A few weeks back, I talked about the good-is-better-than-perfect principle. A close corollary is to approach financial decisions incrementally. What do I mean by that? An example is dollar cost averaging, whereby a sum of money is invested in regular increments rather than all at once. Does [...]
Intersections
Back in the 1950s, economists Franco Modigliani and Merton Miller developed a theory that, even today, is taught in virtually every finance class. To understand this theory, suppose you’re running a company and want to build a new factory. To raise money for this project, you generally have two [...]
Rethinking
Recently I started reading the new book Think Again by Adam Grant. This got me thinking about all the ways that, over the years, conversations with clients have led me to look at things through different lenses. Below are several such topics: There’s one important financial question that stumps [...]
The obstacle course of personal finance
Today marks the 200th installment of this blog. In looking back, one recurring theme stands out: Managing one’s finances is, in a lot of ways, like managing one’s health. Ask any doctor, and they’ll tell you the recipe for good health: Exercise, eat right, don’t smoke. It’s not complicated. And [...]
A matter of perspective
When it comes to financial questions, there are two reasons people might disagree: In some cases, they disagree about the facts—whether interest rates are headed higher, for instance. But sometimes people disagree for another reason: They see things through different lenses. For example, last [...]
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