Did you spot the gorilla? Did you notice that the curtains changed colour? Did you see the person in the black t-shirt leave?
The phenomenon of missing out certain pieces of information is called as inattention blindness. Some information is filtered out by our brain because there is too much infrmation all around. But many a times, useful information or critical information is filtered out which can lead to problems. Sometimes obvious information is missed because the brain is trying too hard to find out information. Let us look at its effect on personal finance -
- There is so much news on the personal finance front bombarded on us that we may filter out useful information leading to inefficient decisions.
- People can be distracted by certain big economic events and miss out on other events which may impact personal finances.
- There is a lot of news on the stock market and people react wrongly to volatile markets. They do not process the information that matters. It is important to understand and perceive the events affecting the stocks that you have and the fundamentals affecting those stocks.
It is important to perceive things that we read, see and hear properly so that we do not make mistakes. In case of personal finance, we should analyse the information that we get appropriately so that our financial plan does not get derailed. We can take the help of financial advisors too who can guide us in an unbiased manner to reach our financial goals.