Can Hindsight Bias Be Inherited?
Hindsight bias--not yours, but your loved ones'--could be affecting how you make financial decisions.
I was recently engaged in a Twitter discussion about, of all things, cars. (I insert "of all things" because cars are on a long list of subjects I know very little about.) Ben Carlson, director of institutional asset management for Ritholtz Wealth Management opined that spending on an expensive vehicle, SUVs, in particular, was likely hobbling retirement savings for many households. (He amplified that point with a post on his blog.)
I wholeheartedly agreed with that sentiment, and commented that many people are likely motivated to overspend on cars based on hubris. Cars are such an outward show of "how you’re doing," that people naturally want to make a good impression.