Franchise City's video: The Dunning Kruger Effect can Make You Rich Or Poor

The vast majority, if not all bad investing decisions in real estate, stocks, metals, bitcoin, can be tied back to what is known as the Dunning Kruger effect, and cognitive bias. Identifying these flaws will make you wealthier. Why do people make bad decisions? Why do most of the public rush in right before a crash happens? Why do people lose all their money in the 2008 real estate crash, only to do the same thing again? Our minds our very faulty mechanisms that will more often then not lead us to bad decisions. So what is the Dunning Kruger effect? Discovered by Dr. David Dunning and Dr. Justin Kruger in 1999, it is the phenomenon where people who know the least about a topic, believe that they know the most. In studies people who are the least competent at something will actually rate themselves as very high-performing when they in fact lack particular knowledge or expertise. For example - people who read one article on the keto diet are now nutritional experts and will argue against a nutritional scientist with 30 years of experience. A person sees one TV show on capitalism and becomes qualified to dictate (with arrogance) how our world should be run. Someone reads one article that immunization is bad, and is now qualified to argue against professional immunologists. Once we have manifested the Dunning Kruger effect, we run with it, never seeking, in fact vehemently avoiding, any information counter to our new beliefs. Once we manifest what we think is truth, we no longer seek counter arguments, we seek only to reinforce those existing beliefs. This is a destructive human mental flaw that goes well beyond the investing world. Take Bitcoin, Someone can read a couple of articles on why Bitcoin will reach one million dollars. Now they could alternatively also try and read articles on why it could go to zero, but I don't because I am now a genius, and I have cracked the code to why Bitcoin will make me a millionaire. I go online and confidently tell everyone how Bitcoin can't fail, everyone should invest in Bitcoin, and I never, ever explore the other side of the story. Why? Another interesting but dangerous human mental flaw, is that those who know least about topics, typically have very fragile egos. If we feel our own beliefs may be come under scrutiny, we double down on our original assumptions. We angrily fight against anything counter to our beliefs. You can see examples of it all over social media. Rather than questions our beliefs, it feels better to argue and double down on our existing beliefs. That behavior can make you poor. You see this in real estate, stocks, silver investing and all platforms. People who have the least amount of knowledge are the most likely to be highly vocal as to why you are stupid for not following their expertise. Do something today that will make you a much richer person. If you are all-in on silver, Google "why silver could be a bad investment". If you are heavily leveraged in real estate, dont read articles reinforcing why real estate is great, instead read data on why the bubble might pop. If you hate bitcoin, read articles on the technology behind Bitcoin, blockchain, and what it really is. Read both sides of the argument, with an open, unemotional mind, if you feel yourself manifesting an emotional response, tame the mind! Emotional investing is using the wrong side of your brain. Most importantly realize this, even financial experts with 30 years of experience do not know with certainty what will happen with a single investing scenario. You don't either. I certainly don't. Understand both sides of the story, not just one, and then, humbly, make your best assessment of the situation, diversify knowing you might be wrong, with any of these. Also bear in mind we are individually genetically hardwired to follow specific behaviors. If your ancestors jumped on the backs of woolly mammoths to bring food home for the tribe, you are more likely to be all-in on the stock market, or other investments. Your genetic makeup is that of taking risk. And if your ancestors hid in a cave, which is also a viable survival proclivity, you are likely to be someone who is a perma-bear, and highly risk avoidant. Also not an ideal investing strategy. The vast majority of investors allow Dunning Kruger effect, cognitive bias, genetic influences to make them essentially a puppet, often to their detriment. Don't think so? Then why are most people not successful? There is one single reason that is their decisions, directly influenced by the hardwired biases of their mind. This is a fascinating topic which we will be covering in great detail on the new Madellian channel over the coming months MADELLIAN: https://www.youtube.com/channel/UCMlfXbdlKmfP8jNK4i8i9Ug “The wise know their weakness too well to assume infallibility; and he who knows most, knows best how little he knows.” Thanks for watching https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect