The Virtue of Optimism

The current pandemic breeds a lot of uncertainty and fear.  The media actively participates spreading the fear. Headlines often accentuate the negative because that is what gets us to tune in. 

Pessimism and cynicism are weirdly addictive. While addictive, they can also be destructive – both mentally and financially. Most of us don’t seek them out, but when we encounter them, we just can’t turn away. They can consume our thoughts and affect our mood. It is easy to be a pessimist. It is more difficult, yet more virtuous, to see the good - even in bad times.

Preserving Your Mental Health

The challenges we face today are unique and significant. The Coronavirus has unleashed uncertainty, economic pain and shelter-in-place for much of the population. Any one of those alone can impact our mental health; the combination of all three can wreak havoc on us.

The Coronavirus: A Healthy Perspective

We have our first surprise of the year: The Coronavirus.  Just last month I wrote in my annual forecast that we will be surprised by something this year. This is likely the first of several unexpected, unpredicted events we will experience in 2020.

It’s a good time to take a step back and identify what we know, what we don’t know, what we can control and what we can’t control. Those types of thinking exercises can help us make good decisions.

Achieving Success

Oftentimes we look at others’ success and see some circumstance that may have contributed to said success. While circumstances may make it easier or more difficult to achieve success, they do not create success on their own. Researchers have found that mental toughness and perseverance predicts our level of success more than any other factor.

Creating Happiness

Does money buy happiness? Yes and no. Researchers have found that money can increase happiness for individuals living in poverty. However, once we are above the poverty level, money doesn’t do much to promote happiness. 

The Power of Adaptation

Humans are very good at adapting to our changing world. Adaptation is a change in behavior that allows us to be better suited for our current environment.

Anticipation of change is often more powerful than the long-term effect of the change itself. When we imagine a terrible event, such as being paralyzed, we imagine an awful life – no way we can be happy. But studies show many paraplegics are happy, for they adapt to their “new normal” and find purpose in their life.

On the flip side, imagining we win the lottery can produce strong feelings of euphoria. Yet, after a period of time, lottery winners are found to be just as happy (or unhappy) as they were before. They adapt to their “new normal”, and life goes on.

Sometimes We Just Get Lucky

Last month, a single bet on Tiger Woods winning the Masters resulted in a $1.2 million payout. 

This was not a bet made by a wealthy individual or professional gambler. Rather, the bettor was a self-employed day trader saddled with a mortgage, two student loans and two car loans. He describes himself having a background in finance and considers himself “a responsible guy.”

I don’t know how responsible it is when someone in significant debt places an $85,000 bet on a single outcome. What would cause “a responsible guy” to do something so risky?

What's Your Number?

In the financial world someone may ask you, “What’s your number?” Odds are they aren’t trying to pick you up. Rather, they are referring to the amount of money in which you achieve financial independence (aka retire).

Defining such a number is essential in financial planning. It provides the basis for how much you need to save each year, what kind of investment returns you need to achieve and how many years until you can retire

When Smart Money Isn't So Smart

We often hear pundits on TV talking about what the “Smart Money” is doing. Who are these smart people? What makes them so smart? And if they are smart, what are we?

What's Not Going to Change

Change. We spend much of our time thinking about, predicting and anticipating it.

Several years ago, the founder and CEO of Amazon, Jeff Bezos, turned the question of change on its head. He said it is more important to consider what will not change. In other words, what are some fundamental truths we can rely upon?