45: Behavioral Finance and How Betterment is Optimizing Around It

Dan Egan is the Director of Behavioral Finance and Investments at Betterment. He has spent his career using behavioral finance to help people make better financial and investment decisions. Dan is a published author of multiple publications related to behavioral economics. We were fascinated at the prospects of how technology and psychology may be blended to help us as investors make better decisions, and in many ways, make fewer decisions. Dan joins us to talk about his background in the field, analysis of mountains of behavioral data, and how Betterment is optimizing their platform around a very important part of investing – human emotions. Links: WebsiteLinkedin @daniel_eganBetterment archives for Dan Egan > Try Betterment for 6 Months Free with this link Discussed: Betterment CEO Jon Stein: A Decade of Pioneering Robo Advisory - ILAB 22 Sam Mark’s Personal Millions and Show Introduction - ILAB 01 From $1k to Future Millionaire: Johnny FD’s Investments - ILAB 02 From $0 to Self Made, How to 300X Your Investment - ILAB26 Time Stamps: 03:53 - Beginning in behavioral finance 06:50 - Stock market crash 10:20 - Altering decisions from emotion 14:20 - Personality traits for investing 19:00 - Tax impact preview 23:30 - Conservative and liberal taxpayers 26:00 - Buy and hold vs. active manager 28:00 - Getting hired at Betterment 31:00 - The Betterment team 34:44 - Design and user experience 38:00 - Recession and market crisis plan 43:28 - Marketing timing and dips 46:22 - Internal growth vs. the competition 51:20 - Call in advisor service 56:10 - Making quick emotional decisions 59:30 - Anticipating the next downturn 1:00:30 - Investing in yourself 1:06:00 - Surfing in Bali & skiing in Tahoe 1:06:40 - Betterment vs. other Robo-advisors   If you enjoyed this episode, do us a favor and share it! Also if you haven’t’ already, please take a minute to leave us a 5-star review on iTunes and claim your bonus here! Copyright 2017. All rights reserved. Read our disclaimer here.