What “free” really costs
“Investors need to be on their toes. They need to be asking more pointed questions and they never should accept the word ‘free’ at face value because nothing is free.”
– Ben Johnson, Morningstar global director of ETF research, in a 10/2/19 Morningstar article about the costs investors will continue to incur in an era of free trading. Read more
Fear of spending
“People saved all of their lives to make sure they will enjoy retirement. So why are they so reluctant to spend the money for the purpose it was intended?”
– Kim Blanton, in a 9/26/19 post on her Squared Away blog about the uneasiness many retirees feel when seeing their portfolio balances decline. Read more
The Superman syndrome
“When someone gets an inheritance, ‘there can be a feeling of invincibility, and when people feel invincible, they don’t make good decisions.’”
– Susan Bradley, founder of the Sudden Money Institute, which trains financial advisors to help clients handle windfalls. Quoted in a 9/20/19 New York Times article, Bradley was describing a common mindset among people who inherit money and then go on to squander it. Read more
No quick fixes
“The field of anti-poverty policy is littered with the detritus of instant miracles that proved less than miraculous.”
– From the book Poor Economics by MIT economists Abhijit Banerjee and Esther Duflo, the latest winners of the Nobel Prize in Economics (along with Harvard economist Michael Kremer), for their “experimental approach to alleviating global poverty.” Quoted in a 10/15/19 BBC article, Banerjee and Duflo said there’s no magic bullet for reducing poverty. Instead, they have found that a series of small, informed changes can make a difference. Read more
Start now
“When asked, ‘If you knew then what you know now, what would you have done differently?’ the No. 1 answer for all respondents: ‘I would have started saving earlier.’”
– From a Fidelity Investments survey of recent college graduates, current college students, and their parents. The study also found that about 20% of recent grads wish they had chosen a less expensive school. Read more
Mind games
“It is well recognised that successful people often fall foul of the narrative fallacy, overplaying the role that skill had in their success and underplaying the role of luck.”
– Richard Hughes Jones, in a thought-provoking post on his self-titled blog about the dangers of “survivorship bias.” Read more
Happy days
“Our national happiness is like an adjustable spanner that we open and close to calibrate our experiences against our recent past, with little lasting memory for the triumphs and tragedies of our age.”
– Thomas Hills, lead author of a massive new study about the happiness of people in four countries over a span of nearly 200 years. Quoted in a 10/15/19 Vox article, he said “subjective well-being” is remarkably resilient in the face of life’s ups and downs — that when people become less happy during difficult times, they tend to bounce back soon enough. Read more
