False economy What’s in it for me? Understand what makes the

The secret to being financially successful is 
to always admit how little you know.
Do you consider yourself a knowledgeable 
person? Wise even?
If so, you’re in for a shock.
True wisdom lies in realizing how very little you 
actually know and admitting it. The ancient 
philosopher Socrates considered himself wise 
for admitting: “I know that I know nothing.”
This philosophy should also apply when you 
learn new things: don’t fool yourself into thinking 
you now suddenly know a lot, but instead pause 
for a second to look around.
It is a fact of life that the acquisition of new 
knowledge simultaneously illuminates further 
areas of ignorance, if we choose to observe 
them.
For example, once you learn about the 
fundamental basics of the theory of relativity, 
you cannot help but encounter its more 
complicated and sophisticated areas, which 
make you realize that there’s a lot more you 
don’t yet understand. If anything, you now feel 
yourself more ignorant than before!
Unfortunately, most people fail to realize how 
little they know, especially in the field of finance. 
In fact, studies have shown that most adults 
struggle to use even basic financial formulas – 
for example, calculating compound interest. 
What’s worse, they also tend to charge ahead 
with their tiny knowledge base without pausing 
to consider all the areas in which they are 
ignorant.
For example, some people learned the basics of 
investing in risky subprime mortgages and 
thought they knew enough to attain wealth 
through them, but failed spectacularly in 2008 
because they had not paused to learn more 
about their investment. They forgot to ask 
questions about the sustainability and riskiness 
of the instrument.
If you do go that extra step and study finance, 
you can take of advantage of the ignorance of 
others who didn’t bother. This might, for 
example, help you spot investment opportunities 
before others or make lucrative trades with 
them.