This snippet is from one of our previous episodes: Going Ape S#!t: How To Hack Your Brain To Make More Money.

You probably like to think your financial decisions are rational.

You weigh up the options. You look at the numbers. You think things through.

Except… your brain doesn’t always work that way.

A huge amount of what we do happens automatically. We react quickly, rely on rules of thumb and make decisions based on patterns we’ve learned over years — often without even realising it.

And according to behavioural economics, that automatic part of the brain can have a much bigger influence over your financial decisions than you might think.

So perhaps one of the biggest risks to your wealth isn’t the market, interest rates or the economy. It’s you…

You have an ape in your head

Start with a design constraint: your brain has limited capacity. Early economists called it bounded rationality. You’ve got a finite bucket of mental energy, and the world is throwing more information at you than you could ever consciously process.

So your brain evolved a shortcut. It built an automatic system — fast, intuitive, and purpose-built to jump to conclusions. If you leap straight to the answer, you skip all the expensive reasoning in between. That saves energy for the things that genuinely matter.

Scientists call the fast one System 1 and the deliberate one System 2. Behavioural economist Phil Slade has a blunter description.

The structures behind System 1 — the hippocampus, the amygdala, the fear centre — are the oldest parts of the brain. They develop first in the womb. And you’ll find every one of them in a chimpanzee.

So we’ve got an ape brain sitting inside our brain. It runs on emotion and rules of thumb. And it influences our decisions far more than we realise.

Why that matters for your money

Here’s the part that should get your attention.

The Dunedin study in New Zealand has tracked around a thousand people across decades: their health, their relationships, their finances, everything researchers could think to measure. It started out asking a simple question: what predicts who succeeds?

It wasn’t IQ. It wasn’t education. It wasn’t which school you went to, or your cultural background, or how much money your parents had.

The strongest predictor was your ability to understand and manage your emotions.

Which, when you sit with it, makes complete sense. Manage your emotions and you build better relationships, you’re more predictable to work with, more opportunities come your way. You can also inhibit impulses and delay gratification… which is more or less the entire job description of a successful investor.

Your biggest wealth risk isn’t the market. It’s the ape.

Ten seconds, 725 years

Phil tells a second story that makes the cost of reactivity impossible to ignore.

A former US Treasury Secretary spent time working with a group of 27 prisoners, studying the relationship between poverty and incarceration. What struck him was the language the men used: reacting versus responding. System 1 reacts. System 2 responds.

Almost every one of them had ended up inside because of a single reactive moment. They were already in a bad situation, but it was the moment they lost their heads that tipped it into something irreversible.

So he asked how long those moments had actually lasted.

Across all 27 men, it added up to a matter of minutes. Less than ten seconds each.

Those seconds produced 725 years of incarceration.

Now most of us aren’t going to prison for a reactive decision…

But the logic doesn’t only apply to crime. Every time you react instead of respond, there’s a cost you never see. Panic-selling. Buying on emotion. Blowing up a negotiation. Walking away from something because it felt wrong in the moment.

You don’t get a sentence. You just quietly lose an opportunity.

The rule that nearly killed him

The last piece is the most useful, because it explains why these reactions feel so right.

Phil grew up walking to school. His mum taught him and his brother a rule for crossing the busy road: hold hands, look left, look right, look left, look right, agree it’s safe, cross together.

Over time, the brain does what the brain does… it compresses. The hand-holding went first. Then the four-way check collapsed into something faster: look right, step out, look left, keep walking.

It was a good rule. It kept him safe for years. And eventually he stopped thinking about it at all.

Then, at seventeen, he won a competition and flew to America. He ran out of the airport to grab a taxi, stepped onto the road, looked right… and was nearly cleaned up by a bus. He can still feel the wing mirror going past his nose.

And his first reaction was to get angry at the bus.

The rule was perfect. The context had changed. But the rule felt so intuitive that the bus copped the blame.

Blaming the bus

We build our rules early — Phil reckons most of us have around 90% of them locked in by puberty. They worked. They kept us safe. So we keep applying them, long after the circumstances that made them sensible have disappeared.

And when they fail, we don’t question the rule. We blame the bus. It’s the market. It’s the timing. It’s bad luck. It’s someone else’s fault.

The rule is so deeply embedded that following it feels good even when it’s actively working against us.

That’s behavioural economics in a sentence: finding the rules you’re misapplying, and showing you the bus.

So what do you do about it?

You can’t delete the ape. It’s load-bearing: it’s what lets you walk, drive, and read this sentence without conscious effort.

But you can notice when it’s driving. The gap between reacting and responding is where better financial decisions get made, and sometimes that gap only needs to be a few seconds.

Before making a major financial decision, give yourself enough space to ask: Am I making this decision because the facts have changed — or because of how I’m feeling right now?

Sometimes that short pause may be one of the most valuable financial habits you can build.

And that’s particularly relevant in today’s property market.

If you’re currently asking yourself whether you should sell, keep holding or perhaps even buy, join us for our live webinar next week. Because when uncertainty is high, the goal isn’t to react faster. It’s to make a more informed decision.

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