3 Cognitive Biases That Are Keeping Us Poor and Weak
Monday, February 3, 2025.
We like to think we’re rational creatures—masters of our fate, captains of our soul, and all that.
But the truth is, most of our decisions aren’t made through cool, calculated logic.
Instead, we are heavily influenced by cognitive biases—deeply ingrained mental shortcuts that shape our choices without us even realizing it.
Some biases are helpful.
They evolved to keep us alive in a dangerous world where quick decision-making could mean the difference between life and death.
But in our modern environment, a few of these biases are exploited by Limbic Capitalism to work against us, leading us to make impulsive financial choices, avoiding personal growth, and settling for soul-crushing mediocrity.
If you’re feeling stuck, broke, or weak and ineffective, these three cognitive biases might be quietly running the show.
Let’s break them down—and more importantly, learn how to override them for a stronger, wealthier, and more resilient life (btw, I wish I learned this stuff in my profligate youth).
1. Present Bias: Why We’re Trading Your Future for Fleeting Pleasure
What Is It?
Present Bias refers to our tendency to overvalue immediate rewards at the expense of long-term gains. In simple terms, we’d rather have something small right now than something much larger later.
Why It Happens
Our brains evolved to prioritize short-term survival over long-term strategy.
In prehistoric times, delaying gratification could mean starvation or missed mating opportunities. Our ancestors who chose immediate food and reproduction passed on their genes, while those who thought only about 401(k) plans in the Pleistocene Era didn’t make it.
But in today’s world, this wiring works against us.
How It’s Keeping Us Poor and Weak
Present Bias is why we:
Spend money impulsively instead of investing it. You get a dopamine hit from a new gadget or vacation, but future-you is broke.
Skip workouts in favor of instant comfort. You promise yourself you’ll go “tomorrow,” but tomorrow never comes.
Procrastinate on important work. You trade long-term success for momentary distractions like social media.
This bias is particularly insidious because it feels rational in the moment. You genuinely believe that skipping one workout, one savings deposit, or one productive day won’t hurt you. But when these choices compound over time, they lead to financial insecurity, poor health, and unfulfilled potential.
The Research
A study by Laibson (1997) found that we humans systematically undervalue our future selves, leading to poor financial planning and chronic procrastination.
Another study published in Science (Mischel et al., 1972)—the famous Marshmallow Test—showed that children who were able to delay gratification had significantly better life outcomes in terms of income, health, and success.
How to Fight Back
Use Commitment Devices. Automate savings withdrawals, schedule workouts with a partner, or set up public accountability to prevent yourself from making weak, short-term decisions.
Reframe Future Rewards. When considering a long-term goal (e.g., saving for retirement), visualize what success will feel like. Make it emotionally compelling.
Practice Micro-Delays. Instead of saying no outright to an impulse, tell yourself you can have it in 10 minutes, or tomorrow. This helps override the immediate dopamine response.
2. Negativity Bias: Why We Fixate on Fear Instead of Opportunity
What Is It?
Negativity Bias is our brain’s tendency to give more weight to negative experiences than positive ones. We focus on what could go wrong rather than what could go right.
Why It Happens
For most of human history, survival depended on not making fatal mistakes. A prehistoric human who ignored a rustling bush might get eaten by a predator. Those who assumed the worst—even when they were wrong—were more likely to survive and pass on their genes.
This wiring still exists today, but instead of protecting us from tigers, it keeps us paralyzed by self-doubt, fear, and excessive risk aversion.
How It’s Keeping Us Poor and Weak
Negativity Bias is why:
You avoid investing because of fear of loss. You see stories of stock market crashes and ignore the decades of consistent growth.
You hesitate to take career risks. Instead of launching that business or asking for a raise, you imagine the worst-case scenario and stay put.
You’re paralyzed by social comparison. One piece of criticism drowns out 100 compliments, making you afraid to put yourself out there.
The Research
A landmark study by Baumeister et al. (2001) found that negative experiences impact us 2.5 times more than positive ones.
Similarly, Kahneman & Tversky’s (1979) Prospect Theory demonstrated that people fear losing $100 more than they enjoy gaining $100—which is why so many people hoard cash instead of investing.
How to Fight Back
Limit Your Exposure to Negative Stimuli. If the news is making you anxious, cut it out. If social media is filling you with self-doubt, take a break.
Reframe Losses as Tuition. Every failure is a lesson. Instead of dwelling on mistakes, ask: What did I learn?
Track Positive Feedback. Keep a journal of wins, compliments, and achievements to counteract your brain’s tendency to forget them.
3. Dunning-Kruger Effect: Why We Think We Know More (or less) Than We Do
What Is It?
The Dunning-Kruger Effect is a cognitive bias where unskilled folks overestimate their competence, while experts underestimate theirs.
Why It Happens
Incompetent people lack the necessary meta-cognition to recognize their own ignorance. Meanwhile, experts are more aware of how much they still don’t know, making them more cautious.
This bias explains why:
Amateurs think they’re experts after watching a few YouTube videos.
People who fail at business blame "bad luck" instead of learning from mistakes.
Successful people often feel like impostors.
How It’s Keeping Us Poor and Weak
We stop improving because you think you’re already good enough. If we assume we already know everything about finance, fitness, or relationships, we won’t seek growth.
We reject critical feedback that could make us stronger. Instead of listening to experienced mentors, we dismiss their advice.
We make bad decisions with confidence. Overestimating our knowledge leads to reckless investments, career moves, and lifestyle choices.
The Research
Dunning & Kruger (1999) found that those with the lowest competence scores were the most confident in their abilities.
Meanwhile, true experts tended to underestimate their knowledge, leading to "imposter syndrome" in high-achievers.
How to Fight Back
Adopt a Beginner’s Mindset. Assume you have blind spots. Always be learning.
Surround Yourself with Smarter People. If you’re always the smartest in the room, you’re in the wrong room.
Seek Brutal Feedback. The best way to improve is to listen to people who know more than you—without getting defensive.
Final Brain Farts
Cognitive biases aren’t just mental quirks. They shape your entire life—including your finances, physical resilience, and personal growth.
Once again, here are the 3 specific biases that Limbic Capitalism compels us to struggle with:
Present Bias keeps us trapped in short-term pleasure seeking and consuming.
Negativity Bias makes us fearful, and risk-averse.
The Dunning-Kruger Effect keeps us blind to our own ignorance, and paradoxically, also to our gifts and competence.
The good news? These biases aren’t destiny.
Once you’re aware of them, you can rewire your brain to make better decisions. And I’ve found that you can make better choices on a daily basis.
Success isn’t about being perfect.
But it is about recognizing the mental traps that keep you poor and weak—and learning how to outsmart them.
Now, what’s one decision you’ll make today to fight back?