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.
Key Notes
- Former UK finance minister George Osborne is joining Coinbase’s Global Advisory Council.
- Osborne will focus on crypto regulation, stablecoins, and tokenized assets across the UK and EU.
- The exchange is also expanding beyond crypto trading as it steps into 2026.
Coinbase has appointed former UK finance minister George Osborne as chair of its Global Advisory Council. It is clear that the American crypto exchange wants to deepen its influence with governments outside the United States.
Earlier this week, Coinbase tested the waters in India as its deal to acquire a minority stake in local crypto trading platform CoinDCX was approved by the Competition Commission of India.
https://twitter.com/CCI_India/status/2000905244080034292
Coinbase Expands Policy Reach Beyond the US
Coinbase confirmed that Osborne will take a more active role in advising on government engagement worldwide, with a focus on Britain and the European Union.
Osborne, who first joined Coinbase as an adviser in January 2024, will be based in London. He will work closely with policymakers on issues related to crypto regulation, stablecoins, and tokenized assets.
Coinbase’s chief policy officer Faryar Shirzad said the crypto exchange has already become a powerful lobbying force outside the US. In the UK, the company is pushing for clearer rules on tax treatment, stablecoin payments, and the use of tokenized assets in capital markets.
Osborne’s Background
Osborne served as the UK’s finance minister from 2010 until 2016, stepping down after the Brexit referendum. Since leaving politics, he has built a broad private-sector portfolio.
He currently chairs the British Museum, is a partner at investment bank Robey Warshaw, and leads Lingotto Investment Management.
Just days before the Coinbase announcement, OpenAI named Osborne to support its overseas data centre expansion under its global infrastructure program. His appointment to Coinbase adds crypto and blockchain policy to an already wide-ranging list of responsibilities.
Expansion Across Crypto
According to an earlier report, at its recent System Update event, Coinbase revealed plans to expand into stock trading, prediction markets, custom stablecoins, tokenization platforms, and AI-powered investment advisers.
Coinbase has already launched stock trading and prediction markets on its platform and now rivals firms such as Robinhood and eToro. The exchange has also partnered with Kalshi to offer markets tied to real-world events such as sports, elections, and economic data.
The exchange’s long-term goal is to become an all-in-one financial platform that operates around the clock.
Meanwhile, Deutsche Bank recently initiated coverage with a buy rating, according to CNBC. Analysts expect the company’s broader new everything-in-one strategy to reduce its dependence on crypto trading volumes as it scales into 2026.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
Parth Dubey on LinkedIn
After difficulties this year, next year looks to be better for the equipment finance industry as government legislation and investment in data centers and AI provide opportunities for financiers.
The U.S. economy heads into 2026 resilient, with real gross domestic product growth of 1.8% and a 6.2% increase in equipment and software investment, according to the 2026 Equipment Leasing & Finance U.S. Economic Outlook, released today by the Equipment Leasing and Finance Foundation. Strong equipment demand, AI-driven capital spending and equity market strength should drive growth for the industry.
Rather than a typical temporary cyclical downturn, after 2025 the equipment industry faces a systemic change, Michael Sharov, a partner in consulting firm Oliver Wyman’s Transportation and Advanced Industrials practice, told Equipment Finance News. Evolving channels, customer fragmentation, labor shortages, and digital and supplier realignment will drive change and create opportunities for dealers, lenders and OEMs.
“Systemic change is going to happen, but the industries are not going to fall apart.” — Michael Sharov, transportation and advanced industrial partner, Oliver Wyman
The equipment industry can still prosper because they serve “essential use” industries such as food, infrastructure and materials, “so there is high confidence in recovery, as long as everyone does not hunker down, but uses this downturn,” he said.
Amid restructuring, lenders face battles around asset transparency, uptime and service capacity, changing underwriting factors, longer trade cycles and elevated importance of used equipment, even with the strong long-term outlook, Sharov said.
In industries such as transportation, mergers and acquisitions will allow stronger players to pick up clients as capacity shifts across the industry, Anthony Sasso, head of TD Equipment Finance and senior vice president at TD Bank, told EFN.
“There are more opportunities for companies to pick up good clients for those companies that are financially sound and well-heeled,” he said. “We’re seeing that today.”
Equipment finance industry set for growth
Meanwhile, the equipment finance industry appears set for growth in 2026 alongside the U.S. economy’s recovery following a year plagued by economic uncertainty, Cedric Chehab, chief economist at economic research firm BMI, said during a Dec. 11 webinar.
Factors supporting industry growth include fiscal stimulus and bonus depreciation because of the One, Big, Beautiful Bill Act, additional Federal Reserve rate cuts that are anticipated, resilient corporate profitability and earnings, and especially, continued investment in AI and data centers, which could affect the economy on multiple levels, Chehab said.
“When you combine the huge strengths of AI and the software around AI and the LLMs and how they interact with machines and robotics, they could boost productivity even further,” he said. “Many economies, and in particular the U.S. economy, are pursuing aggressive industrial policy, driving investment in cutting-edge technology, which will not only foster greater competition to a degree, but really accelerate the pace of development of these technologies.”
Deductions, depreciation under OBBBA
A full year under the One Big, Beautiful Bill Act, which was signed by President Donald Trump on July 4, should spur equipment investment, especially for the equipment sectors in need of recovery, according to a Nov. 19 Wells Fargo research note.
“By making bonus depreciation permanent, firms can fully expense capital equipment, machinery and qualifying real estate improvements,” according to the note. “This change, along with other tax incentives, reduced policy uncertainty and lower borrowing rates, should provide support to investment growth next year and keep the CapEx cycle rolling.”
While increased deductions, bonus depreciation and financing can improve liquidity to help pay for replacement assets, weak trucking and finance fundamentals mean the incentives alone may not be enough to drive new equipment purchases, TD’s Sasso said.
“That’s probably one of the areas that, if you see an uptick in that, it may promote more CapEx spending, and this not only applies to the trucking vertical, but it’s for a number of other verticals,” he said. “If you see more CapEx spend, then you’d see the financing go along with that, and that’s where those benefits would kick in.”
Data centers boost construction
Investment in data centers and technology is also expected to continue in 2026, according to the Wells Fargo note.
“The race to build out the next generation of AI capabilities with the latest information processing equipment, software and new data centers has led capital spending to charge ahead despite elevated policy uncertainty,” according to the note. “But this concentration in tech spending glosses over undeniable weakness in more traditional CapEx categories, such as transportation equipment and commercial construction.”
Data centers also require significant capital, with financing for U.S. data centers projected to reach $60 billion in 2025, according to a Dec. 11 release from the Equipment Leasing and Finance Foundation focused on data centers.
In the wider construction segment, sentiment toward growth remains cautious in some regions, with nearly half of construction firms in the Minneapolis Federal Reserve region feeling more pessimistic than they did in mid-2025, Erick Luna, director of regional outreach for the region, said during a Dec. 12 webinar.
“Some of the same challenges showed up in this change of outlook, a slowdown in projects, reduced RFPs, tariffs, etc.,” he said. “Almost half [of the firms] expected backlogs to keep contracting, and in turn, [fewer] projects will be completed and so on.”
Equipment industry faces more challenges
Meanwhile, executives rated the state of the industrials market a 5.7 out of 10, down from 8 last year, according to Oliver Wyman’s 2025 State of Industrial Goods North America, Non-Road report, released on Dec. 3. The report surveyed 105 equipment manufacturer executives in conjunction with the Association of Equipment Manufacturers.
Looking ahead, indicators such as farm receipts, construction activity, residential starts and large data center projects will be central to assessing demand across agriculture and construction, Nate Savona, a partner in Oliver Wyman’s Transportation and Advanced Industrials practice, told EFN.
“What we got from the members that we worked with who are living and breathing the industry is there is cautious optimism, but they’re not feeling great right now. The original sentiment for the [State of Industrial Goods] report was done six months ago or so, and then we revisited the question in the past month, and the sentiment was the same, so it hasn’t gotten better yet.” — Nate Savona, transportation and advanced industrial partner, Oliver Wyman
While the outlook for 2026 does come with optimism, BMI’s Chehab pointed to several risk factors, including:
- A weakening labor market;
- Higher-than-expected inflation;
- Limited Fed easing due to inflation;
- Financial market volatility due to a potential AI bubble;
- Escalating trade tensions; and
- Political uncertainty tied to midterm elections.
Despite the challenges, there’s cautious optimism for 2026, with the potential rebound of the trucking industry on the back of improving values serving as a bellwether for the broader economy, TD’s Sasso said.
“When you look at values, we may be in a trough right now where we’ve hit the bottom, and hopefully those valuations, we’re going to see coming back up,” he said. “Overall, there’s much more optimism going into 2026, and hopefully that is the case that would benefit all businesses, including ours.”
Check out our exclusive industry data here.
Finance professionals expect artificial intelligence (AI) to significantly disrupt the profession over the next two years, but few feel equipped to harness the full potential of those tools.
New data from the AICPA and CIMA’s Future-Ready Finance: Technology, Productivity, and Skills Survey Report revealed a significant gap between finance professionals’ expectations of AI’s impact and their organisations’ readiness to adopt it.
The majority of respondents (56%) said generative AI has become the most prominent skills gap for their organisations in 2025. Overall, IT/tech skills also emerged as a leading priority (47%) this year, despite being considered a secondary concern (20%) in 2021.
“This highlights a strategic shift towards using advanced technology as a means of enhancing value and efficiency, rather than simply supporting operations,” the survey said.
However, many organisations are still struggling to shift gears. The survey found that while 88% believe AI will be the most transformative technology trend in accounting and finance over the next 12 to 24 months, only 8% said their organisation is “very well prepared” to manage this transformation.
The AICPA and CIMA surveyed more than 1,400 members in senior finance and accounting roles globally in August and September.
The biggest barrier to technology adoption for companies this year was a lack of human capital, skills, and talent (50%), followed by safety and security concerns (47%) and doubts about technology maturity (42%).
“The advance of AI tools in the last two years is enabling a paradigm shift in how finance teams operate and the work they can do to generate value for their organisations,” Andrew Harding, FCMA, CGMA, chief executive–Management Accounting at the Association of International Certified Professional Accountants, said in a news release. “While professionals recognise the potential on offer, many today feel underprepared and under-skilled. There’s a clear gap between anticipating disruption and taking action.”
To address skills gaps in finance teams, organisations favoured internal training programmes (62%) ahead of external training programmes (45%) and hiring new talent (35%), according to respondents. On-the-job training was ranked the most effective upskilling approach (61%) amongst finance professionals.
Internal training can be flexible, hands-on, and adaptive, often developing through experimentation and adjustment. But while hiring can be seen as a reactive strategy that does not solve the industry-wide skills shortage, the survey said, it is often a necessary step for driving innovation, especially when internal capabilities are limited.
Other key findings from the survey:
Productivity deficits hold back adoption. Lack of skills (41%) and low motivation (37%) were the top barriers to productivity, the release said, followed by incompatible technology systems and poor coordination in tech implementation (both at 32%).
Skills shortages extend beyond gen AI. Broader technology skills (AI, big data, cloud, Internet of Things, robotics) remain a concern (37%), alongside data and analytics (36%), the release said. Significant gaps also persist in areas such as communication, influencing, and critical thinking (33%) and business partnering (32%).
Learning preferences should guide skills strategy. “The dominance of internal training and the strong preference for on-the-job learning indicate a clear path forward,” the survey said. “Strategic investment must be channelled into practical, accessible, and continuous upskilling programmes and collaborative projects to bridge the readiness gap and unlock productivity gains.”
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
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