Finance
Emotions, Ego, & Envy: Avoid Financial Failures With “Clear Thinking”
One of the best books of 2023—and one sure to land on my list of Advisor Resources for Financial LIFE Planning—was published near the year’s end. I’ve been following Shane Parrish’s work for years as the creator and curator of the Farnam Street blog and newsletter, so his new book, Clear Thinking, was in the cue.
One of Parrish’s greatest gifts is simplifying the realm of behavioral science to the point that it becomes, uh, clear, and perhaps more importantly, actionable. So, while you can peruse through a nearly comprehensive list of the 188 cognitive biases to which we may fall prey, you could also just read Clear Thinking and examine the four defaults Parrish suggests are “the enemies of clear thinking.”
Clarify your thinking
In this post, I’ll review each of the four and suggest four companion lessons to apply in pursuit of better financial decision-making:
1) The Emotion Default: “We tend to respond to feelings rather than reasons and facts.”
While emotion is too often used as a pejorative synonym for foolishness in the realm of personal finance, it is undeniable that, as Parrish suggests, “Emotions can multiply all of your progress by zero.”
Indeed, emotions often lead to rash decisions because they are centered in our System 1, in Daniel Kahneman’s Thinking, Fast and Slow parlance. While our System 2 is the processor in our brain that is slower, deliberate, and seemingly more rational, our System 1 is our source of fast, autonomic, and yes, emotional thinking and reacting.
That’s why we can find ourselves doing and saying things when we’re emotionally charged as though there is no gap between our feelings and actions. And while it would be nice if we could choose which of our Systems to use in the face of financial decision making (System 2, please!), the fact is that 80% or more of our decisions are driven by System 1, by our emotions.
Lesson: Money is inherently emotional.
This is where the financial industry has served us so poorly. From investment managers to gurus and advisors, most of us are taught to insist that consumers, followers, and clients separate themselves from their emotions. The only problem is that it’s a biological impossibility. Money, in particular, is inherently emotional, so we need to deal with those emotions rather than suppress or ignore them.
Of course, retailers and social media companies are well aware of this conundrum and seek to capitalize on it daily. Therefore, the best we can do when we experience emotion is to sloooooow the process down. Acknowledge the emotion, process it, discuss, decide, and then in the best-case scenario, harness the power of your System 1 to harden your better-informed resolve. Emotion need not be the enemy, and it can be part of the solution.
2. The Ego Default: “We tend to react to anything that threatens our sense of self-worth or our position in a group hierarchy.”
Nothing threatens our sense of self-worth more than others’ perception of our net worth. Even those who’ve destroyed every relationship in life are still often viewed as successful simply because they are rich. And their riches may only be a matter of perception, especially when we consider that most visible signs of wealth are evidence that someone has parted with their money in pursuit of a depreciating asset.
Lesson: “Comparison is the thief of joy,” and the modern world is wired to create comparisons everywhere we turn.
In The Gap and the Gain, co-authored by Strategic Coach founder Dan Sullivan and Dr. Benjamin Hardy, the authors suggest that the world we live in is designed to perpetually convince us that we are “in the gap”—that we are conditioned to compute our circumstances based on what we lack and how far we are from our ideal state—rather than “in the gain,” acknowledging how far we’ve progressed from the starting point of our goal pursuit.
3. The Social Default: “We tend to conform to the norms of our larger social group.”
Have you ever been in an environment where you quickly realized that your opinions or worldview were in the minority? Have you ever lived in a neighborhood or been part of a group at work, school, church, your kids’ extracurricular activities, or online where the larger group’s apparently unanimous deviation from your belief or preference applied an enormous pressure that challenged your belief and shifted your preference?
Although I live in Charleston, South Carolina, I’m from Baltimore, and when I meet someone else from Charm City (that’s Baltimore, IYKYK), the first question they usually ask is, “Where did you go to school?” They don’t mean college. They want to know which of the uber-elite private schools I went to. They’re sizing me up. I can’t tell you how much I love telling them I was a public school kid :-), but the condescension is powerful, and I’d be lying if I said I’d never wished my answer could be, say, Gilman.
Similarly, a friend of mine from the U.K. was an elementary school teacher across the pond, and she told me that on the first day of class, all of the kids insisted on knowing “Which football team do you pull for?” By “football,” they meant soccer, and by soccer, my friend told me what the kids really wanted to know was if she was Catholic or “Proddy” because there was such a clear division depending on which jersey she might wear. (She told me she decided she would choose to respond by mentioning the worst team in the league, which threw the kids off track and resulted only in jeers for supporting such an abysmal football squad.)
The powerful force of groupthink is one of life’s most persuasive.
Lesson: Be cognizant of the influences of your social groups.
We are social beings and benefit so much from our social connections that the lesson here is hardly to be a hermit. The lesson is to be aware of our surroundings and our circles and question the apparent norms. The chances are extremely good that most of the parents on your kids’ lacrosse team have houses, cars, and take vacations with price tags with a standard deviation below 25%.
Some sub-groups, especially in personal finance, reach levels of pressure that are downright cult-ish. For example, if you follow Dave Ramsey, you’ll likely be looked at with evident disdain if you pull up to your Total Money Makeover class in “the ultimate driving machine.” You’ll similarly get an eye roll if you put less than 20% down on your house or have a mortgage with a term of more than 15 years. Meanwhile, you won’t even be able to get into a pickleball game at your country club if you’re not driving a luxury vehicle.
Just remember that personal finance is more personal than it is finance, and so, too, are the best financial decisions. There’s nothing morally right or wrong with driving or living in whatever you choose (that you can afford), having a mortgage or not, or sending your kids to private school or public. The question is, What’s right and wrong for you and your family?
4. The Inertia Default: “We’re habit forming and comfort seeking. We tend to resist change, and to prefer ideas, processes, and environments that are familiar.”
As we have learned from Charles Duhigg, James Clear, and others, humans are creatures of habit—whether we like it or not. Even the things we don’t think are habits usually are, so the inertia that Parrish refers to is often not even conscious. Therefore, one of the best ways to acknowledge our habits, for good and ill, is to pause long enough to ask, “Why am I doing this?”
The challenge is that it is exceedingly difficult to stop doing something habitual. Therefore, the best way to stop a bad habit is to replace it with a new one. Recognize the cue that leads to the behavior, then replace the behavior with something preferable.
Lesson: Become familiar with the habits and processes that are likely to lead to financial success.
There are no guarantees in life, and especially money. But there are foundational principles that will make you much more likely to be financially successful. Thankfully, we see several of those principles illuminated in the companion lessons to counter the previous three defaults:
Know thyself. Become aware of your emotions around money by slowing down the process between idea (or, more often, feeling) and action. Better yet, plumb the depths of your emotions to reveal what it is in life that is most important to you—not what is most important to those in your social circles. Then, with a better understanding of your values, motivations, needs, and wants, establish the habits that will facilitate the pursuit of those goals, all while appreciating how far you’ve come rather than fixating on the distance between you and the ideal.
DULUTH — The Duluth Homegrown Music Festival is seeking both new operational leadership and a solution to financial filing issues that caused the organization to lose its federal tax-exempt status, which it has not held since 2022.
The organization is currently operating as a taxable nonprofit, confirmed Don Ness, the former Duluth mayor who serves as president of Homegrown’s
board of directors.
Ness and the board are working to discern whether there might be any outstanding tax liabilities in the wake of an apparent filing lapse.
“It’s a serious matter that requires diligence to do things right, and to correct past oversight, and to make sure that we are in full compliance with all tax and regulatory requirements,” Ness said. “The board is 100% committed to that course of action.”
As the Duluth Monitor first reported, Homegrown had its federal tax-exempt status revoked in 2022 after failing to make required financial reports for three years. The Monitor also reported that Minnesota Attorney General Keith Ellison’s office has notified the organization it may be in violation of state law requiring the proper registration of soliciting charities.
Clint Austin / Duluth Media Group file photo
“All but one of us have been on for less than a year,” Ness said of the current board members. “We’ve been committed to saying, ‘hey, we need to improve the points of accountability.’”
The organization will also require new operational leadership. Co-directors Cory Jezierski and Dereck Murphy-Williams resigned earlier this month, after leading Homegrown through four successful festivals.
“My contract ended at the end of May, and I knew a few days later that I did not want to continue in that position,” Jezierski said. “Simply put, it was the best thing for my mental health. It’s a job that requires many, many hours and a lot of work, and it can be very stressful as well.”
Amy Arntson / Duluth Media Group file photo
Murphy-Williams did not respond to an interview request for this article, nor did preceding Homegrown director Melissa LaTour. According to LaTour’s
LinkedIn profile,
she was Homegrown director from 2016 to 2022.
Jason Beckman, a recent president who is no longer serving on the board, responded to a News Tribune email but did not provide an interview availability before this article went to press.
Ness does not believe the reporting lapses were due to any ill intent. He praised Jezierski and Murphy-Williams for their success managing festival operations. “They cared deeply about the festival,” he said. “It’s amazing to see that our community continues to support this really unique and special festival.”
“Those guys run a hell of a festival,” said Scott Lunt, festival founder and a current board member. “I think they needed help with bookkeeping.”
Clint Austin / Duluth Media Group file photo
By Jezierski’s account, issues with the festival’s tax status became apparent shortly after he became co-director. “We went to file taxes, they were rejected,” Jezierski said. “At that time we, of course, didn’t know why right away, but once we started pulling on that thread, we unraveled a whole lot of the problems that were going on.”
Jezierski said “it took a long time to try to get any sort of help” from the board, but said that by the time he and Murphy-Williams left the organization, “everything had been turned over to be reconciled” with a financial professional.
Ness, like Lunt, was deeply involved with Homegrown in its first decade but had not had an official role with the festival since then. After launching the festival in 1999 and running it on his own for several years, Lunt was “burnt out,” Ness remembered.
Derek Montgomery / Duluth Media Group file photo
After a transition period during which the festival was run in partnership with the Ripsaw newspaper, Homegrown established a nonprofit organization in 2006 with Ness as festival director. Ness subsequently stepped down when he was elected mayor in 2007.
By 2025, Ness was in his current position as executive director of the Ordean Foundation.
“I was approached by a couple of longtime music scenesters,” Ness recalled. “They said, ‘There are questions about (Homegrown’s) nonprofit status. There are questions about some governance issues. We’re concerned.’”
Ness agreed to join the board, and became president. The 2026 festival ran smoothly from an operational standpoint, but Ness found the financial reporting to be lacking.
Clint Austin / Duluth Media Group file photo
“The last board meeting that we had prior to the (co-directors’) resignations was intended to be an overview of the festival that was a month before,” Ness said. “I certainly felt very uncomfortable with how little financial information we were receiving.”
Lunt also joined the board in 2025, marking his first time serving in that capacity. He said the new board has been spending significant time addressing the accounting and reporting issues.
“Every year at Homegrown time I’m like, ‘I should get more involved,’ and then I don’t,” Lunt said. “Then this board thing came up, and it was kind of sold to me as, like, four meetings a year. I was like, ‘Oh, that’s perfect.’ And now we’re meeting weekly.”
Clint Austin / Duluth Media Group file photo
Although it’s unclear how the organization’s finances will look when the accounting and reporting issues have been fully addressed, along with any outstanding tax liabilities, both Ness and Lunt said they are confident the annual festival will continue without interruption.
“The organization will continue,” Ness said. “The festival will continue. Homegrown is in no danger in terms of its viability.” The financial documentation Ness initially received indicated budgeted revenues of about $140,000, against about $130,000 in expenses.
“Financially, I think we’re in a great spot. We have the money to hire the (financial) professionals, and we have (done so),” Lunt said. “We were hoping that we could get all this sorted out before it had to become more public.”
“We poured countless hours into this festival, and this is how it ends, with everyone talking about this,” Jezierski said. “It’s rough.”
“There’s a DIY ethos that is really at the core of Homegrown,” reflected Ness. “We’re throwing a music festival that isn’t waiting for some famous band from the East Coast to bless us with their presence. We are doing this on our own.”
Clint Austin / Duluth Media Group file photo
That DIY spirit also means “you’re kind of passing wisdom down from person to person, and sometimes that’s imperfect.” Ness continued. “The ways that we do things evolve over time, because it’s not a buttoned-down corporate sort of thing. That can create its own set of challenges.”
“It’s self-supporting,” said Lunt about the festival. “It’s widely volunteer-run. You do need to pay a couple people, obviously, to keep track of some things, but it’s going to be strong into the future. It’s gone through its bumps before.”
While most AI in financial services remains advisory, LUMIQ has built the layer that owns the decision — autonomous, auditable AI agents making regulated calls in production at leading banks, insurers, and capital markets firms. Today, LUMIQ serves clients across India, the United States, and Southeast Asia — leading institutions across insurance, banking, and capital markets.
NEW YORK and SINGAPORE, June 19, 2026 /PRNewswire/ — LUMIQ, an AI-native financial services company, today announced a strategic funding round to scale auto-decisioning for financial institutions across the United States and Southeast Asia. The round was led by Bajaj Finserv, one of India’s largest and most diversified financial services groups, with participation from existing investor Info Edge Ventures.
Right now, thousands of customers are waiting for a policy to be issued, a loan to be disbursed, a claim to be adjudicated, because somewhere an FSI employee is drowning in decisions, held back by the risk of getting it wrong. Today, when e-commerce delivers the same day, banks and insurers still decide in weeks. We built LiteCone to take that burden: AI decides the routine cases, completely and accountably, so humans spend their judgment on the one case that actually needs it. This round lets us bring that to every financial institution in the markets that matter most.
Shoaib Mohammad, Co-founder and CEO, LUMIQ
From AI that assists to AI that decides
For decades, financial institutions have bought technology that made their people faster — faster data, faster scoring, faster copilots. The decision still landed on a human. LUMIQ is changing that. Through its LiteCone platform, the company deploys AI agents that read the file, apply the institution’s own guidelines, and reach the decision end to end — escalating only the cases that genuinely require human judgment. The output is not a recommendation. It is a decision, with full reasoning attached, cross-referenced to policy, and defensible under audit.
The results in production speak clearly. At a leading life insurer, LUMIQ’s LEO agent decides 75–80% of underwriting cases with zero human touch, reduced policy issuance cost by roughly 25%, and compressed turnaround from days to under eight minutes — running 24×7 with complete auditability. Across its client base spanning insurance, banking, and capital markets in India, the US, and Southeast Asia, LUMIQ now processes millions of decisions annually.
LiteCone turns a real financial-services role into a working AI agent in weeks. Every agent we deploy is consistent, explainable, compliant, and auditable by design — not as an afterthought. This capital lets us go deeper on the platform and broader across roles. And through our cloud and AI lab partnerships, institutions will increasingly find LiteCone already embedded in the platforms they run today.
Vaibhav Dobriyal, Co-founder and Chief Product Officer, LUMIQ
Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
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