When we talk about the chances of something bad happening, people tend to fall into three general groups. ■The Numbers Don’t Matter No matter the odds, this group dismisses the statistics. People insist they can trust their gut. I suspect this group buys lottery tickets every week. Read the rest of the article on The…
You know what’s crazy? The key to getting people to think you’re smart is to stop talking and to start listening. Let me share a little story to demonstrate. Recently, I attended a dinner party with my friend and colleague Dan Solin. We were in a group of 12 sitting at a rather large table….
Almost 10 years ago, I knew a guy on a financial rocket ship. He had a great house, a successful business and a solid income. But then things changed. With the benefit of hindsight, it was clear he bought a little too much house and spent a little too much money. At the beginning, he…
In personal finance, almost all of the advice we come across seems to focus on playing defense. We’re always looking for ways to build bigger and better walls to protect ourselves from bad behavior: Cut up the credit cards. Pay only with cash. Stick to a budget. Hide the passwords. It’s all good advice, but…
On paper, your investments in stocks, real estate or even cash may look like your greatest assets. While all those things are superimportant, you have something else that’s even more valuable. It’s the investment called you. Finding ways to increase your value while doing the things you love may be the most important thing you…
Imagine a hypothetical guy who lives a responsible financial life. He’s focused on meeting his obligations, even though he doesn’t have a big cushion when it comes to his take-home pay. Things are tight. He’s not quite living paycheck-to-paycheck, but it’s close. Then one day, an external shock completely outside his control occurs, and it…
A few years ago, a friend of mine who happens to be a really well-known journalist had a conversation with a really well-known academic. Because the conversation was private, I’m not mentioning names. But I did want to share one fascinating part of their discussion. They were talking about cognitive biases. A cognitive bias is…
Psst. Excuse me. I’ve got a secret. I feel like I should be talking really quietly right now, but first I need to warn you. This secret is going to seem incredibly obvious. You may even wonder why I’m going to tell you about it at all. The secret comes in two parts: 1. We…
I love spending time in the mountains. So a few weeks ago, I jumped at the opportunity to join a friend, my son and seven of his friends on a trip into the Uinta Mountains. This range sits about an hour east of our home in Park City, Utah. We planned the trip to last…
A few years ago, I came across a blog post by a writer named Emma Johnson who declared, in no uncertain terms, that “You. Cannot. Afford. To. Be. A. Full-time. Stay-at-home mom. You just can’t.” I like strong opinions because they make me think and help me clarify my own feelings, and this statement certainly…
Pay attention! We hear this command a lot, often from parents and teachers. People want to remind us to focus on what we’re doing. But I’ve been thinking about a more literal meaning: paying with our attention. Attention is a currency. We choose how to spend it, just like we spend our time, energy and…
Over the last five years, I’ve spent a lot of time traveling the world to talk to people about money. At least one common theme comes up again and again: anxiety. People are worried about the future and want to know what they can do to prepare themselves for a stable financial life. As we…
What happens when we’re driving and we reach a red light? We stop, right? When the light turns green, we hit the gas. If we don’t, it usually doesn’t take long for the driver behind us to start honking the horn. Anyone who has survived driver’s education (or sitting in the back of a taxi)…
I love a good story. In fact, I used to tell myself at least one new story every time I opened my credit card statement. “Oh,” I’d say to myself, “I was so busy last month, it makes perfect sense that I ate out a dozen times. I’ll just eat out less next month.” Other…
I have a crazy idea I want to run by you. Imagine that a cultural anthropologist finds one of your credit card statements in 100 years. What would your spending suggest you value the most? Based on your spending, what assumptions might someone make about how you live your life? Our credit card statements (really,…