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Don’t Let Your Prejudices Damage Your Finances

How much does prejudice affect the decisions that we make and the conclusions that we reach? I am a keen football fan and enjoy chilling in front of the TV watching a football match. Once the match is over it is common to have the respective managers of the teams playing interviewed. It is interesting to listen to their respective views of the same match. Often they both feel that key decisions went against them and implied, if not stated, is the view that the referee or linesmen favoured the other team.

There is a saying that we should not judge someone until we have walked in their shoes for a mile (and some modern day wit has added that then, if we still don’t like them, we are a mile away and have their shoes!).

What does all this have to do with finance? Well, the point that I am trying to make is that we all, consciously or sub-consciously, make decisions and choices that are influenced by our own prejudice but that this doesn’t mean that we are correct.

A customer presented a £20 note to pay for some groceries and this is the conversation that took place as the shopkeeper examined the tendered money to ensure that it wasn’t a fake. The customer said, “Don’t worry; I just got it from the bank.” The shopkeeper responded, “That may be so, but bankers are top of my list of people not to trust.”

The trouble is that the bankers’ reputation, as outlined by the shopkeeper, is a reflection of recent events in which bankers have proved themselves as anything other than trustworthy.

Since the financial crash we find that the banks are unwilling or, more troublingly, unable to lend money however there are still customers out there keen to borrow. As I stated at the beginning, I love watching footie on the TV and I have noticed a worrying trend in the nature of the adverts shown during half-time. No longer do we have banks or building societies competing to lend us money at competitive rates. No. Now we have adverts inviting us to borrow quick fix loans with interest rates measured in the thousands.

I am no fan of the banks that got us into this mess but don’t make the mistake of allowing your negative prejudice towards the banks to entice you into taking out a loan from lending companies offering loans at ridiculous rates.

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