I keep telling you that I’m a dumbass. However, my ability to recognize that I don’t know what the hell I’m talking about probably makes me more of an expert than most of the people on the internet. Basically, I know very little about investing money. Chances are, you know very little, too. That doesn’t keep us from talking about it as if we did know what in the hell we were doing.
Today, I want to share with you the story of the “smart” student. This is a story about that student you know from one of your past classes that “knew” everything already, loudly trumpeted that “fact,” and basically pissed everyone off while demonstrating a complete lack of mastery at every moment.
After this little story, I want to tell you how to be careful out there in the big bloggy world. Because the entire internet is made up of people that were once those students.
As a professional educator, I get to deal with these douche-bags every day. As a professional educator of educators, I also know a little about the psychology of these dudes’ thinking. (By the way, they’re almost always dudes, at least in the sciences. I don’t know why, and that’s not our topic. Women are probably just fundamentally smarter and less prone to wildly overestimating their own abilities for some reason.)
So, today we’ll look at Dunning-Kruger, or what pop psychologist Venkatesh Rao calls the Tragicomic Exasperation of Expertise. I want to put you on the look-out for thinking you know enough to evaluate a complicated financial play. In fact, once you start feeling dumb again, you know you’re on the path to enlightenment! Embrace your dumbness, because you’ll avoid doing stupid shit.
I also want to take the opportunity to kick peer-to-peer lending while its down, and hopefully tie the current mess Lending Club finds itself in to the personal finance blog world, Dunning-Kruger, and that annoying kid you knew from high school. Why do personal finance bloggers keep pumping up investing opportunities like Lending Club, Prosper, and PeerStreet when their actual expertise lies in software development and riding bikes?
Buckle up, because it’s going to be a wild ride. Continue reading Dunning-Kruger: Reading blogs doesn’t make you smart