The Trappings of Prosperity: Escaping the Misappropriation of Resources
Prosperity-blinded indifference is a term that Charlie Munger uses to describe companies that, when they are doing well, start to misallocate resources to areas that are unimportant to adding value. Individuals do this, too, as they move up the socioeconomic ladder. By understanding prosperity blindness, we can be more mindful of our desires and make choices that are aligned with our values.
The Handicapper's Fallacy: Unraveling the Myth of More Data, More Success
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.
From Cinderella Stories to Bank Runs: Understanding the Recent Financial Shake-up
We looked forward to Cinderella stories, buzzer beaters, and "one shining moment." Instead, we got bank collapses, government backstops, and fear. I'm talking about the banks (Silicon Valley Bank and Signature Bank) that have dramatically exited the financial system - raising concerns over the financial system and economy.
Beyond Certainty: Embracing the Unpredictable Universe of Financial Planning
Dune author Frank Herbert wrote, "Deep in the human unconscious is a pervasive need for a logical universe that makes sense. But the real universe is always one step beyond logic."
I don't sell certainty, and no one else should either. Unfortunately, in many cases, that's what financial service providers peddle. Like television pundits, many advisors make a living by being opinionated and selling a view of the future based on an illusion of expertise.
Atomic Habits for Financial Growth: Harnessing Newton's Laws of Motion
Atomic Habits Author James Clear wrote about the Laws of Productivity. I borrowed his framework to look at how Newtonian physics can be applied to get started, use force effectively, and reduce negative forces to achieve financial goals. Not to worry, you don't need an understanding of physics to apply Newton's rules of motion to other areas of your life, including personal finance.
Free Resource: 2023 Start-of-Year Financial Planning Checklist
The season of "new year, new you" is upon us. From January 1st to sometime around mid-February, people around the globe will set resolutions and attempt to reinvent themselves overnight. Most will fail.
As someone who strives to improve myself constantly, I've learned that self-improvement, like investing, is won over time. While there's a large market for hacks, shortcuts, and cheat codes, there's no replacement for consistency, discipline, and the aggregation of marginal gains.
Free Resource: 2022 Year-End Financial Planning Checklist
The end of the year is a busy time for everyone, and I don’t want you to miss out on any of the key financial planning deadlines or final opportunities of the year.
Because if we don’t take action by December 31st, they’re gone, done, finito.
Our step-by-step list helps ensure you're buttoned up for the year and can confidently head into the final stretch.
Simplify and Thrive: The Power of Vermillion Private Wealth's One-Page Financial Plan
Just thinking about a financial plan can be enough to trigger stress hormones — imagine being handed a two-inch thick, 150-page document to simply begin . To keep it simple (and stress-free), Vermillion Private Wealth created a one-page financial plan to help clients focus on the most important + impactful actions.
Fun Coupons and Values: Understanding the Psychology of Spending
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.
Embracing Market Volatility: Five Actions for Millennial Investors
Recession, a bear market, inflation — it can be hard to focus on the future when you hear these terms. But, for millennial investors, market corrections mean opportunity. Here are five potential money moves during a down market.
From Gambling Gary to Steady Eddie: A Millennial's Guide to Investment Personas
Like generations before and generations to come, we millennials have had a remarkable financial ride. From the ashes of the great recession, we've slowly integrated into the existing financial world (some more willingly than others) while new, digital rails are being built.
Like the quick drawing artist at the fair, I've created caricatures of familiar millennial investors I've encountered.
Controlling the Controllable: A Path to Resilient Investing in a Volatile World
Remember when Donald Rumsfeld famously used the phrase "unknown unknowns?" During a Department of Defense speech, he used the expression to illustrate the lack of evidence linking Iraq to weapons of mass destruction. He described unknown unknowns as things "we don't know we don't know. This applies to investing too.
The Hindsight Trap: How to Avoid the Pitfalls of Overconfidence in Investing
Everyone in finance is Nostradamus. The uptick in inflation was obvious. The bear market was so predictable. It was clear that ABC Co. stock was going higher. There's only one problem with those three statements - they aren't true. Yet, when market pundits discuss past events, they describe them as inevitable. That's why hindsight bias is also called the "knew-it-all-along" effect.
Contemplating the Sage: Applying Stoic Principles to Investment Decision-Making
In many ways investing is a microcosm of life; the same traits and behaviors that benefit investors also aid people in other areas of life. Thus, even if you don’t consider yourself a Stoic, you may find their techniques helpful when you encounter financial challenges — like managing the stress of a bear market.
From Blue Skies to Stormy Waters: Five Red Flags for Long-Term Investors
Mixed messages confuse investors already battling human nature, which has evolved to make long-term investing challenging. Market corrections and bear markets can be excellent opportunities for long-term investors, but how do you know when to keep buying specific stocks or sell?
Here are five red flags that would cause me to do extra digging.
Unlocking Opportunities: Actionable Steps for Investors in a Bear Market
It's officially official. The S&P is in bear market territory, having crossed the arbitrary line in the sand. Pundits can now move on from "is a bear market coming" to "how bad will it be" and "how long will it last."
If this is your first bear market, it won't be your last, so pay special attention to how you feel, act, think, and cope
Unleashing the Power of the Subconscious Mind: Lessons from Arnold Van Den Berg
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.
Understanding the Price of Volatility: How to Find Peace in Turbulent Times
Everything has a price. We're used to it by now. We live in one of the most capitalistic countries on earth, during the most prosperous time in human history. We're conditioned to think about goods and experiences in terms of dollars and cents. Perhaps that's why market volatility is such a challenging concept.
Unlocking the Magic of Compounding: Why 'Later' is Your Biggest Enemy
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."
The Legacy of T. Rowe Price: Lessons in Independent Thinking and Growth Investing
Thomas (T.) Rowe Price is an OG of growth investing, along with Philip Fischer and others who would sit atop the Mount Rushmore of growth investing. He's most known as the namesake for the legendary Baltimore-based financial company, but his investing prowess and independent thinking impress me most.