A client once shared a decision he felt really good about… at the time.
He’s a successful executive. Sharp. Disciplined. The kind of guy who makes thoughtful decisions all day long.
One night over dinner, a friend told him about a startup. Big vision. Ground-floor opportunity. Several mutual friends had already committed.
“This could be something.”
So, he wrote a $50,000 check.
A few weeks later, we were in a review meeting, walking through his balance sheet. He still had a $48,000 car loan… at 7%.
I asked, “Help me understand how you decided to invest in the startup instead of paying off the car.”
He paused, smiled, and said, “Yeah… when you say it like that…”
That moment wasn’t about intelligence. It was about being human.
This is where behavioral finance becomes practical.
After more than 25 years of working with successful individuals and families, I've learned that smart people rarely make poor financial decisions because they lack knowledge. More often, their decisions are influenced by emotions, confidence, relationships, and mental shortcuts that affect how all of us evaluate risk and opportunity.
The reality is that intelligence doesn't eliminate financial blind spots.
In some cases, it can make them harder to recognize.
Many people assume that financial mistakes happen because someone lacks knowledge or discipline.
That’s rarely what I see.
In fact, some of the most successful professionals I work with — physicians, executives, entrepreneurs, and business owners — are often the most vulnerable to certain types of financial mistakes.
Why?
Because success creates opportunities.
More investment opportunities.
More people bringing deals.
More access to capital.
More confidence in decision-making.
Those aren’t bad things. In many ways, they’re the rewards of success.
But they can also create blind spots.
The same confidence that helped build a career can sometimes encourage unnecessary risk. The same network that creates opportunities can introduce pressure to participate in investments that may not fit an overall financial plan.
The issue isn’t intelligence.
It’s recognizing when something other than logic is influencing the decision.
When you’ve had success in your career, it’s natural to trust your instincts.
“I make good decisions. I’ll figure this out.”
And to be fair — you probably do make great decisions… in your field. But success has a way of bleeding into areas where we don’t actually have an edge.
I’ve worked with incredible physicians, executives, and business owners.
Being great at what you do doesn’t automatically make you a great investor. Sometimes the confidence that helped you win is the same confidence that leads you to take unnecessary risks.
A 7% car loan payoff is boring.
A startup with “huge upside potential”?
That’s a story.
And we are wired to respond to stories.
“This could be the next big thing.”
“I don’t want to miss out.”
That’s not logic talking; that’s emotion dressed up as opportunity.
The challenge is that a guaranteed return rarely feels as exciting as a possible one.
Even when it’s the better decision.
We like to think we do… but we don’t.
We mentally divide money into buckets:
But money doesn’t work that way.
Every dollar has only one job at a time. Choosing to invest $50,000 in something uncertain instead of eliminating a guaranteed 7% cost is a decision — whether we frame it that way or not.
Most money decisions don’t happen in a vacuum.
Often, they don’t even happen consciously.
They happen over dinner, in conversations with friends, while scrolling or on your phone.
And here’s what I’ve learned:
A compelling person with a compelling story can override a very logical plan.
Not because we’re careless… but because we’re relational. We trust people. We get excited with them. We want to be part of something.
That’s human nature.
The goal isn’t to remove emotion from money.
That’s not realistic, and honestly, it’s not even desirable.
The goal is to recognize it before it makes the decision for you.
Before your next big financial move, try this:
And maybe most importantly:
Say it out loud to someone who isn’t emotionally involved.
Your spouse.
A trusted friend.
Because clarity often shows up the moment you have to explain your thinking.
Smart people don’t make poor financial decisions because they lack intelligence.
They make them because they’re human.
One of the most valuable things you can do with your money is to invite a little objectivity into the process before you decide.
In the end, it’s not just about making smart decisions. It’s about avoiding the ones that quietly work against you.
Major financial decisions rarely happen in isolation. An investment opportunity, debt decision, business transition, retirement choice, or tax planning move can affect the rest of your financial life.
At Spaugh Dameron Tenny, we help successful individuals and families evaluate those decisions with structure, context, and objectivity — so each choice is considered as part of a broader financial plan.
If you’re facing a meaningful financial decision, schedule a conversation with our team.
Smart people can still make poor financial decisions because money decisions are not purely logical. Emotions, overconfidence, social pressure, and mental shortcuts can influence how people weigh risk, opportunity, and trade-offs.
Successful people often have access to more opportunities, more capital, and more influence from professional networks. These factors can create blind spots that affect decision-making.
Emotions such as excitement, fear, urgency, and optimism can influence how people evaluate opportunities and risk. These feelings may lead to decisions that don't fully align with long-term goals.
Common mistakes include overconfidence, chasing investment opportunities based on stories rather than analysis, treating money differently depending on its source, and allowing social influence to shape decisions.
A helpful first step is to pause before a major decision and identify what may be driving it. Ask yourself what you are feeling, what alternatives exist, and how you would explain the decision to someone who is not emotionally involved.
Objectivity can help separate a compelling story from a sound decision. A financial planner can help evaluate trade-offs, identify blind spots, and consider how one decision may affect the rest of your financial life.
This material is for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. Tax considerations vary by individual and should be reviewed with a qualified tax professional. Financial decisions, including borrowing and repayment strategies, should be made based on individual circumstances in consultation with appropriate professionals.
No strategy guarantees success or any particular outcome.
CRN202906-11407772
Shane Tenny, CFP®, is Managing Partner of Spaugh Dameron Tenny, where he helps high-net-worth individuals and families navigate complex financial decisions with clarity, structure, and confidence. Since joining the firm in 2000, Shane has worked with clients through major financial transitions, including career changes, liquidity events, retirement, and multigenerational planning. His approach combines comprehensive financial planning with a focus on behavioral finance, including advanced studies in Behavioral Economics through the University of Chicago Booth School of Business. Shane is the author of Your Next Million, former host of the Prosperous Doc® Podcast, and a nationally recognized financial advisor, speaker, and educator.
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