Thoughts On Money [TOM]

Many researchers conclude that an average adult is responsible for making 35,000 decisions a day. Some of these decisions are big, like who you will marry, and others are small, like deciding whether you want cream and sugar in your coffee. To help us navigate these complexities, and the barrage of decisions to be made, we lean on heuristics – little mental shortcuts that help us make quick rule-of-thumb judgments.

Today I would like to address one of these common finance simplifications, “Cash is king” and discuss how we should and should not be applying this to our personal finances.

Links mentioned in this episode:

• http://thoughtsonmoney.com

Joined by TBG Advisor Sean Latimer, your host Trevor Cummings answers some questions of how markets really work.

Links mentioned in this episode:

• http://thoughtsonmoney.com

The human condition finds most of us being short-sighted. What I mean by that is that we tend to get caught up in current events and what’s happening in the here and now, leaving us more often lacking as long-term planners. But beyond solving the short-term (short-sighted) of say, needing a paycheck to keep the lights on, we (investors) also have other aspirations for our money and what it will finance in the future. That growing balance in our investment account represents the accomplishments that coincide with our goals and desires. Will we have enough to pass down to our heirs or the charities that are near and dear to our hearts or the comfort that our nest egg provides as an emergency resource.

Links mentioned in this episode:

• http://thoughtsonmoney.com

Today’s article is about that day we hang up our occupation and step into retirement. The question is, will you love it?

Links mentioned in this episode:

• http://thoughtsonmoney.com

The key to making good decisions is creating an environment that is conducive to success. When it comes to investing, much of this battle is fought in your mind and it revolves around expectations. Most bad financial decisions will be a result of an investor reacting to disappointment – an investment did not meet their expectations, and this triggered a feeling of disappointment which then lead to a poor decision.

Here on TOM, we’ve stated that there are big differences between long term average returns and the actual returns you experience on a yearly basis. If you hear someone say something like, “The stock market has returned 9% on average over the last 100 years” then you might expect that if you invest in the stock market then you should always expect a 9% return. Whenever we see this word expect, it should be a warning sign.

So… to equip ourselves for the realities of markets and to create that optimal environment for success, we need to first set the right expectations.

Links mentioned in this episode:

• http://thoughtsonmoney.com

I love playing basketball, watching basketball, thinking about basketball. I love basketball. Maybe it’s because it not only requires skill, agility, and endurance but also because the best teams win because they have a good game plan, one that is able to adjust to their opponent, one that is disciplined and practiced to perfection.

If you would be so kind as to indulge my obsession for a minute, I believe the analogies I use for my favorite sport and my favorite profession will be interesting and helpful. So let’s dribble on in to TOM. Sorry, I couldn’t help myself!

Links mentioned in this episode:

• http://thoughtsonmoney.com

This past week I had the pleasure of getting lunch with a recent high school grad to discuss the wonderful world of finance. He’s a bright young man and is exploring what he wants to study in school and the career path that most interests him. He’s got a knack for numbers and thinks investing and/or advising might be a good fit.

These exploratory conversations about finance often tend to spark some really interesting dialogue, getting me to the core of why I do what I do.

With such a tumultuous time in the market on his mind, this young lad asked a simple question – Why do people invest? While the question is simple, the answer does have some interesting components to it. This week’s Thoughts On Money takes on this and more.

So off we go…

Links mentioned in this episode:

• http://thoughtsonmoney.com

I typically devote some part of my weekend to researching on what I plan to discuss each week on Thoughts on Money [TOM]. I had no idea that my decision to write on topics of risk, drawdowns, and recovery periods, as I believe these are important topics for investors to understand, would also be so timely based on how the markets kicked off this week!

Links mentioned in this episode:

• http://thoughtsonmoney.com

Will the income from your portfolio satisfy all of your living expenses in retirement? This week's TOM looks at important factors to consider.

Links mentioned in this episode:

• http://thoughtsonmoney.com

In the past few weeks, I’ve found myself in multiple conversations explaining the need and purpose of life insurance. We’ve covered this topic in previous issues of TOM, but based on the recent inquiries, I thought it appropriate to provide a succinct refresher.

Links mentioned in this episode:

• http://thoughtsonmoney.com