Richard Cox, Author

ALT Optimistic thinking has long been immortalized in self-help books as the key to happiness, good health and longevity but it can also lead to poor decision making, with particularly serious implications for people's financial wellbeing. Research from the University of Bath shows that excessive optimism is actually associated with lower cognitive skills such as verbal fluency, fluid reasoning, numerical reasoning, and memory. Whereas those high on cognitive ability tend to be both more realistic and pessimistic in their expectations about the future. "Forecasting the future with accuracy is difficult and for that reason we night expect those with low cognitive ability to make more errors in judgments, both pessimistic and optimistic. But the results are clear: low cognitive ability leads to more self- flattering biases - people essentially deluding themselves to a degree." said Dr Chris Dawson of the University's School of Management.