational.

We struggle with the abstract, arbitrary nature of money. It’s not tangible. It’s counter-intuitive. We have no instinctive grasp of the workings of our financial lives. We’re also very bad at planning. Anything which involves delayed gratification produces a natural reluctance. We want it all, and we want it now. Not to mention the tide of emotions evoked by our relationship with money. Fear, insecurity, desire, self-esteem, vanity, aspiration, guilt, mistrust, excitement, laziness, regret, determination. These are our drivers, not the cold, hard facts and figures.

Hence our planning, decision-making and thinking are flawed and result in irrational and self-defeating behaviour, and this dictates our fortunes.