Last week we looked at four "stinking thinking" cognitive biases that contribute to poor investment decisions. Here are six more.
Regardless of the facts, our perception is our reality. This is especially true when it comes to investing, where we often make decisions based on the perceived risk we believe exists, whether or not that degree of risk really exists.
For decades, financial experts like myself have implored clients to have a health care power of attorney. Now, some health care experts say you don’t need one because they don’t work.
Do you know someone who is financially dependent on an advisor who views themself as a financial guru, has "the answers," demands loyalty and compliance to their recommendations, willingly takes charge of their financial life, and craves the attention and adoration of their clients? For the financially dependent, it's a match made in heaven – until it isn't.
Many people experience setbacks or life circumstances that result in temporarily relying on others for financial help. Being financially dependent in the longer term, however, is a financial disorder.
Those intending to shame or attack "the rich" commonly make an absurd comparison when they lump together "millionaires and billionaires."
As a recovering workaholic who loves what I do, it is essential to understand what drove that condition and the costs it incurred for me and my family.
There is no greater threat to your financial wellbeing than divorce. Unless you are very wealthy or extremely poor, both former spouses will see a decline in their lifestyle
Bari Tessler was practicing financial therapy before most of the rest of us had ever heard the term.
What would you guess the average American worker makes in a year? This is the question Nina Strohminger, professor of legal studies and business ethics at University of Pennsylvania’s Wharton School of Business, asked her business students recently.
There are almost always ways to make things work financially between a couple. Sometimes a skilled financial planner has enough tools to accomplish this. Sometimes financial therapy is necessary. Fortunately, there are financial therapists that specialize in couples.
We've made it to the middle of January, that time of year that is the graveyard for so many New Year's resolutions. Even if you abandon any other resolutions you may have made, please carry out a very important one: Make a will.
Investment advice is not financial planning. This is an important distinction to understand when someone goes shopping for financial advice. Do they only need help with investment decisions, or do they need guidance on all aspects of their financial life?
What makes life worth living? This question is at the heart of financial life planning and financial therapy.
Once we look at "what is" rather than "what we thought it was," we begin to create a future that is consciously and deliberately planned.
No example of transformation is more well-known this time of year than that of Ebenezer Scrooge in Charles Dickens's A Christmas Carol.
What’s up with crypto, and should it be in your portfolio?
Many of us are perfectly willing to talk a lot about others' money: the cost of government programs, the cost of living, our personal taxes, and public policy on taxing business profits. What we don’t talk about is our personal money.
The financial services field is one of the most regulated in the U.S. Our regulations are as complex as those in the medical field. This makes sense; our health and our money are two important pillars of wellbeing. Preventing harm to either can be a matter of life and death.
Last week's article on being financially stuck focused on getting help. But what if, for various reasons like affordability or availability, outside help isn't a practical option? Here are some steps you can take yourself to begin getting financially unstuck:
What do you do as a driver if your car gets stuck in the mud or a snowbank? You try shoveling, rocking the car back and forth, or putting something under the wheels. Sometimes, though, you can't get unstuck by yourself. You have to call for help. What do you do if you find yourself financially stuck?
As with any headlines or sound bites from political figures, it's a good idea to dig deeper before you respond with outrage.
One of the biggest conundrums of estate planning is considering how, or even if, you can give money or property to your heirs in a manner that will help them.
How do you find a comprehensive financial planner who integrates your humanity with the dollars and cents? The difference between a traditional financial planner and one that practices financial life planning is significant.
One of the most influential financial planning organizations I participate in doesn't officially exist.
Read the recent headlines about the so-called Pandora Papers and you would think it opened a Pandora’s box of tax-evasion schemes for the wealthy that leverages favorable tax treatment in certain states, such as South Dakota.
You may have reacted with concern to recent news reports about the August 31, 2021, report from the Social Security Trustees. But fears of Social Security going broke are overblown.
Money vigilance has a dark side. It can limit someone's ability to enjoy relationships, leisure, and fun.
People in this category equate net worth with their self-worth. They may hold beliefs such as, "The higher your earnings, the more successful you are."
When a client says, "Things would get better if I had more money" or "More money will make me happier," they are a money worshiper. Here is how to work with them.
Those with dominant money avoidance scripts resist budgeting, investing, managing finances, or even learning about money. The further away they can get from financial decisions, the better.
Home title theft. This is a "threat" I only learned about from frantic radio commercials warning that your home can be stolen from you.
For our ancestors, even as recently as the 19th century, survival skills were hands-on. If you didn't know how to build a house, farm, hunt, butcher animals, sew, and cook, you couldn't provide well for your family. Money skills were largely worthless. It’s completely different today.
Is maintaining good physical health a worthwhile investment? The statistics suggest that in the long run, poor health will cost far more than the money or time it takes to maintain good health. Most of us might say we agree with this conclusion, but our behaviors say just the opposite.
Emotional trauma can develop around eight general types of money events: giving, receiving, spending, saving, loaning, borrowing, earning, and taking. Typically, if one feels a sense of shame around any of these, there may be some past financial trauma.
Most lump-sum inheritances disappear within a few years in the control of an over-spender.
What does trauma have to do with money? Because money is so integral to all aspects of our lives, distressing or disturbing financial experiences can overwhelm someone and become traumatic events.
In the words of one of the wealthiest people in the world, "Possessions kind of weigh you down."
Since financial health is a crucial component of wellbeing, why do Americans avoid getting professional help from financial experts?
In July, families eligible for the federal child tax credit will begin receiving monthly payments instead of waiting to receive an annual credit when they file their 2021 tax returns.
I'm not a big fan of the Financial Independence, Retire Early (FIRE) movement, which advocates extreme frugality to retire as early as age 30.
Estate planning for the recently engaged couple is a challenge. It's something that is often overlooked, even by financial advisors. Yet it matters, as I've seen in my own practice.
How much money does it take to be wealthy?
The reasons that block us from acting to support our future financial well-being can be both internal and external. If you are putting off a financial action that you know is important, consider whether any of the following factors may apply…
Brokers who charge commissions are two to eight times more likely than advisors who charge fees to recommend risky investments.
A lot of stock market experts are concerned that the market is overheated and ripe for a new bear market.
Does the executor of an estate deserve to be compensated for that service? Absolutely.
Being named an executor means taking on a part-time job. Often, executors have day jobs so the duties of being an executor happen during lunch hours, after work, and on weekends.
Investment success requires that a person have a high tolerance for boredom, which means turning a deaf ear to the financial press’s investment panic-de-jour. It's good for your financial health to avoid following the advice of prognosticating financial soothsayers. Even when one of them is me.
One of the most common reasons new clients seek me out is the loss of their long-standing financial advisor. As an advisor, the best way to protect against losing those clients is to create a team or “ensemble” approach to providing financial advice.