55% of us are prone to Present Bias and it affects our retirement portfolio. Present Bias is a tendency to put off decisions that are likely to benefit us in the long run, but which involve short-term costs. People prone to present bias have on average 19% less in savings than those who are not affected by it.
Exponential Growth Bias:
70% of us are prone to Exponential Growth Bias i.e 70% of us don’t really understand how compounding works and how it can help us grow wealth over decades of savings. Those who have a good grasp of the power of compounding have 20% more money saved than those who don’t understand it too well.
A Systematic Investment Plan (SIP) is an easy way to beat both the biases by committing to monthly investments.
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