Understanding the Availability Bias in Money, Trends, and Life
Have you noticed how Nigerians call a certain category of products by one name, even when it’s not the brand name?
- Seasoning cubes => Maggi
- Toothpaste => Maclean
- Instant noodles => Indomie
- Detergent => Omo
Our mind grabs whatever example is the most familiar, most repeated, and easiest to recall, and treats it as the default. This mental shortcut is called the Availability Bias. Ask a Nigerian to name a telecommunication company, and they are far more likely to name MTN. Ask for the best artist in 2025, it’s either Davido or Wizkid. Not because they are the most talented or the absolute best, but because they are the most memorable and biggest artists. The mind confuses easy to remember with important, high-quality, true, safe, and highly recommended. Unfortunately, this isn’t always true.
In personal finance, that tiny human error can lead people into terrible financial decisions like bad investments, scams, fake opportunities that feel real, overpriced products, low-quality but popular products, and panic selling of investments. It’s important that you recognize this tendency in yourself so that you can make bulletproof decisions in your financial life.
Let’s look at a few examples of how this plays out in real life.
Brand Familiarity
The availability bias is why companies want to trend. They pay influencers, bloggers, sponsor events, and slap their logos everywhere. They run constant advertisements. In fact, the advertisements don’t have to do much. You might see ads where all they use is the name/logo of the brand and a buzzword. Then run it constantly to make the product a household name.
They want you to be familiar with them because once you start to see and hear their name and products everywhere: billboards, the internet, TV, radio, you start to think, “this product must be popular“, “A lot of people must be using it“, or “This product must be important“.
Temu and InDrive
When Temu and InDrive first launched in Nigeria, their ads were everywhere. They just wanted people to know they existed. People started to complain because Temu ads were so constant. In the end, it worked for them; they didn’t have to wait years to gain wide market adoption in Nigeria. Once people saw how popular these ads were, the shortcut thinking kicked in, and inspired trust in millions of Nigerians to try their products even before reviews came in. Even then, people still used Temu amidst scattered user complaints of some inferior products being shipped.
Popular brands outshine the less popular ones in our mind, even when, on occasion, the less popular brand may be more affordable or of better quality.
Investing In What’s Familiar
When it comes time to invest, people invest in whatever they’ve heard about online, without actually considering why they are investing in those things. People hear about stocks, treasury bills, MMFs, and bonds on finance Twitter, Telegram, or on YouTube and immediately buy them without considering if it’s the best option for their specific situation. Not considering age, asset allocation, risk tolerance, available free time for instrument research, and other long-term goals.
This is very common with equities: you often hear folks wanting to buy the stocks of the companies that they are familiar with, erroneously assuming that there is safety in that. Ask the average Nigerian to select five stocks, and they are likely to give you examples of companies that are easiest to remember in their mind, like MTN, GTB, FCMB, Dangote Cement, and Nestle PLC.
What is familiar is not always the best for your own specific situation. Investing in a popular company will not save you, since popular companies go bankrupt all the time, or get delisted from the stock market and their shares become worthless or diluted, or even bought out from shareholders at a lower price. Examples of popular companies on the NGX that got delisted are Starcomms, MRS, Skye Bank, Oceanic Bank, AG Leventies of Val-u Bread fame, Platinum-Habib Bank, and Diamond Bank.
On the world stage, bigger companies like Blockbuster, Lehman Brothers, Sears, RadioShack, and General Motors went bankrupt and got delisted from the stock exchange. Don’t make the mistake of assuming that your investments are secure because you picked a popular brand to invest in. Bankruptcies, debts, mismanagement, failure to meet regulators’ requirements, and fraud happen in some of these companies quietly. In fact, the company’s popularity even helps mask the red flag and doesn’t protect you from risk.
Chasing Hot Trends.
You’ve seen it on the news. Social media influencers are talking about it.
- The stock price rose 200% in the last X months
- Crypto is pumping
- AI coins are up
- CBEX is paying
And it’s vivid in your mind, so you decide to buy it. Not because you’ve done your research, but because it’s everywhere. It’s hot info, and you can’t afford to miss out, right?
Wrong.
MMM
Remember when the MMM Ponzi scam first came to Nigeria in 2016; it blew up. Everyone was talking about it. You get paid based on how many people you introduce to the scheme, a classic pyramid scheme. The fact that almost everyone else was using it, and no one else seemed to be stopping, made people feel a bit more secure. They think: “I’m not the only one using this thing. Everybody else is using it. It won’t stop before it gets to my turn. We’ve seen it with CBEX and all the other Ponzi schemes in Nigeria’s history. When everyone is talking about an investment, it builds familiarity, and familiarity builds trust.
The SEC and other individuals warned people about it, but their voices were drowned out by the louder voices hyping its profitability. For every quiet, rational warning, there were a hundred social-media-fueled testimonials of easy payouts. That’s the bias in action. Our brain is wired to notice what’s loud, repeated, and emotionally charged. The warnings were true, but weren’t available enough to compete.
If you are investing for the long run, the only thing that matters is the underlying strength of the business, not how loudly people talked about it last week. If people had studied MMM and CBEX, they would have seen that the business model doesn’t hold water. That’s how they end up buying speculative investments after hearing constant news about AI, crypto, NFT, and people getting rich overnight. But forget about the ones who were wiped out, rug pulled, because those are more silent than the ones who got rich overnight. So you assume your probability of winning is higher and get parted with your money.
Underestimating Common Risks
Emergency Fund
The downside of believing that things that are easy to remember are important is that when important things are not popular, we dismiss them. For instance, not having an emergency fund because you’ve never needed one before. You believe you don’t need one because things always work out for you one way or the other. You always find a way to borrow money from people, or you have someone to call. So you YOLO your money and neglect saving money, right? Until the day comes when you don’t have anyone to call except for yourself, and then you’re going to regret not having that emergency fund.
Inflation
People also underestimate inflation because price increases happen gradually. So you fail to feel the impact of that inflation until one day the price of everything has gone up, and your salary doesn’t cover your expenses anymore. Your savings have now lost value because you underestimated how important investing is to protect the value of your money.
Insurance
Another thing people underestimate is insurance, especially health insurance. They think they don’t need insurance because they just kind of feel like bad things are not going to happen to them- I rarely fall sick. But when a disaster wants to strike, it doesn’t give you a warning. It simply strikes. And you can’t be too prepared in a country like Nigeria, where healthcare is expensive. It’s better to stay ready, so you don’t have to get ready.
On the flip side, if you recently had a family member who was seriously ill and could not afford their expensive hospital bills, you might become more easily convinced of getting health insurance because of that very vivid example in your mind of the sick relative. The lesson here is that when planning and making life decisions about whether to get insurance, save, or invest, you can not hesitate merely because the consequences of not having these things (inflation, expensive health care, or emergencies) haven’t happened to you or someone you know before. Sometimes you just need to do your research, believe what you find and take action, even in the absence of personal examples you can point to.
Following the Herd
During a market crash, you see everyone else crashing out, lamenting the fact that the prices are down and selling their investments off. You panic too because everyone is doing it, and then you sell your investments and lock in your losses. If you picked the right investment, why panic sell? Is it because the news says it’s the biggest market crash the world has seen in years? When you are focused on the long-term instead of short-term fluctuations, there is no reason to follow the masses.
Japa
It’s the same with the Japa movement. Everyone is doing it, so I should do it.
We’ve heard so many extremely available success stories of people who have moved abroad, found a high-paying job, and are now sending money home, posting holiday photos, and buying properties.
What remains far less available are the stories of difficult logistics, the high living costs, the initial struggles, the isolation and racism in those countries, or the emotional toll of leaving home. So we have these sometimes exaggerated perceptions of a guaranteed return on investment of relocating, not considering whether it will work for you in your specific career, experience, and network of friends already living abroad. Have you asked if it makes sense for your age, finances, mental health, family, children, and spouse?
Lifestyle Inflation
People also succumb to lifestyle inflation because everyone else is doing it. Remember the BlackBerry era, where everyone kept trying to use the latest BlackBerry? There was Curve-1, Curve-2, Bold-1, Bold-2, etc. Even people who didn’t have money borrowed money just to get one. I mean, I knew someone who was scraping and saving every bit of money they could get from their friends, family, just to buy a Blackberry at that time. And he told me, “This BlackBerry everyone is using, I must use it with them.”
The same is happening in the iPhone era. But some of these people you think are the standard don’t even have savings or investments; they are just trying to blend in like you. The inverse is that no one talks about the guy who, instead of buying a phone, started a business or bought stocks; no one hypes those guys.
It’s the same instinct that makes you look at the people who are living flashy lives and assume they are rich. But the belief that you can detect a person’s wealth purely from their income or flashy belongings is false because actual wealth, savings, investments, and net worth are invisible.
Glamorous Career Paths
People also look at those who are in very glamorous careers like pro-athletes, Yahoo boys, music stars, and think, “These people are rich, I should be like that.” Well, should you? These are highly celebrated people in our society, and so your brain latches onto that and wants to be that.
But first and foremost, you can’t be a yahoo boy. That is a crime. That is not something you should even consider, no matter how flashy or pedestalized it is in society. No one tells you about thousands of people who lost all their time, energy, and savings because they were trying to pursue these highly sought-after careers, people who were pushed aside, people who went to prison, you know, because of the Yahoo thing.
You can’t just look at the end result and be like, Oh, this is what I want. You have to ask yourself if this is going to fit your situation. Do you have the talent? Do you have what it takes? Are you willing to risk prison? The point is, just because something is everywhere, glamorized, and easy to remember in society, doesn’t mean that it is worth pursuing.
Awoof Yakata
Betting and lottery companies use a version of this tactic to make you think that winning money when you bet is a common thing, when in reality, probably 1% of bettors win. They bombard Nigerians with ads telling them to prepare to win ₦100 million and show them images of people carrying big fake checks of the prize money. Even telecommunications companies do this. They tell you, buy airtime and win ₦50 million.
So you overestimate your chances of winning. The average Nigerian sees these constant ads and thinks winning is common: “Let me try. Maybe one day, I’ll win too.”
Gambling is a tax on people who don’t understand mathematics.
When the reality is that you will lose many times over before even winning a tiny sum, because it’s been rigged that way, statistically.
How To Defend Against The Availability Bias
This bias thrives on very vivid, easy-to-recall information being tagged as important. It’s a very human thing to believe, but the question then becomes: how do you defend against it, so you can make better decisions not just in your financial life, but in all other areas?
Awareness
Just being aware of this bias in yourself is a great first step. Whenever you try to make a decision based on information that seems commonplace, that means you have familiar data in front of you. You must actively seek out a counter version of that story– the unavailable data. Not necessarily because the counter version of it is always right, but because you want to be fully informed. So, for instance, if people are telling you that relocating to Canada is a good idea, go and seek out people who think that Canada is a bad idea, so you can weigh the pros and cons for yourself to see if this is good specifically for you.
Don’t Make Assumptions
This the third law from the book: The Four Agreements. You simply cannot assume that anything that is popular or trending or viral or has thousands of likes on social media is the truth. You cannot assume that it’s high quality, important, safe, or stable. Do your own research, whether it’s with investments, brands, or products. Work with verifiable data before you commit.
Diversify
Diversify your information sources. Do not take all of your information from one source. The more you diversify your information sources, the higher the likelihood that you’re going to get different points of view about the same thing. For instance, don’t read just one publication about money. Read different blogs, YouTube channels, or books about the topic. Get different points of view so that you can then make your own decision based on everything you’ve seen.
Utility
Ask if you’re paying for something or buying from a brand because it’s the best option, or if you’re paying for it because it’s popular. Explore lesser-known brands to check for quality, affordability, better customer service, and better value for money. You might be surprised by what you find.
Avoid Hype Content
Limit exposure to hype media. This is very common in the crypto industry. Whenever you hear hype from a particular advertisement or a TV channel, YouTube channel, or wherever, always take it with a grain of salt. Never believe hype until you’ve gathered enough data from diverse sources to confirm the hype.
Conclusion
If you’ve fallen for this bias in the past, you’re not alone. Our brains are wired for it. It feels logical. That’s what makes it so dangerous. Popular products have been found defective. The most available brands have gone bankrupt. The most hyped stocks and coins have gone to zero. The easiest to remember doesn’t always live up to its perceived pedestal.
Knowing what you know now, you must be mindful of how this shows up in your financial life: your spending, investments, career choices, and life decisions. Don’t be a sheep that follows the crowd. Be the black sheep who questions everything. Stay aware and protect yourself.
Have you fallen for this bias in the past?