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Are there any introductory books about the relationship between art and psychology/cognition?

Are there any introductory books about the relationship between art and psychology/cognition?



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I'd like to know more about art, music, psychology, and cognition. Since they are related to each other, I'd like to read a book with a topic covering those. Bonus if it's for beginners.


Oliver Sacks has an excellent and very approachable book on the topic (psychology/cognition + music in particular, less art in general): Musicophilia.


The introductory reading section in the Wikipedia page of music psychology has a lot of suggestions.


Artificial cognition: How experimental psychology can help generate explainable artificial intelligence

Artificial intelligence powered by deep neural networks has reached a level of complexity where it can be difficult or impossible to express how a model makes its decisions. This black-box problem is especially concerning when the model makes decisions with consequences for human well-being. In response, an emerging field called explainable artificial intelligence (XAI) aims to increase the interpretability, fairness, and transparency of machine learning. In this paper, we describe how cognitive psychologists can make contributions to XAI. The human mind is also a black box, and cognitive psychologists have over 150 years of experience modeling it through experimentation. We ought to translate the methods and rigor of cognitive psychology to the study of artificial black boxes in the service of explainability. We provide a review of XAI for psychologists, arguing that current methods possess a blind spot that can be complemented by the experimental cognitive tradition. We also provide a framework for research in XAI, highlight exemplary cases of experimentation within XAI inspired by psychological science, and provide a tutorial on experimenting with machines. We end by noting the advantages of an experimental approach and invite other psychologists to conduct research in this exciting new field.

This is a preview of subscription content, access via your institution.


Are there any introductory books about the relationship between art and psychology/cognition? - Psychology

The following is a guest post by Sarah Rainer, PsyD. This week, LifeWay Research published new research on mental illness and the church. Research shows that pastors largely feel unequipped to address mental illness, and that mental illness is still "taboo" in many ways.

She has a doctorate in Clinical Psychology and specializes in working with children, adolescents, and families. She desires to increase awareness and psychoeducation regarding mental illness to the Christian community. Sarah is the wife of Art Rainer and has two sons, Nathaniel and Joshua.

Sarah has thought deeply on these issues and I think her thoughts are worth your time.

Secular psychologists operate on a biopsychosocial model of human development and behavior. This model proposes humans develop and operate according to biological, psychological, and social influences. Accordingly, we are products of our biology and environment, both bearing equal importance.

In more recent years, psychologists have begun recognizing that our spirituality impacts our lives, but have yet to say it is imperative for life. While the traditional psychological theories and models that are based upon naturalism are insufficient from a Christian worldview, not all of secular psychology is wrong. Indeed, there are many helpful and positive aspects of psychology to consider, which is why there is a need for integration.

The successful integration of psychology and Christianity has long been a passion of mine. However, I tread carefully on this topic. As a secularly trained doctor, I recognize my shortcomings in relation to the integration of theology and psychology. The nuances of the Biblical Counseling, Integrationist, and Christian Psychology models have been extensively evaluated by more notable minds than mine.

I will not speak to any one particular model, but provide key points to consider when integrating psychology and Christianity. These points, I believe, fall on the continuum between the Integrationist and Christian Psychology models.

1. Scripture and the Gospel are prominent.

The belief and use of Scripture and the Gospel are perhaps the most prevalent differences between the secular and Christian psychology worlds.

For Christian psychologists, our worldview must be determined by Scripture. Not only should we see our clients as individuals in need of Jesus Christ, but our understanding of mental illness and disorder should also be based upon a Gospel-oriented worldview. As a result, our therapeutic practice will utilize Scripture to heal our clients and glorify Jesus.

2. Operating on a middle ground.

As a trained secular doctor, I appreciate the biopsychosocial model of human nature. Learning about the complexities of humanity provides me with a better framework for understanding and helping my clients. The intricacies of the human brain, the environmental influences on our personality, and the social and culture impact on our lives remind me that pathology cannot simply be reduced to issues of morality or sin.

On the other hand, as a Christian, I acknowledge that all humans are inherently separated from God. This separation causes disorder, sin, and disease of every kind. However, we serve a loving and just God that provides a way out of our depraved state through Jesus Christ. He longs for us to seek Him and His promise of eternity.

Due to the love of this God, I also cannot reduce all pathology to a naturalistic model of humanity. I propose that Christian mental health professionals operate on a middle ground, the bio/psycho/social/spiritual model, which considers both our dignity and depravity as humans.

3. Secular techniques can be helpful.

The use of some secular therapy interventions is not inherently wrong the overreliance and/or independent use of these techniques is. Research and personal testimonies reveal that secular interventions are successful in the abatement of symptoms. However, the independent use of these secular techniques falls short because they simply produce a &ldquosymptom free&rdquo individual.

The end result does not provide dependence on the Lord, salvation, or sanctification. The result is nothing more than freedom from current symptoms, yet there is continued bondage to sin. The underlying cause of pathology (separation from God) has not been addressed. Therefore, we cannot eliminate the Gospel from therapy. We also cannot discard all secular techniques.

The elimination of research-based interventions from therapeutic practice would be a disservice to our clients. Not providing clients with skills that may help alleviate their psychological distress is also not good stewardship of our knowledge.

Helping a child with Attention-Deficit/Hyperactivity Disorder organize their school supplies, explaining and modeling the appropriate use of time-out to parents, challenging negative thoughts, and teaching diaphragmatic breathing, are some examples of secular techniques that do not challenge Scripture-based psychology. As Christian psychologists, we should teach, provide, preach, and pray, just like Jesus.

4. Research can be appreciated.

Secular research has a lot to offer in understanding mental illness. Christian psychologists should cautiously embrace this research. Comprehending the biological, social, and psychological underpinnings of mental illness can create in us great empathy for our clients.

The more knowledge we obtain the more we can adequately help others. Contrastingly, we must also recognize that not all secular research is congruent with Christianity. When research and Christianity contradict each other, we follow the latter.

5. Seek to make a difference outside the therapeutic relationship.

Most psychologists and therapists will have ample opportunities to make differences, exalt Jesus, and create changes within the context of their therapeutic relationships. Although these are wonderful, our influence should not stop there.

Christian psychologists should seek opportunities to change our communities, schools, coworkers, institutions, research, and the whole psychology world. Our influence should move beyond the walls of a therapy room to infiltrate different levels within our field. Jesus went to the world, and so should we.


September 2017

This fun, smart read for anyone eager to better understand (and improve) themselves argues that personality is driven not by nature nor nurture - but instead by the projects we pursue, which ultimately shape the people we become.

Traditionally, scientists have emphasized what they call the first and second natures of personality - genes and culture, respectively. But today the field of personality science has moved well beyond the nature vs. nurture debate. In Who Are You, Really? Dr. Brian Little presents a distinctive view of how personality shapes our lives - and why this matters. Little makes the case for a third nature to the human condition - the pursuit of personal projects, idealistic dreams, and creative ventures that shape both people’s lives and their personalities. Little uncovers what personality science has been discovering about the role of personal projects, revealing how this new concept can help people better understand themselves and shape their lives.

In this important work, Little argues that it is essential to devote energy and resources to creative endeavors in a highly focused fashion, even if it takes away from other components of our well-being. This does not mean that we cannot shift from one core project to another in the days of our lives. In fact, it is precisely that ability to flexibly craft projects that is the greatest source of sustainability. Like learning to walk, forcing ourselves out of balance as we step is the only way in which we can move forward. And it is the only way that human flourishing can be enhanced.

The well-lived life is based on the sustainable pursuit of core projects in our lives. Ultimately, Who Are You, Really? provides a deeply personal itinerary for exploring our personalities, our lives, and the human condition.

You can buy this fascinating book on Amazon via the following link.

From the UK? Click on image below!


What are the major branches of psychology?

Psychology is a vast discipline, comprising of an interesting range of specialities that have emerged as the field has progressed over time. The scientific basis for modern psychology means it is ever-evolving, with new developments being made, and frontiers being explored every day by dedicated professionals and academics in the field. Here we take a look at the core branches of psychology, and how they contribute to our greater understanding of human behaviour.

Basic science of psychology

Abnormal psychology

This branch of psychology studies irregular patterns of behaviour, thought, and emotion. This may or may not be considered in the context of a mental disorder. Whilst there is some variance on what typifies ‘abnormal’, abnormal psychology specifically inspects behaviour in a clinical context to better understand and contain behaviour considered to be statistically, morally, or functionally deviant or aberrant.

Behavioural neuroscience

Also known as biological psychology, and closely aligned to developmental psychology, behavioural psychology is the application of biological principles to the study of the physiological, genetic, and developmental mechanisms of behaviour in humans and other animals. It touches upon the nature of personality, the causes of abnormal behaviour, reactions to stress, and the effectiveness of therapy.

Cognitive psychology

As another central area within the science of behaviour and mind, cognitive psychology studies mental processes including language, memory, intelligence, thinking, creativity, perception, attention, and problem solving. This arm of psychology actively overlaps with other disciplines within psychological study such as educational psychology, abnormal psychology, developmental psychology, social psychology, and even economics.

Comparative psychology

This area of scientific study researches the behaviour of (non-human) animals. There is an underlying assumption in this field that many laws of behaviour can be applied across species, so that any study of animals will produce phylogenetic knowledge applicable to human beings. However, some researchers argue that this is the not the sole purpose of comparative psychology and that there is great value to be found in the focused study of species in isolation.

Cross-cultural psychology

Cross-cultural psychology is the scientific study of human behaviour and thought processes in the context of different cultural conditions and with respect to their variability and invariance. The purpose of this is to expand and develop psychology by widening research methodologies to recognise the impact of cultural variance upon behaviour, language, and meaning.

Cultural psychology

Cultural psychology is the study of the ways in which a person’s psychological and behavioural tendencies are both rooted in and influenced by their culture. The primary principle of cultural psychology is that the mind and culture are inseparable and mutually essential, which means that human beings shape their culture in the same way that they are shaped by their culture.

Differential psychology

Strongly related with the other elements of psychology, differential psychology assesses the ways individual behaviours differ and the inner processes that affect these behaviours. This is what sets differential psychology apart from other aspects of psychology, where psychologists more often study groups of people, or try to determine generalised psychological processes and apply them to all individuals.

Developmental psychology

Developmental psychology is the scientific study of the ways and reasons why human beings change over the course of their lives. By examining the various stages of life, from childhood though adolescence to adulthood and aging, developmental psychologists study aim to understand and explain how thoughts, feelings, and behaviours change throughout life.

Evolutionary psychology

This theoretical approach to the social and natural sciences examines psychological structures from a modern evolutionary perspective. It seeks to recognise which human psychological features are evolved adaptations, the functional outcomes from natural selection or sexual selection in human evolution. Evolutionary psychologists propose that evolutionary theory can supply a metatheoretical framework that integrates the entire field of psychology.

Experimental psychology

Experimental psychology concerns the work accomplished by those who apply experimental methods to psychological study to identify and comprehend its underlying psychological processes. This approach is undertaken by using human and animal subjects in relation to a multitude of topics including but not exclusive to cognition, learning, motivation, emotion, memory, sensation and perception developmental process, and social psychology.

Mathematical psychology

This approach to psychological research is based on the mathematical modelling of perceptual, cognitive, and motor processes, and has the goal of obtaining more exact hypotheses to yield firmer empirical validations. It is grounded in established rules that correlate quantifiable stimulus characteristics with quantifiable behaviour, very often formed by ‘task performance’ or how a person does with a given task.

Personality psychology

Researching personality and how it varies among individuals, this area of study investigates individual psychological differences, human nature, and the psychological similarities of people by forming a coherent insight into an individual and their main psychological processes. In this sense, ‘personality’ is described as a structured set of characteristics that individually affect a person’s emotions, motivations, behaviours, and thoughts in different situations.

Positive psychology

A relatively new field within the science of psychology, positive psychology concerns itself with the concept of Eudaimonia, a Greek term for ‘human flourishing’. It is the scientific study of the strengths that allow human beings to thrive, individually and communally. It assumes that people inherently want to make life worth living and will cultivate what is best in themselves to achieve this in terms of the biological, personal, relational, and cultural features of life.

Quantitative psychology

This field of scientific study brings statistical analysis of human or animal psychological processes with a method of mathematical modelling, and research design and methodology. Psychologists working in this field develop and analyse a broad range of research methods such as psychometrics, which is concerned with the theory and technique behind psychological measurement.

Social psychology

This is the scientific study of the way thoughts, feelings, and behaviours are affected by the actual or implied presence of another people. In this way human behaviour is explained as the result of interaction between mental states and social situations. Social psychologists focus on topics such as group behaviour, social interaction, nonverbal behaviour and communication, and social influences on behaviour.

Clinical psychology

This element within the field of psychology blends science, theory, and clinical expertise to better understand, prevent, and relieve psychological issues that cause distress or dysfunction. From this, it means to improve mental wellbeing and promote personal development. Clinical psychology includes psychological assessment and psychotherapy, and is a regulated mental health profession in some countries.

Educational psychology

Sharing some ground with cognitive and behavioural psychology, this is the scientific study of human learning. Researchers review learning processes to understand individual differences in intelligence, motivation, cognitive development, and self-concept. Educational psychology depends on quantitative methods such as testing and measurement, toward the refinement of educational activities related to instructional design, classroom management, and assessment.

Forensic psychology

At the point where the justice system and psychology converge is forensic psychology. It encompasses jurisdictional considerations – as law varies from place to place – whilst properly cooperating with relevant parties such as judges and lawyers. Forensic psychology also addresses elemental legal principles in relation to expert witness testimonies and other specific areas like workplace discrimination and child custody.

Industrial and organisational psychology

Also known as occupational psychology, work and organisational psychology, and I-O psychology, this increasingly prevalent discipline within psychology studies the science of human behaviour in relation to the workplace. Work in this area involves applying research on employee behaviours and attitudes to refine training practices and management systems in order to improve performance, motivation, job satisfaction, and occupational health and safety.

Political psychology

This interdisciplinary academic field within psychology aims to interpret politics, politicians, and political behaviour from a psychological perspective. The connection between politics and psychology is mutual, with psychology being used as a means to explain politics and politics being used to conversely explain psychology. Political psychology draws on many other subjects such as anthropology, sociology, economics, philosophy, journalism, and history.

Sport psychology

Another interdisciplinary field within psychology is sport psychology, which brings input from other related fields including physiology, biomechanics, and kinesiology. It looks at how psychological factors impact upon performance and the ways in which sport and exercise affect psychological and physical concerns of a participant. Whilst performance improvement is central to the subject, it has further relevance to communication, team building, and career transitions.

Graduates of psychology degrees can expect a range of exciting career opportunities to open up for them, both inside and outside of the field. If you’d like to launch a rewarding career in psychology, and develop a professional skillset sought by employers worldwide, then why not consider an online bachelor’s degree in psychology?


CREATIVITY

Creativity is the ability to generate, create, or discover new ideas, solutions, and possibilities. Very creative people often have intense knowledge about something, work on it for years, look at novel solutions, seek out the advice and help of other experts, and take risks. Although creativity is often associated with the arts, it is actually a vital form of intelligence that drives people in many disciplines to discover something new. Creativity can be found in every area of life, from the way you decorate your residence to a new way of understanding how a cell works.

Creativity is often assessed as a function of one’s ability to engage in divergent thinking . Divergent thinking can be described as thinking “outside the box” it allows an individual to arrive at unique, multiple solutions to a given problem. In contrast, convergent thinking describes the ability to provide a correct or well-established answer or solution to a problem (Cropley, 2006 Gilford, 1967)


Faith and psychology in historical dialogue

Psychology as we know it today emerged in the post-enlightenment period from roots in theology, as well as anthropology, physiology, education and philosophy. This has contributed to the ongoing debate around the tensions between psychology (as a natural science of behaviour), the human spirit, theology, religious experience and practice.

Psychology is thought of as a relatively new discipline, but its subject matter has been addressed throughout the more ancient history of philosophy and theology. Early thinking on the nature of piety and religion followed a number of trends.

Descriptive reflections on the relationship between faith and daily living can be found in writings now seen as the scriptures of the major world religions, and from St Augustine onwards the theological tradition has offered sophisticated accounts of the person. This trend is illustrated by the traditions of the medieval mystics, and the work of 18th- and 19th-century philosophers and theologians.

A second trend, dating back to the Greek rationalists and the Roman epicureans, is explanatory. Long before Freud these explanations invoked the role of fear, of dreams, and the idea of projections of idealised humanity. However, to contrast these descriptive and interpretative traditions aggravates an unhelpful dichotomy. The Protestant theologian Friedrich Schleiermacher, writing in the early 18th century, transcends this distinction in his demonstration of the interpenetration of dialectic and hermeneutics (or interpretation) (Frank, 2005).

A significant proportion of early scientific and therapeutic psychologists came from a religious background, or were heavily influenced by religion. Ivan Pavlov was the son of a Russian Orthodox priest and Wilhelm Wundt was the son of a Lutheran pastor. The overlap (and competition?) in psychological thinking and practice between the interests of religious ministers and carers, and scientists and secular practitioners, has been evident for the past century.

Sigmund Freud wrote on both primitive and developed religion over a number of years, from Totem and Taboo in 1913 to Moses and Monotheism in 1939. Describing himself as ‘A godless Jew’ he saw religion as essentially an ‘illusion’ – a social neurosis. By contrast Carl Jung, the son of a Swiss Reformed pastor, saw the absence of religion as the chief cause of adult psychological disorders. His approach, developed in many publications over 30 years (see, for example, Modern Man in Search of a Soul, 1933) was based on his concept of the ‘collective unconscious’ of the human race, seeing religion as primarily experiential.

The term ‘psychology of religion’, commonly used from the late 19th century, simplifies a complex concept now more often expressed in terms of religions, spirituality and transcendence. It also conceals the narrow focus of earlier work, which was almost solely on faiths within the Judaeo-Christian tradition. The stance of psychology of religion is one outside any of the religious traditions, whose credal statements and theologies are not treated as authoritative of themselves. Rather, they are treated as objects of examination according to the ‘rules of engagement’ of psychology. It should be distinguished from religious or pastoral psychology, which draws on the insights and beliefs of religious tradition, perhaps articulated in a developed theology, alongside psychological evidence and argument. Serving different purposes, each can be intellectually valid and respectable, but it is important that the one is not confused with the other. However, Psychology of Religion continues to be the most frequently used title of both books and research journals in this field.

The formal study of the psychology of religion first gathered momentum in the United States, perhaps because of both the religious diversity of the country and the spirit of progressive reform present in both the social sciences and liberal Protestantism. The 1899 book The Psychology of Religion, by the American Edwin Starbuck, is usually cited as the first text book in the field the psychoanalytically influenced 1923 book with the same title by Robert Thouless is often cited as one of the earliest British books.

An influential early British study of the relationship between personal behaviour and religious affiliation was Francis Galton’s study on the efficacy of prayer, first published in 1872. William James’s The Varieties of Religious Behaviour, based on documents from people who were conspicuously religious, is seen as an early classic, and was first presented at Edinburgh as the Gifford Lectures in 1901–02. Reading through later British texts from this period, written as often by doctors and theologians as by psychologists, the strong influence in Britain of the ‘New Psychology’ of both Freud and Jung is apparent.

Somewhere in the last two decades of the 19th century, there was systematic university-level teaching of empirical psychology of religion already taking place in the UK. A very early textbook by the Jesuit priest Michael Maher, published in 1890, was in use at what was to evolve into Heythrop College, University of London. Founded as a Roman Catholic seminary, Heythrop had a long tradition of teaching what would now be called philosophy of mind, but was then called ‘rational psychology’. Onto this tradition, a decade before William James’s Gifford Lectures, was grafted the teaching of empirical psychology to young Jesuits preparing for ordination as priests. As evidenced by his textbook, Maher was very careful to delineate the different methodologies involved in the different disciplines. He included under ‘empirical psychology’ a range of subjects that may sound familiar, including the study of language and languages, developmental psychology, cross-cultural studies, animal psychology, physiology, pathology and psychiatry, psychometrics and psychophysics.

The tradition of teaching empirically based psychology to Jesuits in training continued through the 20th century. In 1970 Heythrop became a college of the University of London, as a specialist school in philosophy and theology, and in the early 1980s psychology of religion began to be taught as a formal subject, with an option paper made available initially in the undergraduate degree programmes and later in a taught master’s degree in pastoral psychology. Finally, in 1998 a full MA degree in psychology of religion was launched.

There were two main ways in which psychology was embraced by the churches in Britain during the inter-war period. The first way was through informal and loosely structured pastoral and ‘medical’ cooperation (medical in this context referring mostly to psychotherapists or medical psychologists). The second way was more formally through the establishment of a number of organisations, such as the City Temple psychological clinic in London, set up by the Methodist minister Leslie Weatherhead, and the Guild of Pastoral Psychology established in 1937 to promote the work of Jung.

Following the Second World War, therapeutic and empirical approaches to psychological understanding of religion developed slowly in Britain, limited by the slow growth in number and size of university psychology departments. As an example of therapeutic approaches, the Leeds-based Methodist minister and psychotherapist Harry Guntrip was concerned to communicate psychological thinking to ministers through his Psychology for Ministers and Social Workers (1949). The Oxford-based Michael Argyle, better known as a social psychologist, charted the research field as it was in the mid-1950s in his foundational book Religious Behaviour (1958), continuing up to his last book Psychology of Religion: An Introduction (2000), which offers an informed and balanced overview.

The subject undoubtedly languished academically in Britain until a revival of interest, usually dated from the mid-1970s (Francis, 1978). This renewed interest in the psychology of religion has been characterised by new thinking and research that both addresses the methodological complexities in the field, and also pays attention to and draws from non-Western faith traditions, from both Africa and Asia. The developments in the scope of the field have been along two main paths: the academic study of the interface between psychology and religions, and pastoral psychology, or the role of psychology in the service of faith communities.

Religion under the spotlight of psychology
The range of academic work on the relationship between faith and psychology can be illustrated by the work of three research centres in England. The first of these is the Alister Hardy Research Centre for Religious Experience, founded in Oxford by the eminent zoologist Sir Alister Hardy in 1969 (and now located in Lampeter), carrying out, as the name indicates, studies of religious experience largely based on their extensive archive of personal experiential accounts.

The centre became the focus of a number of researchers, including the Australian Laurence Brown, who was Director for a formative period in the 1990s. Another set of studies stimulated by the centre was carried out by David Hay, leading to his Religious Experience Today (1990), and new work using the archives continues to be published.

Two major research centres applying psychological theories and methods within the framework of theological and church-related concerns were established in the 1990s. Fraser Watts’s research group at the University of Cambridge, the Psychology of Religion and Religious Research Group, is dedicated to exploring the interface between psychology and religion in theoretical, empirical and applied ways, through three subgroups. The Theology and Theory subgroup seeks to clarify the conceptual relationship between the two disciplines the Religious Cognition Research Laboratory conducts empirical research into religious cognition and the Cambridge Institute for Applied Psychology and Religion relates psychological research to educational programmes. Examples of the published work of these groups are Jesus and Psychology (Watts, 2007), concerning the connection between psychology and the Jesus of the Gospels, and an examination of the major themes linking psychology and Christian ministry in Psychology of a Christian Ministry (Watts et al., 2002).

Leslie Francis’s research group, established at the University of Wales and recently transferred to the University of Warwick, has framed the psychology of religion within the context of empirical theology. This research group has focused on five main themes: clarifying the relationship between theology and psychology employing psychological theory within the context of biblical hermeneutics drawing on personality psychology to illuminate areas of congregational life and aspects of ministry (including clergy work-related psychological health and burnout) exploring individual differences in the attitudes and beliefs of clergy, churchgoers and church-leavers and examining the association between religion and values among young people. Examples of their work on the connections between theology and psychology, and between hermeneutics and psychology, are displayed in Faith and Psychology (Francis, 2005) and Preaching with All Our Souls (Francis & Village, 2008).

Psychology in the service of faith communities
There are a number of ways in which these insights have been applied to support the ministry of churches and local faith communities. A distinctive approach to counselling within a Christian context was founded in 1962 by the psychiatrist Frank Lake under the title of the Clinical Theology Association. This movement was among the first to organise training seminars for both ordained ministers and lay people, and was followed by other organisations, such as the Westminster Pastoral Foundation, offering professional training for counsellors. Many ordination training courses now include pastoral psychology within basic training. Psychologists within faith traditions have set up their own interest groups, such as the British Association of Christians in Psychology. There now many examples of psychologists and psychological therapists, some of whom are also ordained ministers of religion, offering educational and training opportunities, as well as informal support, to local faith congregations, in for example applying insights from social psychology in resolving conflict within congregations (see Savage & Boyd-Macmillan, 2010).

Conclusion
Within the past 30 years there has been a resurgence of interest in Britain in the range of relationships between psychology and religion. Much of this growth can be attributed to the emergence of a number of individuals who are both psychologically and theologically trained and who have sustained innovative research and educational programmes – such as the Godly Play initiative to develop spirituality in children (see www.godlyplay.org.uk) – and the diffusion of this understanding through an expanding range of publications and learning opportunities.

Box 1: ‘Us’ and ‘them’
While open to some methodological criticism (e.g. Mavor et al., 2011), the work of Altemeyer and Hunsberger (e.g. 1992) on religious fundamentalism has had considerable influence. One suggestion that seems to warrant reflection from both theological and psychological viewpoints is that of what Bob Altemeyer (2003) calls ‘religious ethnocentrism’.

In coming to committed belief, and to committed membership of a community of belief, there is a risk that I will learn to make ‘us-and-them’ judgements that exclude all others who do not share my belief. Altemeyer, looking at early patterns of learning and levels of scores on measure of fundamentalism, notes that ‘Religious fundamentalists tend to have a very small “us” and quite a large “them” when it comes to faith.’

How to enable people to acquire beliefs and values on which to base their lives, without at the same time being trained in religious ethnocentrism, calls for further debate between religion and psychology. Given the depth of commitment characteristic of many of the founding figures of psychology, it is no surprise that psychology, too, has its own communities of belief, fundamentalisms, and even its own ethnocentrisms. Dialogue promises to be fruitful – and far from dull.

John Hall is at the School of Health Care, and at the Centre for Health, Medicine and Society, at Oxford Brookes University [email protected]

Leslie Francis is at the Warwick Religions and Education Research Unit, University of Warwick and is Canon Theologian at Bangor Cathedral, Wales [email protected] .

Brendan Callaghan SJ is Master of Campion Hall, University of Oxford [email protected]


Psychology and the Law, Overview

Roy S. Malpass , Jane Goodman-Delahunty , in Encyclopedia of Applied Psychology , 2004

1 Introduction

If experimental psychology is to enter into its period of practical service, it cannot be a question of simply using the ready-made results for ends which were not in view during the experiments. What is needed is to adjust research to the practical problems themselves and thus, for instance, when education is in question, to start psychological experiments directly from educational problems. Applied Psychology will then become an independent experimental science which stands related to the ordinary experimental psychology as engineering to physics.

The time for such Applied Psychology is surely near, and work has been started from most various sides. Those fields of practical life which come first in question may be said to be education, medicine, art, economics and law.

This bit of advocacy was written by Hugo Muensterberg in 1907, and makes clear that both the vision and the empirical research program on which the field is founded were present a century ago. Research at the time, and much of the work since, has taken place in the areas of perception and memory, as well as abilities, intellectual performance and social relations, areas in the list of problems related by Muensterberg. All of these areas are treated in the present section of this encyclopedia, and while they would all be recognized by turn-of-the-19th-century psychologists, their elaboration since that time has been considerable. Legal psychology has grown in many ways, and has multiple foci.


Book Notes: “The Psychology of Money” by Morgan Housel

The Psychology of Money by Morgan Housel (2020) examines personal finance through the lens of human behavior. It’s a fresh take on a well-trod subject many personal finance books focus on exogenous considerations: e.g. how the stock market works, how to select stocks or build a portfolio, how to time the market, etc. Housel’s focus is the relationship between people and money—with particular emphasis on the human variable of the equation. “To grasp why people bury themselves in debt you don’t need to study interest rates you need to study the history of greed, insecurity, and optimism.”

Housel’s conviction is that behavior trumps other considerations in the pursuit of financial success. “Doing well with money has a little to do with how smart you are and a lot to do with how you behave.” Engage in the right behaviors and you are likely to succeed. Similarly, no amount of intelligence, savvy, or inside information will save you from the wrong set of behaviors.

Each of the first 18 chapters in the book explores an individual human behavior or attitude towards money (the final two chapters are a summary of the lessons and a commentary on Housel’s personal financial practices). Certain behaviors induce positive outcomes while others guarantee failure. For instance, the first chapter titled “No One’s Crazy” considers the limits of our understanding vis-à-vis the limits of our personal experiences. Consider that we are all, in the grander scheme of things, woefully inexperienced. “Your personal experiences with money make up maybe 0.00000000001% of what’s happened in the world, but maybe 80% of how you think the world works.” In other words, there’s a huge gap between firsthand knowledge and how we parlay those limited insights into making sense of the world. Our experiences color our judgment, but the foundations of that judgement are dubious, incomplete, and full of blind spots.

For example, consider two different people born in different decades and their attitudes towards the stock market, one born in the 1950s and the other in the 1970s. The first individual, as a teenager and young adult would have witnessed the anemic stock market returns of the 1960s-70s (low single digit returns in the decade aggregate). The second individual, as an adolescent and young adult, would have watched the double-digit returns for both the 1980s and 1990s (see this article for a graph showing decade-by-decade stock market returns). The latter is more likely to enter adulthood with a bullish attitude towards equities. The former is likely skeptical of the stock market having witnessed two decades of negligible returns. The lesson: you cannot discount the impact of personal experience on your decision-making process (nor can you discount the unique set of circumstances that influence the decisions made by others).

Housel’s book is filled with these sorts of lessons. Some lessons caution us against certain behaviors, other lessons encourage us to embrace beneficial habits. The beauty of these lessons is that they are accessible to anyone: they are not the sole domain of high-income earners or those with elite education degrees. Reading this book won’t give you a profound knowledge about investment instruments, asset allocation, or tax-advantaged strategies it will, however, improve your relationship with money and your attitude regarding personal finance. It isn’t difficult, Housel assures us, financial wealth just requires discipline, patience, and a handful of constructive behaviors.

Note: For those interested in an abbreviated version of Housel’s book, check out an article he wrote in 2018 with the same title: “The Psychology of Money” (collaborativefund.com). The book expands upon the ideas introduced in the 2018 article but you can get a good taste of his ideas there.

Pros: Could become a classic in the personal finance space. Strong focus on individual attitudes and behaviors (which are within the reader’s locus of control). Ideas and themes have broad application beyond personal finance.

Cons: People looking for advice on specific financial instruments, strategies, and the like will be disappointed (his primary strategy is save and hold and let compounding work its magic). Housel’s clear, breezy style sometimes belies the profundity of his ideas.

Verdict: 8/10

Highlights

Introduction: The Greatest Show on Earth

“The premise of this book is that doing well with money has a little to do with how smart you are and a lot to do with how you behave.”

“A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.”

  • Ronald James Read: Gas station attendant, janitor and American philanthropist. Read saved throughout his life, lived frugally and amassed an $8 million net worth at time of death. The majority of his fortune was left to a local hospital and library.
  • Richard Fuscone: Harvard-educated Merrill Lynch executive. Borrowed heavily and spent lavishly, got hit by the 2008 financial crisis, declared bankruptcy.
  • “Ronald Read was patient Richard Fuscone was greedy. That’s all it took to eclipse the massive education and experience gap between the two.”

Two explanations that explain existence of stories like Read and Fuscone:

  1. “Financial outcomes are driven by luck, independent of intelligence and effort.” (true to some extent)
  2. “Financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know.” (Housel believes this is the more common of the two explanations).

Knowing how to do something is insufficient. In many situations you also need to battle against your internal emotional and mental turmoil as well which will influence or alter your planned response.

“We think about and are taught about money in ways that are too much like physics (with rules and laws) and note enough like psychology (with emotions and nuance).”

“To grasp why people bury themselves in debt you don’t need to study interest rates you need to study the history of greed, insecurity, and optimism.”

Chapter 1: No One’s Crazy

Everyone has a unique idea of how the world works. This worldview is influence by a unique set of circumstances, values, and external influences.

“Your personal experiences with money make up maybe 0.00000000001% of what’s happened in the world, but maybe 80% of how you think the world works.”

“No amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty.”

“We all think we know how the world works. But we’ve all only experienced a tiny sliver of it.”

  • If you were born in 1950, the stock market was flat during your teens and 20s (adjusted for inflation).
  • If you were born in 1970, the S&P 500 increased 1000% during your teens and 20s (adjusted for inflation).
  • Which generation is more likely to have a bullish view of the stock market?

“Their view of money was formed in different worlds. And when that’s the case, a view about money that one group of people think is outrageous can make perfect sense to another.”

Consider people most likely to purchase lottery tickets in the U.S.: low-income households who spend, on average $400/year. Number seems crazy to people in higher income households. But some might justify the purchase by saying they are paying for hope and a dream. Without being in their shoes, it’s hard to fully appreciate why they behave the way they do.

Modern financial planning is relatively new. For instance, individual retirement accounts are a recent phenomenon. 401k were created in 1978. Roth IRA was created in 1998. Index funds were developed in the 1970s.

As Housel says, many of the poor financial decisions stem from our collective inexperience: “there is not decades of accumulated experience. we’re winging it.”

Chapter 2: Luck & Risk

Outcomes are determined by more than effort. Luck and risk often figure prominently in individual outcomes.

Story of Bill Gates: Gates attended one of the only high schools in the world that had a computer in 1968. Were it not for the efforts of a teacher, Bill Dougall, to procure a $3000 teletype computer, it is unlikely that Bill Gates would enjoyed the same career success.

  • Gates himself admits as much: “If there had been no Lakeside [High School], there would have been no Microsoft.”
  • At Lakeside there were three standout computer students (all friends): Bill Gates, Paul Allen, and Kent Evans. Kent Evans was destined for success but met an untimely death in a mountaineering accident before graduation. This is used as an example of bad luck.

“Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. they both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.”

“The accidental impact of actions outside of your control can be more consequential than the ones you consciously take.”

“Focus less on specific individuals and case studies and more on broad patterns.”

  • Extreme outcomes are low probability outcomes. Applying the lessons of those who achieved these outlier results isn’t always helpful since external forces of luck and risk may have played immeasurable and non replicable roles.
  • Instead look at broad patterns that offer directional insights. For instance, happy people tend to be those who control their time and energy.

Chapter 3: Never Enough

Story about writers Kurt Vonnegut and Joseph Heller (Catch-22) attending a party hosted by a billionaire. Vonnegut remarks that the billionaire makes more money in a single day than Heller made from his popular novel. Heller responds: “Yes, but I have something he will never have. enough.”

Examples of Rajat Gupta and Bernie Madoff: People who had everything but wanted more. They brought ruin upon themselves because the were greedy and didn’t know when to stop.

“There is no reason to risk what you have and need for what you don’t have and don’t need.”

  • “The hardest financial skill is getting the goalpost to stop moving.”
  • Comparing ourselves to others is often the culprit. Capitalism is good at generating both wealth and envy. But social comparison is a process without end: there’s always someone higher up on the ladder.
  • Enough doesn’t mean you have to go without. Enough means you know when to avoid doing something you will regret.
  • Many things are not worth the risk, regardless of the gains. A short list: reputation, freedom, family and friends, love, happiness.

The only way to win is to refrain from playing the game.

Chapter 4: Confounding Compounding

  • The simplest fact about Warren Buffett’s fortune: He wasn’t just a good investor, he was a good investor for 75+ years.
  • “Effectively all of Warren Buffett’s financial success can be tied to the financial base he built in his pubescent years and the longevity he maintained in his geriatric years. His skill is investing, but his secret is time.”
  • “Good investing isn’t necessarily about earning the highest returns. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That’s when compounding runs wild.”

Chapter 5: Getting Wealthy vs. Staying Wealthy

There are many ways to get wealthy. There is one way to stay wealthy: through a combination of frugality and paranoia.

Getting money and keeping money entirely different things and require entirely different mindsets and strategies.

  • “Getting money requires taking risks, being optimistic and putting yourself out there.”
  • “Keeping money requires the opposite. it requires humility, and fear that what you’ve made can be taken away from you just as fast.”

Michael Moritz (venture capitalist): “We assume that tomorrow won’t be like yesterday. We can’t afford to rest on our laurels. We can’t be complacent. We can’t assume that yesterday’s success translates into tomorrow’s good fortune.”

Nassim Taleb: “Having an edge and surviving are two different things: the first requires the second. You need to avoid ruin. At all costs.”

Having a “survival mindset” requires three things:

  • Aim to be financially unbreakable: be able to stick out swings in the market and stay in the game long enough for compounding to work its magic.
  • The most important thing to plan for: the plan won’t go according to plan. A good plan leaves room for error. “The more you need specific elements of a plan to be true, the more fragile your financial plan becomes.”
  • Be optimistic about the future but paranoid about the obstacles to your success.

Chapter 6: Tails, You Win

Story of the art collector Heinz Berggruen. He amassed an amazing collection of Picassos, Braques, Klees and Matisses.

  • People were amazed by his art investing acumen.
  • The reality was that he bought massive quantities of art. Only a subset of his collection was valuable.
  • “Berggruen could be wrong most of the time and still end up stupendously right.”

“Anything that is huge, profitable, famous, or influential is the result of a tail-event—an outlying one-in-thousands or millions event.”

This is the venture capital model: If a fund makes 100 investments, they expect 80% to fail, a handful to do reasonably well and 1-2 to drive the funds returns.

Consider the distribution of winners and losers in the stock market: most public companies fail, a few do ok and a few generate extraordinary returns.

“When you accept that tails drive everything in business, investing, and finance you realize that it’s normal for lots of things to go wrong, break, fail, and fall.”

Warren Buffett stated at the 2013 Berkshire Hathaway shareholder meeting that he’s owned shares in 400-500 different companies over his life. His significant gains came from just a handful: 10.

We see outsized results from a mere fraction of the events or actions in our lives.

Chapter 7: Freedom

  • “The ability to do what you want, when you want, with who you want, for as long as you want, is priceless.”
  • “Money’s greatest intrinsic value. is its ability to give you control over your time.”

Chapter 8: Man in the Car Paradox

  • “When you see someone driving a nice car, you rarely think, ‘Wow, the guy driving that car is cool.’ Instead, you think, ‘Wow, if I had that car people would think I’m cool.’ Subconscious or not, this is how people think.”
  • In other words, when we signal that we’re wealthy and that people should like an admire us, what really happens is people ignore the person in possession of of the object of envy and just focus on the possession.

Chapter 9: Wealth Is What You Don’t See

“Someone driving a $100,000 car might be wealthy. But the only data point you have about their wealth is that they have $100,000 less than they did before they bought the car.”

“Wealth is financial assets that haven’t yet been converted into the stuff you see.”

Housel reminds us that when people say they want to be millionaires, what it really means is that they want to spend a million dollars.

Spending a million dollars is “literally the opposite of being a millionaire.”

Difference between wealthy and rich:

  • People who live in big homes and drive fancy cars are rich. People with big incomes are rich. They display the fact that they are rich.
  • Wealth is hidden. Wealth is income that is saved, not spent. Wealth is optionality, flexibility and growth. Wealth is the ability to purchase stuff if you needed to.

Chapter 10: Save Money

Three types of people (past a certain level of income):

  • Those who save.
  • Those who don’t think they can save.
  • Those who don’t think they need to save.

Your savings rate is more important than your income or investment returns.

Analogy: The 1970s oil crisis.

  • Problem: Oil supply was insufficient to keep up with demand and economic growth.
  • Solution: Oil supply increased 65% but fuel efficiency and conservation doubled what could be done with that energy.
  • Supply side was out of people’s control but the demand side was completely within the control of the individual.

“You can build wealth without a high income, but have no chance of building wealth without a high savings rate, it’s clear which one matters more.”

“Learning to be happy with less money creates a gap between what you have and what you want—similar to the gap you get from growing your paycheck, but easier and more in your control.”

“Past a certain level of income, what you need is just what sits below your ego.” Solution: Don’t worry about what other people think or feel the need to keep up with the Joneses.

“The flexibility and control over your time is an unseen return on wealth.”

“Having more control over your time and options is becoming one of the most valuable currencies in the world.”

Chapter 11: Reasonable > Rational

  • “Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run, which is what matters most when managing money.”
  • Historical odds of making money increase over time. Lesson: stick to your guns and don’t let short-term volatility force a bad decision. Example: Positive returns over a one-year period are 68% likely, 88% likely over 10 years, and 100% likely over 20 years.

Chapter 12: Surprise!

Scott Sagan (political scientist): “Things that have never happened before happen all the time.”

“History helps us calibrate our expectations, study where people tend to go wrong, and offers a rough guide of what tends to work. But it is not, in any way, a map of the future.”

Remember: Past performance is not an indicative of future results, as the ubiquitous financial disclaimer states.

Focusing on past history and past patterns may cause two things:

Overlooking outlier events that move the needle.

  • Example: 15 billion people were born in the 19th and 20th centuries. But consider the handful that inordinately influenced historical events: Hitler, Stalin, Mao, Edison, Gates, MLK, etc.
  • Example: Consider the projects, events and innovations of the last century: The Great Depression, WW2, Vaccines, Antibiotics, the Internet, the fall of the Soviet Union.
  • Certain people and events have influence that is orders of magnitude more than others. Housel calls these “tail events.”
  • Tail events cause 2nd and 3rd order repercussions. “It is easy to underestimate how things compound. for example, 9/11 prompted the Federal Reserve to cut interest rates, which helped drive the housing bubble, which led to the financial crisis, which led to a poor jobs market, which led tens of millions to seek a college education, which led to $1.6 trillion in student loans with a 10.8% default rate. It’s not intuitive to link 19 hijackers to the current weight of student loans. ”
  • “The majority of what’s happening at any given moment in the global economy can be tied back to a handful of past events that were nearly impossible to predict.”
  • These surprise events are nearly impossible to predict because they are so improbable and depend on the luck and occurrence of many similarly unlikely precursor events.
  • “This is not a failure of analysis. It’s a failure of imagination.” It is difficult to imagine a future that looks nothing like today or anything we have seen before.
  • Daniel Kahneman (psychologist and economist): “The correct lesson to learn from surprises: that the world is surprising.”
  • Similarly we should be skeptical of those who profess to know with great certainty how the future will unfold.

Misreading the present by looking to the past because the past DOESN’T account for the structural changes that are relevant in today’s world.

  • Example: Certain financial mechanisms are new. Advice that predates these realities is obsolete. For instance: 401ks appeared in 1978. Venture capital barely existed 25 years ago. The S&P 500 did not include financial stocks until 1976.
  • Recent history is the most relevant to the future since it accounts for some of the important or relevant innovations and conditions that will impact the future.
  • “The further back in history you look, the more general your takeaways should be.”

Chapter 13: Room for Error

  • Blackjack and poker players know they are dealing with probabilities not certainties.
  • The best plan is to plan for things to not go according to plan.
  • Margin of safety—you can also call it room for error or redundancy—is the only effective way to safely navigate a world that is governed by odds, not certainties.”
  • “The odds are in your favor when playing Russian roulette. But the downside is not worth the potential upside. There is no margin of safety that can compensate for the risk.”
  • It is impossible to prepare for or anticipate what you cannot envision.
  • Minimize the impact of failure by avoiding single points of failure.
  • “The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.”
  • Rainy-day funds are a good idea: save for things you cannot anticipate or predict.

Chapter 14: You’ll Change

  • We are terrible predictors of our future selves. Our present needs, wants, and reams are not the same as our future needs, wants, and dreams.
  • The End of History Illusion is what psychologists call the tendency for people to be keenly aware of how much they’ve changed in the past, but to underestimate how much their personalities, desires, and goals are likely to change in the future.”
  • The result is that long-term plans and decision-making is very difficult to do effectively.
  • Accept the reality that individuals are prone to change. What matters to you today, may be viewed as inconsequential in a decade.
  • Sunk costs—anchoring decisions to past efforts that can’t be refunded—are a devil in a world where people change over time. They make our future selves prisoners to our past, different, selves. It’s the equivalent of a stranger making major life decisions for you.”

Chapter 15: Nothing’s Free

  • “The key to a lot of things with money is just figuring out what that price is and being willing to pay it.”
  • “Successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them in real time.”
  • “Few investors have the disposition to say, ‘I’m actually fine if I lose 20% of my money. but if you view volatility as a fee, things look different.”
  • When you invest in the long term, you need to be willing to accept the short-term price of market fluctuations.

Chapter 16: You & Me

  • One reason for market bubbles: “Investors often innocently take cues from other investors who are playing a different game than they are.”
  • Short term momentum attracts investors with short time horizons. “Bubbles aren’t so much about valuations rising. That’s just a symptom of something else: time horizons shrinking as more short-term traders enter the playing field.” But note that the short-term investors will only stick around so long as the momentum continues, but that this momentum is transient.
  • “Bubbles do their damage when long-term investors playing one game start taking their cues from those short-term traders playing another.”
  • “It’s hard to grasp that other investors have different goals than we do, because an anchor of psychology is not realizing that rational people can see the world through a different lens than your own.”

Chapter 17: The Seduction of Pessimism

“Pessimism isn’t just more common than optimism. It also sounds smarter. It’s intellectually captivating, and it’s paid more attention than optimism, which is often viewed as being oblivious to risk.”

“Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Tell someone they’re in danger and you have their undivided attention.”

Daniel Kahneman: “This asymmetry between the power of positive and negative expectations or experiences has an evolutionary history. Organisms treat threats as more urgent than opportunities have a better chance to survive and reproduce.”

“Pessimists often extrapolate present trends without accounting for how markets adapt.”

  • Remember the story from chapter 10 about the 1970s oil crisis: pundits failed to account for innovation in fuel efficiency and cheaper, more efficient oil extraction.
  • Similarly, in the 2000s, as oil prices increased, certain type of oil extraction became economically feasible such as fracking.

Necessity is the mother of all invention and humanity is endlessly innovative. People respond to adversity and problems with new and novel solutions.

“Threats incentivize solutions in equal magnitude. That’s a common plot of economic history that is too easily forgotten by pessimists who forecast in straight lines.”

Progress is slow, but setbacks and disaster happens quickly and impactfully. “There are lots of overnight tragedies. There are rarely overnight miracles.”

“Growth is driven by compounding, which always takes time. Destruction is driven by single points of failure, which can happen in seconds, and loss of confidence, which can happen in an instance.”

Chapter 18: When You’ll Believe Anything

“The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true.”

“Everyone has an incomplete view of the world. But we form a complete narrative to fill in the gaps.”

B.H. Liddell Hart (historian) in his book “Why Don’t We Learn from History?”: “History cannot be interpreted without hte aid of imagination and intuition. The sheer quantity of evidence is so overwhelming that selection is inevitable. Where there is selection there is art. Those who read history tend to look for what proves them right and confirms their personal opinions.”

Daniel Kahneman: “Hindsight, the ability to explain the past, gives us the illusion that the world is understandable. It gives us the illusion that the world makes sense, even when it doesn’t make sense. That’s a big deal in producing mistakes in many fields.”

Rather than accept that we don’t know something we actively attempt to develop personal theories (stories) that creates illusory understanding that is psychologically comforting. Illusion of control vs. the reality of uncertainty.

Recognize that there is much you do not know and much that is outside of your control.

Philip Tetlock (psychologist): “We need to believe we live in a predictable, controllable world, so we turn to authoritative-sounding people who promise to satisfy that need.”

Kahneman identified relevant errors in cognition:

  • When planning we focus on what we want to do and can do and neglect the plans, actions, and decisions of others who might impact our personal outcomes.
  • When studying the past and forecasting the future we overemphasize individual skill and discount luck.
  • We focus on what we know and ignore what we don’t know. This results in overconfidence.

Chapter 19: All Together Now

  • Chapter is a summary of the lessons in the preceding chapters: humility, less ego, wealth vs. riches, financial decisions that offer peace of mind, use the power of time and consistency, accept failure and risk, strive for time freedom, frugality, make saving a core habit, be prepared to pay the price required for successful outcomes, prepare a margin of safety, avoid extremes, define the game you’re playing.

Chapter 20: Confessions

This chapter highlights some of the financial behaviors and beliefs of the author:

  • Independence drives all Housel’s financial decisions.
  • Live below your means.
  • Derive pleasure from free or low cost activities: exercise, reading, podcasts, learning.
  • Owns his house without a mortgage. Admits that this is a terrible financial decision but a great money decision (peace of mind).
  • Maintains 20% of his assets in cash (outside of the value of his primary home). He does this to maintain a safety net and to avoid being forced to sell his stock market investments in an emergency.
  • Charlie Munger: “The first rule of compounding is never interrupt it unnecessarily.”
  • No longer invests in individual stocks. All Housel’s stock market investments are in low-cost index funds.
  • “Some people can outperform the market averages—it’s just very hard, and harder than most people think.”
  • “Every investor should pick a strategy that has the highest odds of successfully meeting their goals. for most investors, dollar-cost averaging into a low-cost index fund will provide the highest odds of long-term success.”
  • Max out your retirement accounts and contribute to your kid’s 529 plans.
  • His financial situation is simple. All of his net worth consists of a house, a checking account and Vanguard index funds.

“One of my deeply held investing beliefs is that there is little correlation between investment effort and investment results.”

Three key elements of Housel’s approach: a high savings rate, patience, and long-term optimism.


Psychology is the Key

Psychology is key to understanding the implications of technology. Consequently, it seems like it should be pretty straightforward to define media psychology. For some reason, though, it’s not. I have had discussions with colleagues for hours (or at least it seems like it) about what constitutes media, mediated communication, and technology and what we mean by psychology in the context of media—and we’re not even philosophers. In this and the following two posts, I will discuss my definition of media psychology and why I think media psychology is so important.

Both media and psychology have made major contributions to western culture throughout the 20th century. Can you imagine The New Yorker without Freudian references or Jason Bourne without operant conditioning? The term “media,” however, used to be confinable to a bucket labeled “mass media.” Our awareness of media, however, has reached the collective consciousness, as if we all woke up yesterday, awakened by our programmable alarm with the iPod attachment, and over our coffee made automatically by our coffeemaker, checked our blackberry for emails and headline news and then looked up shocked to see that our kids are doing much the same. This awareness is leaving people clamoring for a new level of understanding. There is an infiltration of media applications and information technologies into nearly every aspect of our lives. What does it all MEAN? Just like Mighty Mouse (or maybe Underdog), media psychology emerged in a time of need.

The goal of media psychologists is to try to answer those questions by combining an understanding of human behavior, cognition, and emotions with an equal understanding of media technologies. Unlike some types of media studies, media psychology is not just concerned with content. Media psychology looks at the whole system. There is no beginning and no end. It is a continual loop including the technology developer, content producer, content perceptions, and user response. Just as Bandera describes social cognitive theory as the reciprocal action between environment, behavior, and cognition, so does media psychology evaluate the interactive process of the system. There is no chicken, no egg to this system. They all coexist and coevolve with each other.

There is no consensus among academicians and practitioners as to the scope of media psychology. This is because the field must be representative of not only the work currently being done but also the work that needs to be done. This is a field that changes every time iTunes releases a new mobile app or a new social media platform appears.

The interests of the person doing the defining often drive definitions of a field. However, the fact that both ‘media’ and ‘psychology’ are themselves broad and prone to misconception contributes to the definitional confusion. In spite of our awareness of media everywhere, when someone mentions media the metaphor we fall back on is often mass media. It’s a field where you must continually define your terms. Does ‘media’ mean television or does ‘media’ include computer interfaces that facilitate information management and distribution?

The same heuristics impact the popular perception of the field of psychology. There is a wide world of psychology beyond the narrow view of clinical applications that evoke images of Freud and talk therapy. So it wasn’t surprising in the early days of the field, when media psychology was perceived as a psychologist appearing in the media, such as the radio shrink for many years Dr. Toni Grant or the infamous Dr. Phil. This view of media psychology also has links to the origins of the first division (46) for Media Psychology of the American Psychological Association (APA). Due to the prevalence of mass media relative to other media technologies, it was home to several psychologists with media platforms or who regularly appeared in the media as experts. The initial emphasis in Division 46 was on training psychologists to effectively appear in the media, how to deliver psychological information over the media, the ethical limitations of doing therapy using media, and as a watchdog for the accurate portrayal of psychologists in the media far outweighed the emphasis on research looking at media use and development.

Those early perceptions have evolved as technology use has become more ubiquitous. From social media and mobile apps to big data, there is an increasing awareness of the importance of understanding how media impacts society and how society, in turn, impact media and technology use and development. Reflecting this shift, the APA Division 46 has taken a new name and is now the Society for Media Psychology & Technology.

There is a significant cross-disciplinary aspect of media psychology. Not all people working in media psychology are psychologists. In fact, much of the early work came from marketing and advertising and the bulk of the research in media psychology has been published in academic and applied disciplines beyond psychology, such as sociology, communications, anthropology, media studies, education, computer, and information sciences, as well as business management and marketing. What has often been challenging is the lack of intellectual cross-pollination. Media psychology seeks to address that by bringing together all these approaches and vocabularies with the recognition that communication, cognition, and emotions are fundamental to human experience and therefore have, by definition, foundations in psychological thought.


What are the major branches of psychology?

Psychology is a vast discipline, comprising of an interesting range of specialities that have emerged as the field has progressed over time. The scientific basis for modern psychology means it is ever-evolving, with new developments being made, and frontiers being explored every day by dedicated professionals and academics in the field. Here we take a look at the core branches of psychology, and how they contribute to our greater understanding of human behaviour.

Basic science of psychology

Abnormal psychology

This branch of psychology studies irregular patterns of behaviour, thought, and emotion. This may or may not be considered in the context of a mental disorder. Whilst there is some variance on what typifies ‘abnormal’, abnormal psychology specifically inspects behaviour in a clinical context to better understand and contain behaviour considered to be statistically, morally, or functionally deviant or aberrant.

Behavioural neuroscience

Also known as biological psychology, and closely aligned to developmental psychology, behavioural psychology is the application of biological principles to the study of the physiological, genetic, and developmental mechanisms of behaviour in humans and other animals. It touches upon the nature of personality, the causes of abnormal behaviour, reactions to stress, and the effectiveness of therapy.

Cognitive psychology

As another central area within the science of behaviour and mind, cognitive psychology studies mental processes including language, memory, intelligence, thinking, creativity, perception, attention, and problem solving. This arm of psychology actively overlaps with other disciplines within psychological study such as educational psychology, abnormal psychology, developmental psychology, social psychology, and even economics.

Comparative psychology

This area of scientific study researches the behaviour of (non-human) animals. There is an underlying assumption in this field that many laws of behaviour can be applied across species, so that any study of animals will produce phylogenetic knowledge applicable to human beings. However, some researchers argue that this is the not the sole purpose of comparative psychology and that there is great value to be found in the focused study of species in isolation.

Cross-cultural psychology

Cross-cultural psychology is the scientific study of human behaviour and thought processes in the context of different cultural conditions and with respect to their variability and invariance. The purpose of this is to expand and develop psychology by widening research methodologies to recognise the impact of cultural variance upon behaviour, language, and meaning.

Cultural psychology

Cultural psychology is the study of the ways in which a person’s psychological and behavioural tendencies are both rooted in and influenced by their culture. The primary principle of cultural psychology is that the mind and culture are inseparable and mutually essential, which means that human beings shape their culture in the same way that they are shaped by their culture.

Differential psychology

Strongly related with the other elements of psychology, differential psychology assesses the ways individual behaviours differ and the inner processes that affect these behaviours. This is what sets differential psychology apart from other aspects of psychology, where psychologists more often study groups of people, or try to determine generalised psychological processes and apply them to all individuals.

Developmental psychology

Developmental psychology is the scientific study of the ways and reasons why human beings change over the course of their lives. By examining the various stages of life, from childhood though adolescence to adulthood and aging, developmental psychologists study aim to understand and explain how thoughts, feelings, and behaviours change throughout life.

Evolutionary psychology

This theoretical approach to the social and natural sciences examines psychological structures from a modern evolutionary perspective. It seeks to recognise which human psychological features are evolved adaptations, the functional outcomes from natural selection or sexual selection in human evolution. Evolutionary psychologists propose that evolutionary theory can supply a metatheoretical framework that integrates the entire field of psychology.

Experimental psychology

Experimental psychology concerns the work accomplished by those who apply experimental methods to psychological study to identify and comprehend its underlying psychological processes. This approach is undertaken by using human and animal subjects in relation to a multitude of topics including but not exclusive to cognition, learning, motivation, emotion, memory, sensation and perception developmental process, and social psychology.

Mathematical psychology

This approach to psychological research is based on the mathematical modelling of perceptual, cognitive, and motor processes, and has the goal of obtaining more exact hypotheses to yield firmer empirical validations. It is grounded in established rules that correlate quantifiable stimulus characteristics with quantifiable behaviour, very often formed by ‘task performance’ or how a person does with a given task.

Personality psychology

Researching personality and how it varies among individuals, this area of study investigates individual psychological differences, human nature, and the psychological similarities of people by forming a coherent insight into an individual and their main psychological processes. In this sense, ‘personality’ is described as a structured set of characteristics that individually affect a person’s emotions, motivations, behaviours, and thoughts in different situations.

Positive psychology

A relatively new field within the science of psychology, positive psychology concerns itself with the concept of Eudaimonia, a Greek term for ‘human flourishing’. It is the scientific study of the strengths that allow human beings to thrive, individually and communally. It assumes that people inherently want to make life worth living and will cultivate what is best in themselves to achieve this in terms of the biological, personal, relational, and cultural features of life.

Quantitative psychology

This field of scientific study brings statistical analysis of human or animal psychological processes with a method of mathematical modelling, and research design and methodology. Psychologists working in this field develop and analyse a broad range of research methods such as psychometrics, which is concerned with the theory and technique behind psychological measurement.

Social psychology

This is the scientific study of the way thoughts, feelings, and behaviours are affected by the actual or implied presence of another people. In this way human behaviour is explained as the result of interaction between mental states and social situations. Social psychologists focus on topics such as group behaviour, social interaction, nonverbal behaviour and communication, and social influences on behaviour.

Clinical psychology

This element within the field of psychology blends science, theory, and clinical expertise to better understand, prevent, and relieve psychological issues that cause distress or dysfunction. From this, it means to improve mental wellbeing and promote personal development. Clinical psychology includes psychological assessment and psychotherapy, and is a regulated mental health profession in some countries.

Educational psychology

Sharing some ground with cognitive and behavioural psychology, this is the scientific study of human learning. Researchers review learning processes to understand individual differences in intelligence, motivation, cognitive development, and self-concept. Educational psychology depends on quantitative methods such as testing and measurement, toward the refinement of educational activities related to instructional design, classroom management, and assessment.

Forensic psychology

At the point where the justice system and psychology converge is forensic psychology. It encompasses jurisdictional considerations – as law varies from place to place – whilst properly cooperating with relevant parties such as judges and lawyers. Forensic psychology also addresses elemental legal principles in relation to expert witness testimonies and other specific areas like workplace discrimination and child custody.

Industrial and organisational psychology

Also known as occupational psychology, work and organisational psychology, and I-O psychology, this increasingly prevalent discipline within psychology studies the science of human behaviour in relation to the workplace. Work in this area involves applying research on employee behaviours and attitudes to refine training practices and management systems in order to improve performance, motivation, job satisfaction, and occupational health and safety.

Political psychology

This interdisciplinary academic field within psychology aims to interpret politics, politicians, and political behaviour from a psychological perspective. The connection between politics and psychology is mutual, with psychology being used as a means to explain politics and politics being used to conversely explain psychology. Political psychology draws on many other subjects such as anthropology, sociology, economics, philosophy, journalism, and history.

Sport psychology

Another interdisciplinary field within psychology is sport psychology, which brings input from other related fields including physiology, biomechanics, and kinesiology. It looks at how psychological factors impact upon performance and the ways in which sport and exercise affect psychological and physical concerns of a participant. Whilst performance improvement is central to the subject, it has further relevance to communication, team building, and career transitions.

Graduates of psychology degrees can expect a range of exciting career opportunities to open up for them, both inside and outside of the field. If you’d like to launch a rewarding career in psychology, and develop a professional skillset sought by employers worldwide, then why not consider an online bachelor’s degree in psychology?


Faith and psychology in historical dialogue

Psychology as we know it today emerged in the post-enlightenment period from roots in theology, as well as anthropology, physiology, education and philosophy. This has contributed to the ongoing debate around the tensions between psychology (as a natural science of behaviour), the human spirit, theology, religious experience and practice.

Psychology is thought of as a relatively new discipline, but its subject matter has been addressed throughout the more ancient history of philosophy and theology. Early thinking on the nature of piety and religion followed a number of trends.

Descriptive reflections on the relationship between faith and daily living can be found in writings now seen as the scriptures of the major world religions, and from St Augustine onwards the theological tradition has offered sophisticated accounts of the person. This trend is illustrated by the traditions of the medieval mystics, and the work of 18th- and 19th-century philosophers and theologians.

A second trend, dating back to the Greek rationalists and the Roman epicureans, is explanatory. Long before Freud these explanations invoked the role of fear, of dreams, and the idea of projections of idealised humanity. However, to contrast these descriptive and interpretative traditions aggravates an unhelpful dichotomy. The Protestant theologian Friedrich Schleiermacher, writing in the early 18th century, transcends this distinction in his demonstration of the interpenetration of dialectic and hermeneutics (or interpretation) (Frank, 2005).

A significant proportion of early scientific and therapeutic psychologists came from a religious background, or were heavily influenced by religion. Ivan Pavlov was the son of a Russian Orthodox priest and Wilhelm Wundt was the son of a Lutheran pastor. The overlap (and competition?) in psychological thinking and practice between the interests of religious ministers and carers, and scientists and secular practitioners, has been evident for the past century.

Sigmund Freud wrote on both primitive and developed religion over a number of years, from Totem and Taboo in 1913 to Moses and Monotheism in 1939. Describing himself as ‘A godless Jew’ he saw religion as essentially an ‘illusion’ – a social neurosis. By contrast Carl Jung, the son of a Swiss Reformed pastor, saw the absence of religion as the chief cause of adult psychological disorders. His approach, developed in many publications over 30 years (see, for example, Modern Man in Search of a Soul, 1933) was based on his concept of the ‘collective unconscious’ of the human race, seeing religion as primarily experiential.

The term ‘psychology of religion’, commonly used from the late 19th century, simplifies a complex concept now more often expressed in terms of religions, spirituality and transcendence. It also conceals the narrow focus of earlier work, which was almost solely on faiths within the Judaeo-Christian tradition. The stance of psychology of religion is one outside any of the religious traditions, whose credal statements and theologies are not treated as authoritative of themselves. Rather, they are treated as objects of examination according to the ‘rules of engagement’ of psychology. It should be distinguished from religious or pastoral psychology, which draws on the insights and beliefs of religious tradition, perhaps articulated in a developed theology, alongside psychological evidence and argument. Serving different purposes, each can be intellectually valid and respectable, but it is important that the one is not confused with the other. However, Psychology of Religion continues to be the most frequently used title of both books and research journals in this field.

The formal study of the psychology of religion first gathered momentum in the United States, perhaps because of both the religious diversity of the country and the spirit of progressive reform present in both the social sciences and liberal Protestantism. The 1899 book The Psychology of Religion, by the American Edwin Starbuck, is usually cited as the first text book in the field the psychoanalytically influenced 1923 book with the same title by Robert Thouless is often cited as one of the earliest British books.

An influential early British study of the relationship between personal behaviour and religious affiliation was Francis Galton’s study on the efficacy of prayer, first published in 1872. William James’s The Varieties of Religious Behaviour, based on documents from people who were conspicuously religious, is seen as an early classic, and was first presented at Edinburgh as the Gifford Lectures in 1901–02. Reading through later British texts from this period, written as often by doctors and theologians as by psychologists, the strong influence in Britain of the ‘New Psychology’ of both Freud and Jung is apparent.

Somewhere in the last two decades of the 19th century, there was systematic university-level teaching of empirical psychology of religion already taking place in the UK. A very early textbook by the Jesuit priest Michael Maher, published in 1890, was in use at what was to evolve into Heythrop College, University of London. Founded as a Roman Catholic seminary, Heythrop had a long tradition of teaching what would now be called philosophy of mind, but was then called ‘rational psychology’. Onto this tradition, a decade before William James’s Gifford Lectures, was grafted the teaching of empirical psychology to young Jesuits preparing for ordination as priests. As evidenced by his textbook, Maher was very careful to delineate the different methodologies involved in the different disciplines. He included under ‘empirical psychology’ a range of subjects that may sound familiar, including the study of language and languages, developmental psychology, cross-cultural studies, animal psychology, physiology, pathology and psychiatry, psychometrics and psychophysics.

The tradition of teaching empirically based psychology to Jesuits in training continued through the 20th century. In 1970 Heythrop became a college of the University of London, as a specialist school in philosophy and theology, and in the early 1980s psychology of religion began to be taught as a formal subject, with an option paper made available initially in the undergraduate degree programmes and later in a taught master’s degree in pastoral psychology. Finally, in 1998 a full MA degree in psychology of religion was launched.

There were two main ways in which psychology was embraced by the churches in Britain during the inter-war period. The first way was through informal and loosely structured pastoral and ‘medical’ cooperation (medical in this context referring mostly to psychotherapists or medical psychologists). The second way was more formally through the establishment of a number of organisations, such as the City Temple psychological clinic in London, set up by the Methodist minister Leslie Weatherhead, and the Guild of Pastoral Psychology established in 1937 to promote the work of Jung.

Following the Second World War, therapeutic and empirical approaches to psychological understanding of religion developed slowly in Britain, limited by the slow growth in number and size of university psychology departments. As an example of therapeutic approaches, the Leeds-based Methodist minister and psychotherapist Harry Guntrip was concerned to communicate psychological thinking to ministers through his Psychology for Ministers and Social Workers (1949). The Oxford-based Michael Argyle, better known as a social psychologist, charted the research field as it was in the mid-1950s in his foundational book Religious Behaviour (1958), continuing up to his last book Psychology of Religion: An Introduction (2000), which offers an informed and balanced overview.

The subject undoubtedly languished academically in Britain until a revival of interest, usually dated from the mid-1970s (Francis, 1978). This renewed interest in the psychology of religion has been characterised by new thinking and research that both addresses the methodological complexities in the field, and also pays attention to and draws from non-Western faith traditions, from both Africa and Asia. The developments in the scope of the field have been along two main paths: the academic study of the interface between psychology and religions, and pastoral psychology, or the role of psychology in the service of faith communities.

Religion under the spotlight of psychology
The range of academic work on the relationship between faith and psychology can be illustrated by the work of three research centres in England. The first of these is the Alister Hardy Research Centre for Religious Experience, founded in Oxford by the eminent zoologist Sir Alister Hardy in 1969 (and now located in Lampeter), carrying out, as the name indicates, studies of religious experience largely based on their extensive archive of personal experiential accounts.

The centre became the focus of a number of researchers, including the Australian Laurence Brown, who was Director for a formative period in the 1990s. Another set of studies stimulated by the centre was carried out by David Hay, leading to his Religious Experience Today (1990), and new work using the archives continues to be published.

Two major research centres applying psychological theories and methods within the framework of theological and church-related concerns were established in the 1990s. Fraser Watts’s research group at the University of Cambridge, the Psychology of Religion and Religious Research Group, is dedicated to exploring the interface between psychology and religion in theoretical, empirical and applied ways, through three subgroups. The Theology and Theory subgroup seeks to clarify the conceptual relationship between the two disciplines the Religious Cognition Research Laboratory conducts empirical research into religious cognition and the Cambridge Institute for Applied Psychology and Religion relates psychological research to educational programmes. Examples of the published work of these groups are Jesus and Psychology (Watts, 2007), concerning the connection between psychology and the Jesus of the Gospels, and an examination of the major themes linking psychology and Christian ministry in Psychology of a Christian Ministry (Watts et al., 2002).

Leslie Francis’s research group, established at the University of Wales and recently transferred to the University of Warwick, has framed the psychology of religion within the context of empirical theology. This research group has focused on five main themes: clarifying the relationship between theology and psychology employing psychological theory within the context of biblical hermeneutics drawing on personality psychology to illuminate areas of congregational life and aspects of ministry (including clergy work-related psychological health and burnout) exploring individual differences in the attitudes and beliefs of clergy, churchgoers and church-leavers and examining the association between religion and values among young people. Examples of their work on the connections between theology and psychology, and between hermeneutics and psychology, are displayed in Faith and Psychology (Francis, 2005) and Preaching with All Our Souls (Francis & Village, 2008).

Psychology in the service of faith communities
There are a number of ways in which these insights have been applied to support the ministry of churches and local faith communities. A distinctive approach to counselling within a Christian context was founded in 1962 by the psychiatrist Frank Lake under the title of the Clinical Theology Association. This movement was among the first to organise training seminars for both ordained ministers and lay people, and was followed by other organisations, such as the Westminster Pastoral Foundation, offering professional training for counsellors. Many ordination training courses now include pastoral psychology within basic training. Psychologists within faith traditions have set up their own interest groups, such as the British Association of Christians in Psychology. There now many examples of psychologists and psychological therapists, some of whom are also ordained ministers of religion, offering educational and training opportunities, as well as informal support, to local faith congregations, in for example applying insights from social psychology in resolving conflict within congregations (see Savage & Boyd-Macmillan, 2010).

Conclusion
Within the past 30 years there has been a resurgence of interest in Britain in the range of relationships between psychology and religion. Much of this growth can be attributed to the emergence of a number of individuals who are both psychologically and theologically trained and who have sustained innovative research and educational programmes – such as the Godly Play initiative to develop spirituality in children (see www.godlyplay.org.uk) – and the diffusion of this understanding through an expanding range of publications and learning opportunities.

Box 1: ‘Us’ and ‘them’
While open to some methodological criticism (e.g. Mavor et al., 2011), the work of Altemeyer and Hunsberger (e.g. 1992) on religious fundamentalism has had considerable influence. One suggestion that seems to warrant reflection from both theological and psychological viewpoints is that of what Bob Altemeyer (2003) calls ‘religious ethnocentrism’.

In coming to committed belief, and to committed membership of a community of belief, there is a risk that I will learn to make ‘us-and-them’ judgements that exclude all others who do not share my belief. Altemeyer, looking at early patterns of learning and levels of scores on measure of fundamentalism, notes that ‘Religious fundamentalists tend to have a very small “us” and quite a large “them” when it comes to faith.’

How to enable people to acquire beliefs and values on which to base their lives, without at the same time being trained in religious ethnocentrism, calls for further debate between religion and psychology. Given the depth of commitment characteristic of many of the founding figures of psychology, it is no surprise that psychology, too, has its own communities of belief, fundamentalisms, and even its own ethnocentrisms. Dialogue promises to be fruitful – and far from dull.

John Hall is at the School of Health Care, and at the Centre for Health, Medicine and Society, at Oxford Brookes University [email protected]

Leslie Francis is at the Warwick Religions and Education Research Unit, University of Warwick and is Canon Theologian at Bangor Cathedral, Wales [email protected] .

Brendan Callaghan SJ is Master of Campion Hall, University of Oxford [email protected]


Are there any introductory books about the relationship between art and psychology/cognition? - Psychology

The following is a guest post by Sarah Rainer, PsyD. This week, LifeWay Research published new research on mental illness and the church. Research shows that pastors largely feel unequipped to address mental illness, and that mental illness is still "taboo" in many ways.

She has a doctorate in Clinical Psychology and specializes in working with children, adolescents, and families. She desires to increase awareness and psychoeducation regarding mental illness to the Christian community. Sarah is the wife of Art Rainer and has two sons, Nathaniel and Joshua.

Sarah has thought deeply on these issues and I think her thoughts are worth your time.

Secular psychologists operate on a biopsychosocial model of human development and behavior. This model proposes humans develop and operate according to biological, psychological, and social influences. Accordingly, we are products of our biology and environment, both bearing equal importance.

In more recent years, psychologists have begun recognizing that our spirituality impacts our lives, but have yet to say it is imperative for life. While the traditional psychological theories and models that are based upon naturalism are insufficient from a Christian worldview, not all of secular psychology is wrong. Indeed, there are many helpful and positive aspects of psychology to consider, which is why there is a need for integration.

The successful integration of psychology and Christianity has long been a passion of mine. However, I tread carefully on this topic. As a secularly trained doctor, I recognize my shortcomings in relation to the integration of theology and psychology. The nuances of the Biblical Counseling, Integrationist, and Christian Psychology models have been extensively evaluated by more notable minds than mine.

I will not speak to any one particular model, but provide key points to consider when integrating psychology and Christianity. These points, I believe, fall on the continuum between the Integrationist and Christian Psychology models.

1. Scripture and the Gospel are prominent.

The belief and use of Scripture and the Gospel are perhaps the most prevalent differences between the secular and Christian psychology worlds.

For Christian psychologists, our worldview must be determined by Scripture. Not only should we see our clients as individuals in need of Jesus Christ, but our understanding of mental illness and disorder should also be based upon a Gospel-oriented worldview. As a result, our therapeutic practice will utilize Scripture to heal our clients and glorify Jesus.

2. Operating on a middle ground.

As a trained secular doctor, I appreciate the biopsychosocial model of human nature. Learning about the complexities of humanity provides me with a better framework for understanding and helping my clients. The intricacies of the human brain, the environmental influences on our personality, and the social and culture impact on our lives remind me that pathology cannot simply be reduced to issues of morality or sin.

On the other hand, as a Christian, I acknowledge that all humans are inherently separated from God. This separation causes disorder, sin, and disease of every kind. However, we serve a loving and just God that provides a way out of our depraved state through Jesus Christ. He longs for us to seek Him and His promise of eternity.

Due to the love of this God, I also cannot reduce all pathology to a naturalistic model of humanity. I propose that Christian mental health professionals operate on a middle ground, the bio/psycho/social/spiritual model, which considers both our dignity and depravity as humans.

3. Secular techniques can be helpful.

The use of some secular therapy interventions is not inherently wrong the overreliance and/or independent use of these techniques is. Research and personal testimonies reveal that secular interventions are successful in the abatement of symptoms. However, the independent use of these secular techniques falls short because they simply produce a &ldquosymptom free&rdquo individual.

The end result does not provide dependence on the Lord, salvation, or sanctification. The result is nothing more than freedom from current symptoms, yet there is continued bondage to sin. The underlying cause of pathology (separation from God) has not been addressed. Therefore, we cannot eliminate the Gospel from therapy. We also cannot discard all secular techniques.

The elimination of research-based interventions from therapeutic practice would be a disservice to our clients. Not providing clients with skills that may help alleviate their psychological distress is also not good stewardship of our knowledge.

Helping a child with Attention-Deficit/Hyperactivity Disorder organize their school supplies, explaining and modeling the appropriate use of time-out to parents, challenging negative thoughts, and teaching diaphragmatic breathing, are some examples of secular techniques that do not challenge Scripture-based psychology. As Christian psychologists, we should teach, provide, preach, and pray, just like Jesus.

4. Research can be appreciated.

Secular research has a lot to offer in understanding mental illness. Christian psychologists should cautiously embrace this research. Comprehending the biological, social, and psychological underpinnings of mental illness can create in us great empathy for our clients.

The more knowledge we obtain the more we can adequately help others. Contrastingly, we must also recognize that not all secular research is congruent with Christianity. When research and Christianity contradict each other, we follow the latter.

5. Seek to make a difference outside the therapeutic relationship.

Most psychologists and therapists will have ample opportunities to make differences, exalt Jesus, and create changes within the context of their therapeutic relationships. Although these are wonderful, our influence should not stop there.

Christian psychologists should seek opportunities to change our communities, schools, coworkers, institutions, research, and the whole psychology world. Our influence should move beyond the walls of a therapy room to infiltrate different levels within our field. Jesus went to the world, and so should we.


CREATIVITY

Creativity is the ability to generate, create, or discover new ideas, solutions, and possibilities. Very creative people often have intense knowledge about something, work on it for years, look at novel solutions, seek out the advice and help of other experts, and take risks. Although creativity is often associated with the arts, it is actually a vital form of intelligence that drives people in many disciplines to discover something new. Creativity can be found in every area of life, from the way you decorate your residence to a new way of understanding how a cell works.

Creativity is often assessed as a function of one’s ability to engage in divergent thinking . Divergent thinking can be described as thinking “outside the box” it allows an individual to arrive at unique, multiple solutions to a given problem. In contrast, convergent thinking describes the ability to provide a correct or well-established answer or solution to a problem (Cropley, 2006 Gilford, 1967)


Artificial cognition: How experimental psychology can help generate explainable artificial intelligence

Artificial intelligence powered by deep neural networks has reached a level of complexity where it can be difficult or impossible to express how a model makes its decisions. This black-box problem is especially concerning when the model makes decisions with consequences for human well-being. In response, an emerging field called explainable artificial intelligence (XAI) aims to increase the interpretability, fairness, and transparency of machine learning. In this paper, we describe how cognitive psychologists can make contributions to XAI. The human mind is also a black box, and cognitive psychologists have over 150 years of experience modeling it through experimentation. We ought to translate the methods and rigor of cognitive psychology to the study of artificial black boxes in the service of explainability. We provide a review of XAI for psychologists, arguing that current methods possess a blind spot that can be complemented by the experimental cognitive tradition. We also provide a framework for research in XAI, highlight exemplary cases of experimentation within XAI inspired by psychological science, and provide a tutorial on experimenting with machines. We end by noting the advantages of an experimental approach and invite other psychologists to conduct research in this exciting new field.

This is a preview of subscription content, access via your institution.


Psychology and the Law, Overview

Roy S. Malpass , Jane Goodman-Delahunty , in Encyclopedia of Applied Psychology , 2004

1 Introduction

If experimental psychology is to enter into its period of practical service, it cannot be a question of simply using the ready-made results for ends which were not in view during the experiments. What is needed is to adjust research to the practical problems themselves and thus, for instance, when education is in question, to start psychological experiments directly from educational problems. Applied Psychology will then become an independent experimental science which stands related to the ordinary experimental psychology as engineering to physics.

The time for such Applied Psychology is surely near, and work has been started from most various sides. Those fields of practical life which come first in question may be said to be education, medicine, art, economics and law.

This bit of advocacy was written by Hugo Muensterberg in 1907, and makes clear that both the vision and the empirical research program on which the field is founded were present a century ago. Research at the time, and much of the work since, has taken place in the areas of perception and memory, as well as abilities, intellectual performance and social relations, areas in the list of problems related by Muensterberg. All of these areas are treated in the present section of this encyclopedia, and while they would all be recognized by turn-of-the-19th-century psychologists, their elaboration since that time has been considerable. Legal psychology has grown in many ways, and has multiple foci.


Psychology is the Key

Psychology is key to understanding the implications of technology. Consequently, it seems like it should be pretty straightforward to define media psychology. For some reason, though, it’s not. I have had discussions with colleagues for hours (or at least it seems like it) about what constitutes media, mediated communication, and technology and what we mean by psychology in the context of media—and we’re not even philosophers. In this and the following two posts, I will discuss my definition of media psychology and why I think media psychology is so important.

Both media and psychology have made major contributions to western culture throughout the 20th century. Can you imagine The New Yorker without Freudian references or Jason Bourne without operant conditioning? The term “media,” however, used to be confinable to a bucket labeled “mass media.” Our awareness of media, however, has reached the collective consciousness, as if we all woke up yesterday, awakened by our programmable alarm with the iPod attachment, and over our coffee made automatically by our coffeemaker, checked our blackberry for emails and headline news and then looked up shocked to see that our kids are doing much the same. This awareness is leaving people clamoring for a new level of understanding. There is an infiltration of media applications and information technologies into nearly every aspect of our lives. What does it all MEAN? Just like Mighty Mouse (or maybe Underdog), media psychology emerged in a time of need.

The goal of media psychologists is to try to answer those questions by combining an understanding of human behavior, cognition, and emotions with an equal understanding of media technologies. Unlike some types of media studies, media psychology is not just concerned with content. Media psychology looks at the whole system. There is no beginning and no end. It is a continual loop including the technology developer, content producer, content perceptions, and user response. Just as Bandera describes social cognitive theory as the reciprocal action between environment, behavior, and cognition, so does media psychology evaluate the interactive process of the system. There is no chicken, no egg to this system. They all coexist and coevolve with each other.

There is no consensus among academicians and practitioners as to the scope of media psychology. This is because the field must be representative of not only the work currently being done but also the work that needs to be done. This is a field that changes every time iTunes releases a new mobile app or a new social media platform appears.

The interests of the person doing the defining often drive definitions of a field. However, the fact that both ‘media’ and ‘psychology’ are themselves broad and prone to misconception contributes to the definitional confusion. In spite of our awareness of media everywhere, when someone mentions media the metaphor we fall back on is often mass media. It’s a field where you must continually define your terms. Does ‘media’ mean television or does ‘media’ include computer interfaces that facilitate information management and distribution?

The same heuristics impact the popular perception of the field of psychology. There is a wide world of psychology beyond the narrow view of clinical applications that evoke images of Freud and talk therapy. So it wasn’t surprising in the early days of the field, when media psychology was perceived as a psychologist appearing in the media, such as the radio shrink for many years Dr. Toni Grant or the infamous Dr. Phil. This view of media psychology also has links to the origins of the first division (46) for Media Psychology of the American Psychological Association (APA). Due to the prevalence of mass media relative to other media technologies, it was home to several psychologists with media platforms or who regularly appeared in the media as experts. The initial emphasis in Division 46 was on training psychologists to effectively appear in the media, how to deliver psychological information over the media, the ethical limitations of doing therapy using media, and as a watchdog for the accurate portrayal of psychologists in the media far outweighed the emphasis on research looking at media use and development.

Those early perceptions have evolved as technology use has become more ubiquitous. From social media and mobile apps to big data, there is an increasing awareness of the importance of understanding how media impacts society and how society, in turn, impact media and technology use and development. Reflecting this shift, the APA Division 46 has taken a new name and is now the Society for Media Psychology & Technology.

There is a significant cross-disciplinary aspect of media psychology. Not all people working in media psychology are psychologists. In fact, much of the early work came from marketing and advertising and the bulk of the research in media psychology has been published in academic and applied disciplines beyond psychology, such as sociology, communications, anthropology, media studies, education, computer, and information sciences, as well as business management and marketing. What has often been challenging is the lack of intellectual cross-pollination. Media psychology seeks to address that by bringing together all these approaches and vocabularies with the recognition that communication, cognition, and emotions are fundamental to human experience and therefore have, by definition, foundations in psychological thought.


Book Notes: “The Psychology of Money” by Morgan Housel

The Psychology of Money by Morgan Housel (2020) examines personal finance through the lens of human behavior. It’s a fresh take on a well-trod subject many personal finance books focus on exogenous considerations: e.g. how the stock market works, how to select stocks or build a portfolio, how to time the market, etc. Housel’s focus is the relationship between people and money—with particular emphasis on the human variable of the equation. “To grasp why people bury themselves in debt you don’t need to study interest rates you need to study the history of greed, insecurity, and optimism.”

Housel’s conviction is that behavior trumps other considerations in the pursuit of financial success. “Doing well with money has a little to do with how smart you are and a lot to do with how you behave.” Engage in the right behaviors and you are likely to succeed. Similarly, no amount of intelligence, savvy, or inside information will save you from the wrong set of behaviors.

Each of the first 18 chapters in the book explores an individual human behavior or attitude towards money (the final two chapters are a summary of the lessons and a commentary on Housel’s personal financial practices). Certain behaviors induce positive outcomes while others guarantee failure. For instance, the first chapter titled “No One’s Crazy” considers the limits of our understanding vis-à-vis the limits of our personal experiences. Consider that we are all, in the grander scheme of things, woefully inexperienced. “Your personal experiences with money make up maybe 0.00000000001% of what’s happened in the world, but maybe 80% of how you think the world works.” In other words, there’s a huge gap between firsthand knowledge and how we parlay those limited insights into making sense of the world. Our experiences color our judgment, but the foundations of that judgement are dubious, incomplete, and full of blind spots.

For example, consider two different people born in different decades and their attitudes towards the stock market, one born in the 1950s and the other in the 1970s. The first individual, as a teenager and young adult would have witnessed the anemic stock market returns of the 1960s-70s (low single digit returns in the decade aggregate). The second individual, as an adolescent and young adult, would have watched the double-digit returns for both the 1980s and 1990s (see this article for a graph showing decade-by-decade stock market returns). The latter is more likely to enter adulthood with a bullish attitude towards equities. The former is likely skeptical of the stock market having witnessed two decades of negligible returns. The lesson: you cannot discount the impact of personal experience on your decision-making process (nor can you discount the unique set of circumstances that influence the decisions made by others).

Housel’s book is filled with these sorts of lessons. Some lessons caution us against certain behaviors, other lessons encourage us to embrace beneficial habits. The beauty of these lessons is that they are accessible to anyone: they are not the sole domain of high-income earners or those with elite education degrees. Reading this book won’t give you a profound knowledge about investment instruments, asset allocation, or tax-advantaged strategies it will, however, improve your relationship with money and your attitude regarding personal finance. It isn’t difficult, Housel assures us, financial wealth just requires discipline, patience, and a handful of constructive behaviors.

Note: For those interested in an abbreviated version of Housel’s book, check out an article he wrote in 2018 with the same title: “The Psychology of Money” (collaborativefund.com). The book expands upon the ideas introduced in the 2018 article but you can get a good taste of his ideas there.

Pros: Could become a classic in the personal finance space. Strong focus on individual attitudes and behaviors (which are within the reader’s locus of control). Ideas and themes have broad application beyond personal finance.

Cons: People looking for advice on specific financial instruments, strategies, and the like will be disappointed (his primary strategy is save and hold and let compounding work its magic). Housel’s clear, breezy style sometimes belies the profundity of his ideas.

Verdict: 8/10

Highlights

Introduction: The Greatest Show on Earth

“The premise of this book is that doing well with money has a little to do with how smart you are and a lot to do with how you behave.”

“A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.”

  • Ronald James Read: Gas station attendant, janitor and American philanthropist. Read saved throughout his life, lived frugally and amassed an $8 million net worth at time of death. The majority of his fortune was left to a local hospital and library.
  • Richard Fuscone: Harvard-educated Merrill Lynch executive. Borrowed heavily and spent lavishly, got hit by the 2008 financial crisis, declared bankruptcy.
  • “Ronald Read was patient Richard Fuscone was greedy. That’s all it took to eclipse the massive education and experience gap between the two.”

Two explanations that explain existence of stories like Read and Fuscone:

  1. “Financial outcomes are driven by luck, independent of intelligence and effort.” (true to some extent)
  2. “Financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know.” (Housel believes this is the more common of the two explanations).

Knowing how to do something is insufficient. In many situations you also need to battle against your internal emotional and mental turmoil as well which will influence or alter your planned response.

“We think about and are taught about money in ways that are too much like physics (with rules and laws) and note enough like psychology (with emotions and nuance).”

“To grasp why people bury themselves in debt you don’t need to study interest rates you need to study the history of greed, insecurity, and optimism.”

Chapter 1: No One’s Crazy

Everyone has a unique idea of how the world works. This worldview is influence by a unique set of circumstances, values, and external influences.

“Your personal experiences with money make up maybe 0.00000000001% of what’s happened in the world, but maybe 80% of how you think the world works.”

“No amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty.”

“We all think we know how the world works. But we’ve all only experienced a tiny sliver of it.”

  • If you were born in 1950, the stock market was flat during your teens and 20s (adjusted for inflation).
  • If you were born in 1970, the S&P 500 increased 1000% during your teens and 20s (adjusted for inflation).
  • Which generation is more likely to have a bullish view of the stock market?

“Their view of money was formed in different worlds. And when that’s the case, a view about money that one group of people think is outrageous can make perfect sense to another.”

Consider people most likely to purchase lottery tickets in the U.S.: low-income households who spend, on average $400/year. Number seems crazy to people in higher income households. But some might justify the purchase by saying they are paying for hope and a dream. Without being in their shoes, it’s hard to fully appreciate why they behave the way they do.

Modern financial planning is relatively new. For instance, individual retirement accounts are a recent phenomenon. 401k were created in 1978. Roth IRA was created in 1998. Index funds were developed in the 1970s.

As Housel says, many of the poor financial decisions stem from our collective inexperience: “there is not decades of accumulated experience. we’re winging it.”

Chapter 2: Luck & Risk

Outcomes are determined by more than effort. Luck and risk often figure prominently in individual outcomes.

Story of Bill Gates: Gates attended one of the only high schools in the world that had a computer in 1968. Were it not for the efforts of a teacher, Bill Dougall, to procure a $3000 teletype computer, it is unlikely that Bill Gates would enjoyed the same career success.

  • Gates himself admits as much: “If there had been no Lakeside [High School], there would have been no Microsoft.”
  • At Lakeside there were three standout computer students (all friends): Bill Gates, Paul Allen, and Kent Evans. Kent Evans was destined for success but met an untimely death in a mountaineering accident before graduation. This is used as an example of bad luck.

“Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. they both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.”

“The accidental impact of actions outside of your control can be more consequential than the ones you consciously take.”

“Focus less on specific individuals and case studies and more on broad patterns.”

  • Extreme outcomes are low probability outcomes. Applying the lessons of those who achieved these outlier results isn’t always helpful since external forces of luck and risk may have played immeasurable and non replicable roles.
  • Instead look at broad patterns that offer directional insights. For instance, happy people tend to be those who control their time and energy.

Chapter 3: Never Enough

Story about writers Kurt Vonnegut and Joseph Heller (Catch-22) attending a party hosted by a billionaire. Vonnegut remarks that the billionaire makes more money in a single day than Heller made from his popular novel. Heller responds: “Yes, but I have something he will never have. enough.”

Examples of Rajat Gupta and Bernie Madoff: People who had everything but wanted more. They brought ruin upon themselves because the were greedy and didn’t know when to stop.

“There is no reason to risk what you have and need for what you don’t have and don’t need.”

  • “The hardest financial skill is getting the goalpost to stop moving.”
  • Comparing ourselves to others is often the culprit. Capitalism is good at generating both wealth and envy. But social comparison is a process without end: there’s always someone higher up on the ladder.
  • Enough doesn’t mean you have to go without. Enough means you know when to avoid doing something you will regret.
  • Many things are not worth the risk, regardless of the gains. A short list: reputation, freedom, family and friends, love, happiness.

The only way to win is to refrain from playing the game.

Chapter 4: Confounding Compounding

  • The simplest fact about Warren Buffett’s fortune: He wasn’t just a good investor, he was a good investor for 75+ years.
  • “Effectively all of Warren Buffett’s financial success can be tied to the financial base he built in his pubescent years and the longevity he maintained in his geriatric years. His skill is investing, but his secret is time.”
  • “Good investing isn’t necessarily about earning the highest returns. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That’s when compounding runs wild.”

Chapter 5: Getting Wealthy vs. Staying Wealthy

There are many ways to get wealthy. There is one way to stay wealthy: through a combination of frugality and paranoia.

Getting money and keeping money entirely different things and require entirely different mindsets and strategies.

  • “Getting money requires taking risks, being optimistic and putting yourself out there.”
  • “Keeping money requires the opposite. it requires humility, and fear that what you’ve made can be taken away from you just as fast.”

Michael Moritz (venture capitalist): “We assume that tomorrow won’t be like yesterday. We can’t afford to rest on our laurels. We can’t be complacent. We can’t assume that yesterday’s success translates into tomorrow’s good fortune.”

Nassim Taleb: “Having an edge and surviving are two different things: the first requires the second. You need to avoid ruin. At all costs.”

Having a “survival mindset” requires three things:

  • Aim to be financially unbreakable: be able to stick out swings in the market and stay in the game long enough for compounding to work its magic.
  • The most important thing to plan for: the plan won’t go according to plan. A good plan leaves room for error. “The more you need specific elements of a plan to be true, the more fragile your financial plan becomes.”
  • Be optimistic about the future but paranoid about the obstacles to your success.

Chapter 6: Tails, You Win

Story of the art collector Heinz Berggruen. He amassed an amazing collection of Picassos, Braques, Klees and Matisses.

  • People were amazed by his art investing acumen.
  • The reality was that he bought massive quantities of art. Only a subset of his collection was valuable.
  • “Berggruen could be wrong most of the time and still end up stupendously right.”

“Anything that is huge, profitable, famous, or influential is the result of a tail-event—an outlying one-in-thousands or millions event.”

This is the venture capital model: If a fund makes 100 investments, they expect 80% to fail, a handful to do reasonably well and 1-2 to drive the funds returns.

Consider the distribution of winners and losers in the stock market: most public companies fail, a few do ok and a few generate extraordinary returns.

“When you accept that tails drive everything in business, investing, and finance you realize that it’s normal for lots of things to go wrong, break, fail, and fall.”

Warren Buffett stated at the 2013 Berkshire Hathaway shareholder meeting that he’s owned shares in 400-500 different companies over his life. His significant gains came from just a handful: 10.

We see outsized results from a mere fraction of the events or actions in our lives.

Chapter 7: Freedom

  • “The ability to do what you want, when you want, with who you want, for as long as you want, is priceless.”
  • “Money’s greatest intrinsic value. is its ability to give you control over your time.”

Chapter 8: Man in the Car Paradox

  • “When you see someone driving a nice car, you rarely think, ‘Wow, the guy driving that car is cool.’ Instead, you think, ‘Wow, if I had that car people would think I’m cool.’ Subconscious or not, this is how people think.”
  • In other words, when we signal that we’re wealthy and that people should like an admire us, what really happens is people ignore the person in possession of of the object of envy and just focus on the possession.

Chapter 9: Wealth Is What You Don’t See

“Someone driving a $100,000 car might be wealthy. But the only data point you have about their wealth is that they have $100,000 less than they did before they bought the car.”

“Wealth is financial assets that haven’t yet been converted into the stuff you see.”

Housel reminds us that when people say they want to be millionaires, what it really means is that they want to spend a million dollars.

Spending a million dollars is “literally the opposite of being a millionaire.”

Difference between wealthy and rich:

  • People who live in big homes and drive fancy cars are rich. People with big incomes are rich. They display the fact that they are rich.
  • Wealth is hidden. Wealth is income that is saved, not spent. Wealth is optionality, flexibility and growth. Wealth is the ability to purchase stuff if you needed to.

Chapter 10: Save Money

Three types of people (past a certain level of income):

  • Those who save.
  • Those who don’t think they can save.
  • Those who don’t think they need to save.

Your savings rate is more important than your income or investment returns.

Analogy: The 1970s oil crisis.

  • Problem: Oil supply was insufficient to keep up with demand and economic growth.
  • Solution: Oil supply increased 65% but fuel efficiency and conservation doubled what could be done with that energy.
  • Supply side was out of people’s control but the demand side was completely within the control of the individual.

“You can build wealth without a high income, but have no chance of building wealth without a high savings rate, it’s clear which one matters more.”

“Learning to be happy with less money creates a gap between what you have and what you want—similar to the gap you get from growing your paycheck, but easier and more in your control.”

“Past a certain level of income, what you need is just what sits below your ego.” Solution: Don’t worry about what other people think or feel the need to keep up with the Joneses.

“The flexibility and control over your time is an unseen return on wealth.”

“Having more control over your time and options is becoming one of the most valuable currencies in the world.”

Chapter 11: Reasonable > Rational

  • “Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run, which is what matters most when managing money.”
  • Historical odds of making money increase over time. Lesson: stick to your guns and don’t let short-term volatility force a bad decision. Example: Positive returns over a one-year period are 68% likely, 88% likely over 10 years, and 100% likely over 20 years.

Chapter 12: Surprise!

Scott Sagan (political scientist): “Things that have never happened before happen all the time.”

“History helps us calibrate our expectations, study where people tend to go wrong, and offers a rough guide of what tends to work. But it is not, in any way, a map of the future.”

Remember: Past performance is not an indicative of future results, as the ubiquitous financial disclaimer states.

Focusing on past history and past patterns may cause two things:

Overlooking outlier events that move the needle.

  • Example: 15 billion people were born in the 19th and 20th centuries. But consider the handful that inordinately influenced historical events: Hitler, Stalin, Mao, Edison, Gates, MLK, etc.
  • Example: Consider the projects, events and innovations of the last century: The Great Depression, WW2, Vaccines, Antibiotics, the Internet, the fall of the Soviet Union.
  • Certain people and events have influence that is orders of magnitude more than others. Housel calls these “tail events.”
  • Tail events cause 2nd and 3rd order repercussions. “It is easy to underestimate how things compound. for example, 9/11 prompted the Federal Reserve to cut interest rates, which helped drive the housing bubble, which led to the financial crisis, which led to a poor jobs market, which led tens of millions to seek a college education, which led to $1.6 trillion in student loans with a 10.8% default rate. It’s not intuitive to link 19 hijackers to the current weight of student loans. ”
  • “The majority of what’s happening at any given moment in the global economy can be tied back to a handful of past events that were nearly impossible to predict.”
  • These surprise events are nearly impossible to predict because they are so improbable and depend on the luck and occurrence of many similarly unlikely precursor events.
  • “This is not a failure of analysis. It’s a failure of imagination.” It is difficult to imagine a future that looks nothing like today or anything we have seen before.
  • Daniel Kahneman (psychologist and economist): “The correct lesson to learn from surprises: that the world is surprising.”
  • Similarly we should be skeptical of those who profess to know with great certainty how the future will unfold.

Misreading the present by looking to the past because the past DOESN’T account for the structural changes that are relevant in today’s world.

  • Example: Certain financial mechanisms are new. Advice that predates these realities is obsolete. For instance: 401ks appeared in 1978. Venture capital barely existed 25 years ago. The S&P 500 did not include financial stocks until 1976.
  • Recent history is the most relevant to the future since it accounts for some of the important or relevant innovations and conditions that will impact the future.
  • “The further back in history you look, the more general your takeaways should be.”

Chapter 13: Room for Error

  • Blackjack and poker players know they are dealing with probabilities not certainties.
  • The best plan is to plan for things to not go according to plan.
  • Margin of safety—you can also call it room for error or redundancy—is the only effective way to safely navigate a world that is governed by odds, not certainties.”
  • “The odds are in your favor when playing Russian roulette. But the downside is not worth the potential upside. There is no margin of safety that can compensate for the risk.”
  • It is impossible to prepare for or anticipate what you cannot envision.
  • Minimize the impact of failure by avoiding single points of failure.
  • “The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.”
  • Rainy-day funds are a good idea: save for things you cannot anticipate or predict.

Chapter 14: You’ll Change

  • We are terrible predictors of our future selves. Our present needs, wants, and reams are not the same as our future needs, wants, and dreams.
  • The End of History Illusion is what psychologists call the tendency for people to be keenly aware of how much they’ve changed in the past, but to underestimate how much their personalities, desires, and goals are likely to change in the future.”
  • The result is that long-term plans and decision-making is very difficult to do effectively.
  • Accept the reality that individuals are prone to change. What matters to you today, may be viewed as inconsequential in a decade.
  • Sunk costs—anchoring decisions to past efforts that can’t be refunded—are a devil in a world where people change over time. They make our future selves prisoners to our past, different, selves. It’s the equivalent of a stranger making major life decisions for you.”

Chapter 15: Nothing’s Free

  • “The key to a lot of things with money is just figuring out what that price is and being willing to pay it.”
  • “Successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them in real time.”
  • “Few investors have the disposition to say, ‘I’m actually fine if I lose 20% of my money. but if you view volatility as a fee, things look different.”
  • When you invest in the long term, you need to be willing to accept the short-term price of market fluctuations.

Chapter 16: You & Me

  • One reason for market bubbles: “Investors often innocently take cues from other investors who are playing a different game than they are.”
  • Short term momentum attracts investors with short time horizons. “Bubbles aren’t so much about valuations rising. That’s just a symptom of something else: time horizons shrinking as more short-term traders enter the playing field.” But note that the short-term investors will only stick around so long as the momentum continues, but that this momentum is transient.
  • “Bubbles do their damage when long-term investors playing one game start taking their cues from those short-term traders playing another.”
  • “It’s hard to grasp that other investors have different goals than we do, because an anchor of psychology is not realizing that rational people can see the world through a different lens than your own.”

Chapter 17: The Seduction of Pessimism

“Pessimism isn’t just more common than optimism. It also sounds smarter. It’s intellectually captivating, and it’s paid more attention than optimism, which is often viewed as being oblivious to risk.”

“Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Tell someone they’re in danger and you have their undivided attention.”

Daniel Kahneman: “This asymmetry between the power of positive and negative expectations or experiences has an evolutionary history. Organisms treat threats as more urgent than opportunities have a better chance to survive and reproduce.”

“Pessimists often extrapolate present trends without accounting for how markets adapt.”

  • Remember the story from chapter 10 about the 1970s oil crisis: pundits failed to account for innovation in fuel efficiency and cheaper, more efficient oil extraction.
  • Similarly, in the 2000s, as oil prices increased, certain type of oil extraction became economically feasible such as fracking.

Necessity is the mother of all invention and humanity is endlessly innovative. People respond to adversity and problems with new and novel solutions.

“Threats incentivize solutions in equal magnitude. That’s a common plot of economic history that is too easily forgotten by pessimists who forecast in straight lines.”

Progress is slow, but setbacks and disaster happens quickly and impactfully. “There are lots of overnight tragedies. There are rarely overnight miracles.”

“Growth is driven by compounding, which always takes time. Destruction is driven by single points of failure, which can happen in seconds, and loss of confidence, which can happen in an instance.”

Chapter 18: When You’ll Believe Anything

“The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true.”

“Everyone has an incomplete view of the world. But we form a complete narrative to fill in the gaps.”

B.H. Liddell Hart (historian) in his book “Why Don’t We Learn from History?”: “History cannot be interpreted without hte aid of imagination and intuition. The sheer quantity of evidence is so overwhelming that selection is inevitable. Where there is selection there is art. Those who read history tend to look for what proves them right and confirms their personal opinions.”

Daniel Kahneman: “Hindsight, the ability to explain the past, gives us the illusion that the world is understandable. It gives us the illusion that the world makes sense, even when it doesn’t make sense. That’s a big deal in producing mistakes in many fields.”

Rather than accept that we don’t know something we actively attempt to develop personal theories (stories) that creates illusory understanding that is psychologically comforting. Illusion of control vs. the reality of uncertainty.

Recognize that there is much you do not know and much that is outside of your control.

Philip Tetlock (psychologist): “We need to believe we live in a predictable, controllable world, so we turn to authoritative-sounding people who promise to satisfy that need.”

Kahneman identified relevant errors in cognition:

  • When planning we focus on what we want to do and can do and neglect the plans, actions, and decisions of others who might impact our personal outcomes.
  • When studying the past and forecasting the future we overemphasize individual skill and discount luck.
  • We focus on what we know and ignore what we don’t know. This results in overconfidence.

Chapter 19: All Together Now

  • Chapter is a summary of the lessons in the preceding chapters: humility, less ego, wealth vs. riches, financial decisions that offer peace of mind, use the power of time and consistency, accept failure and risk, strive for time freedom, frugality, make saving a core habit, be prepared to pay the price required for successful outcomes, prepare a margin of safety, avoid extremes, define the game you’re playing.

Chapter 20: Confessions

This chapter highlights some of the financial behaviors and beliefs of the author:

  • Independence drives all Housel’s financial decisions.
  • Live below your means.
  • Derive pleasure from free or low cost activities: exercise, reading, podcasts, learning.
  • Owns his house without a mortgage. Admits that this is a terrible financial decision but a great money decision (peace of mind).
  • Maintains 20% of his assets in cash (outside of the value of his primary home). He does this to maintain a safety net and to avoid being forced to sell his stock market investments in an emergency.
  • Charlie Munger: “The first rule of compounding is never interrupt it unnecessarily.”
  • No longer invests in individual stocks. All Housel’s stock market investments are in low-cost index funds.
  • “Some people can outperform the market averages—it’s just very hard, and harder than most people think.”
  • “Every investor should pick a strategy that has the highest odds of successfully meeting their goals. for most investors, dollar-cost averaging into a low-cost index fund will provide the highest odds of long-term success.”
  • Max out your retirement accounts and contribute to your kid’s 529 plans.
  • His financial situation is simple. All of his net worth consists of a house, a checking account and Vanguard index funds.

“One of my deeply held investing beliefs is that there is little correlation between investment effort and investment results.”

Three key elements of Housel’s approach: a high savings rate, patience, and long-term optimism.


September 2017

This fun, smart read for anyone eager to better understand (and improve) themselves argues that personality is driven not by nature nor nurture - but instead by the projects we pursue, which ultimately shape the people we become.

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