Permanent Assumptions
.Permanent Assumptions
Jun 4, 2020 by Morgan Housel
If you were told in January what April would look like, you wouldn’t have believed it. If you were told in April that in May we’d face a nationwide protest so important it would crowd out almost all Covid-19 news, you wouldn’t have believed it.
How do you analyze the world when everything feels broken? And how do you even begin to make sense of the future when things change so fast? Humbly, is the answer. But humility doesn’t mean clueless.
Some things are always changing and can’t be known. There can also be a handful of things you have unshakable faith in – your permanent assumptions.
Realizing it’s not inconsistent to have no view about the future path of some things but unwavering views about the path of others is how you stay humble without giving up. And the good news when the world is a dark cloud of uncertainty is that those permanent assumptions tend to be what matter most over time.
15 Things To Stop Being Scared Of So You Can Be Rich, Happy, And Successful
.15 Things To Stop Being Scared Of So You Can Be Rich, Happy, And Successful
May 11, 2020 By Michelle Schroeder-Gardner
Being scared is a natural reaction, but a lot of good things can and will be scary.
Often, people are scared when things are changing, like if you’re starting a new job, getting married, or any other major life event. It’s only natural to be a little scared about how things will turn out.
You might be scared when you are trying to do something that is difficult, like paying off debt. What if it takes you longer than you had hoped? What about the sacrifices you will have to make?
Being scared happens when you do or try things that are new or outside of your comfort zone, and everyone feels scared from time to time. You may not believe that you cannot achieve what you are setting out to do.
But, you have to push through these negative moments and realize that you are holding yourself back if you want to start overcoming fear and let yourself move forward and do something new.
I have had a lot of fears to overcome to get where I am today. I was scared to quit my job to blog full-time. I was scared to move from our regular house to an RV. I was scared to move onto our sailboat.
Being scared is natural, but if I didn’t address my fears in a positive way, I wouldn’t be living the life I am today.
Everyone is scared of something. However, it’s how you approach that fear that really matters. If you hide from your fear then you may be holding yourself back.
This can then lead to regret later, which often feels worse than being scared.
Whether you are wanting to tackle your debt, you want to leave a job you hate, you want to travel the world, and so on, you need to overcome the fears associated with these goals to live and enjoy the life you want.
Five Lessons from History
.Five Lessons from History
May 29, 2019 by Morgan Housel
“The dead outnumber the living fourteen to one, and we ignore the accumulated experience of such a huge majority of mankind at our peril.” – Niall Ferguson on the lessons of history.
“History never repeats itself. Man always does.”– Voltaire
The most important lessons from history are the takeaways that are so broad they can apply to other fields, other eras, and other people. That’s where lessons have leverage and are most likely to apply to your own life.
But those things take some digging to find, often sitting layers below the main story.
The Great Depression began with a stock market crash. October 24th, 1929. That’s the story, at least.
It makes for a good story because it’s a specific event on a specific day. But if you were to go back to October 1929, during the crash, the average American might seem unfazed. Only 2.5% of Americans owned stocks in 1929.
The huge majority of Americans watched in amazement as the market collapsed, and perhaps lost a sense of hope that they, too, might someday cash in on Wall Street. But that was all they lost: a dream. They did not lose any money because they had no money invested.
The real pain came nearly two years later, when the banks started to fail.
Just over 500 U.S. banks failed in 1929. Twenty-three hundred failed in 1931.
You Have To Live It To Believe It
.You Have To Live It To Believe It
Apr 9, 2019 by Morgan Housel
Richard Held and Alan Hein raised 20 kittens in pitch black darkness. Which is the kind of thing you should only do if it’s necessary to prove a point critical to understanding how the world works. Thankfully they did just that.
The two MIT cognitive scientists, working in the 1960s, showed that seeing the world around you was not enough to understand how it works. You had to actually experience that world to learn how to operate in it.
The scientists raised cats in total darkness to control the relationship between seeing and learning. Once a pair of kittens were old enough to walk, they were placed in a lighted box for three hours a day.
In the box was a kind of carousel, with each kitten placed in a harness. One of the cat’s legs reached the floor, and its walking movements made the carousel move in a circle. The other cat’s legs were restrained by the harness. It could see everything going on – the movement, the other cat walking around in circles – but its legs never touched the floor. It had no active control over the carousel.
First Things First : Why You Must Get Out Of Debt
.First Things First : Why You Must Get Out Of Debt
May 22, 2020 · by The Escape Artist · in Debt ·
Here’s a question I saw online in a financial discussion forum:
“I would like to ask some advice from you. I have recently came into a small windfall of money to the sum of £3K and wondered what best to do with it. Not a lot I know, but for my salary its quite a bit.
Initially my thoughts were to either:
– Invest into a stockmarket tracker fund?; or
– Start saving towards a deposit for a flat?
…but then I wondered whether I should use it to pay off my credit card debt or my student debt?”
This is a bit like someone asking what type of garden furniture they should be buying when their roof is on fire. Often in personal finance there is no right or wrong answer, its down to individual preferences. But here there is a correct answer and it goes something like this:
Why are you talking about investing in the stock market or buying a house?
First things first…you have CREDIT CARD DEBT and that is an EMERGENCY. You need to pay that off, right now!
Not My Priority - Investment Pointers
.Not My Priority - Investment Pointers
Dennis Friedman May 22, 2019
SOME YEARS AGO, I had a health scare—and it taught me an important lesson about my relationship with money. My primary care physician wanted me to see a hematologist. “Your white blood cells have been trending lower for the last five years,” he opined. “We need to find out what’s causing it.”
After a number of tests, the hematologist thought I might have a rare blood disease. He said the test results were inconclusive, but I fit the profile. He wanted to confirm his suspicions by performing a bone marrow biopsy. He went on to say that there was no cure for the disease, but there were drugs that could extend a patient’s life.
The doctor’s comments shook me to the core. Suddenly, I faced the possibility that my time on earth might run out far sooner than I expected. I started thinking about the things in my life that are important to me. How do I protect, experience and enjoy them?
My Five Truths
.My Five Truths
John Goodell | June 3, 2020
MANY MEMBERS of the military live in a crisis-like state. They’re frequently deployed to dangerous places. Their families often have to move every few years.
Today, that sense of crisis is shared by many others. In fact, with 23.1 million Americans unemployed as of April, a government paycheck seems stable by comparison.
How can families prep their finances for ongoing economic instability? Here are five of the money principles I advocate in my work counseling soldiers, veterans and their families:
1. Instead of expecting 7% to 10% annual investment returns—which may have occurred historically but will likely be less for the foreseeable future—try reducing your living costs by 7% to 10% and investing the difference. The compounding effect on your family’s wealth will be powerful.
You’ll “need” (a word folks use when they actually mean “want”) less to cover your living costs when you’re older, because your expenses will have already come down.
Who Actually Feels Satisfied About Money?
.Who Actually Feels Satisfied About Money?
Joe Pinsker July 21, 2019
“It’s not just how much you have—it’s what you do with it,” says one researcher who studies money and happiness.
These days, not even the rich feel rich. According to a recent survey by the financial-advisory firm Ameriprise Financial, only 13 percent of American millionaires classify themselves as wealthy. Even some of those surveyed who had more than $5 million across their bank accounts, investments, and retirement accounts said they didn’t feel rich. If multimillionaires don’t feel wealthy, who does?
I decided to go to Elizabeth Dunn, a psychology professor at the University of British Columbia and a co-author of Happy Money: The Science of Happier Spending, with my question: Once people have enough money to cover their basic needs and then some, what would make them feel satisfied—happy, even—with what they have? Dunn said she didn’t know of any academic studies that addressed this question head-on, but she did point to some related research that provides possible answers.
The Reason Many Ultrarich People Aren’t Satisfied With Their Wealth
The Reason Many Ultrarich People Aren’t Satisfied With Their Wealth
Joe Pinsker December 4, 2018
At a certain point, another million dollars doesn’t make anything newly affordable. That’s when other motivations take over.
As the number of millionaires and billionaires in the world climbs ever higher, there are a growing number of people who possess more money than they could ever reasonably spend on even the lushest goods.
But at a certain level of wealth, the next million isn’t going to suddenly revolutionize their lifestyle. What drives people, once they’ve reached that point, to keep pursuing more?
There are some good explanations, I found, after talking to a few people who’ve spent significant amounts of time in the presence of and/or researching the really, really rich. Michael Norton, a Harvard Business School professor who has studied the connections between happiness and wealth, had a particularly elegant model for understanding this pattern of behavior.
Why So Many Americans Don’t Talk About Money
.Why So Many Americans Don’t Talk About Money
The taboos vary by class, job, and circumstance.
Joe Pinsker March 2, 2020
Americans love to talk about how Americans hate to talk about money. Indeed, recent surveys from financial and market-research firms have found that in 34 percent of cohabiting couples (married or not), one or both partners couldn’t correctly identify how much money the other makes; that only 17 percent of parents with an income above $100,000 a year had told (or planned to tell) their children how much they earn or their net worth; and that people are “more comfortable” talking with friends about marital discord, mental health, addiction, race, sex, and politics than money.
These results seem to point to a society-wide gag rule that discourages the discussion of financial details. But there are caveats. The companies that tend to publish findings like these stand to gain from persuading people to talk more about their money, if not with their loved ones, then with a professional financial adviser. They’re also, therefore, more likely to be interested in the psychological drama of people who make $100,000 a year than in that of people who make less.
Find The Financial Confidence You Need To Make Smart Money Decisions
.Find The Financial Confidence You Need To Make Smart Money Decisions
March 10, 2020 By Cash For Tacos
Making financial decisions, and feeling confident about them, is no easy task. The decisions we make for our money can have long term effects on our financial well-being. And that can be a terrifying realization.
Decisions like: How much mortgage can I afford? Is this the best price I can get on airfare? How much should I be saving? Do I invest my savings? What do I invest in? Can I quit my job? Do I have enough money to retire?
These are all tough decisions, and it’s easy to stress out about making the “right” choice. If we aren’t a financial professional, money expert, or a travel hacking guru, we may not believe we have the expertise needed to make smart money choices. And this makes feeling confident in our financial decisions hard.