Week 32: Wild Card Topic

What can you do this week?

• Begin looking at statements you’ve ignored.

• Complete a Net Worth Statement.

• Track your progress and create a plan for financial independence.

• Talk to a financial planning professional (preferably fee-only) if you need help in any of this.

To learn more about my services, checkout my website and schedule a call.

Humans & Cognitive Bias

• We are hard wired to believe what we want to believe.

• Until an external source forces us to question or potentially see another view, we hold on tight to long held beliefs.

• The Ostrich Effect is telltale human behavior.

• I’ve known people personally who “are healthy as a horse. He hasn’t had to see a doctor at all for 10+ years”.

• Healthy in perception doesn’t equate to healthy in existence/reality.

One Example

• In the below video, both partners manage Air BNB properties as only one aspect of their joint financial life.

• One is very involved, the other not so much.

• When asked how these are helping the family’s cash flow, “we break even” is the answer from the accountant and more financially involved spouse.

• The other spouse, shocked, thought they were making at least $40,000 per year in income from them. Big difference

Blind Spots

• A professional helps you see what you don’t see.

• When we question the value of advice, we usually aren’t aware of what an objective view can bring.

• We can’t see the risks of staying put, doing the same as before, until there is a real risk in staying put.

• This is especially the case in finances because the same compounding that benefits us in creating wealth also works against us as years go by while not saving enough, staying invested, servicing high-interest debt, and other behaviors’ effects work against us.

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