We overcomplicate things. Even simple concepts are twisted and tangled into complicated webs of ideas. This is not simply a matter of personal observation; it is a cognitive bias known as complexity bias. My favorite tool to combat our tendency to overcomplicate matters is Occam’s Razor.

Maps are abstractions of reality - a reduction of what they represent. This reduction is necessary but inherently flawed. Even the most precise maps do not fully and accurately depict the territory they represent. This is true, too, of the mental maps we've charted through our experiences and beliefs that help us simplify an intricate reality into something comprehensible.

Can a butterfly flapping its wings in Brazil trigger a tornado in Texas?

In 1961, Edward Lorenz, an American mathematician and meteorologist, studied weather patterns and developed computer models to forecast weather conditions. During his research, he made a remarkable discovery. He observed that even the slightest changes in the input parameters of his model resulted in significantly different outcomes. He coined this phenomenon “sensitive dependence on initial conditions," meaning that minor variations in the initial conditions could lead to significant differences in forecasted weather patterns.

This past weekend marked the conclusion of the 149th Kentucky Derby, a renowned event called the "Run for the Roses" and the "Most Exciting Two Minutes in Sports." During this time of year, I am reminded of a 1973 study by Paul Slovic - coincidentally, that's the same year Secretariat won the derby in a still-standing record-setting fashion. The important study showcased the influence of information on horse bettors, which is also relevant to investors.

What does our use of money say about us? How do we decide on what to spend? 

Sometimes money is fun coupons, but it can also be relaxation coupons, health coupons, education coupons, experience coupons, survival coupons, or whatever else we need.

Ultimately, money is value coupons -our spending results from (and reflects) our value system.

Arnold Van Den Berg survived the Holocaust but was left angry, confused, and depressed. His parents miraculously survived Auschwitz, but his early years were filled with angst. A damaged young man emerged from the war, but Arnold recovered to become a top-class money manager by learning to control his mind - a true rags to riches story.

One word can change the course of your financial history - "later." 

That single word can doom even the most well-intended personal finance goals. I've talked to very rich people, and I've spoken with poor people, and without a doubt, the number one regret most people have when it comes to financing is waiting until "later."

Money alone doesn't lead to happiness. But does happiness lead to money? I recently had the opportunity to talk to psychotherapist Joyce Marter, author of The Financial Mindset Fix, and her observations from years of clinical work were fascinating.

I take far more calls when the markets are down than up. Investors are more fearful during a drop than they are optimistic during a climb. Positive returns feel good but negative returns are outright painful. These feelings can be attributed to the loss aversion bias, a human tendency that has been impacting investment returns since the beginning.