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This Holiday Season, Ignore the Relatives

‘Tis the season to gather and celebrate with friends and family. Each year, old traditions are remembered and new traditions are made. We reconnect with those we see often and long-lost relatives alike. Reliability has become an evasive event in the busy world we live in today. In the craziness and uncertainty of our day-to-day lives, we take solace in the certainty that some of these events provide.

In some families, it is a holiday tradition to attend church or temple together. In others, Grandma will play the piano while everyone sings along. And in others, it is a virtual certainty that everyone will get their year’s worth of invaluable wisdom from that goofy brother-in-law that goes by “Blaze”.

Celebrating with relatives is a wonderful thing, but this time of year, we must all be more conscious of the unrelenting human desire to compare ourselves and our decisions to the people and things around us. The relatives you ought to ignore are not people, but perceptions. (more…)


All Wealth is Relative

A recent article on CNN Money cited that “a whopping 70% of those with at least $1 million in assets that are invested or available to invest, excluding home values, don’t consider themselves to be wealthy…it’s only when they hit the $5 million mark that millionaires begin to feel ‘wealthy.'”

I would submit that our feelings of wealth are far more associated with the life decisions we make and social circles we participate in, than the numbers we see on our net worth statements. Ted Roosevelt once said, “comparison is the thief of joy.” Feeling wealthy is a function of feeling that you have enough…of wanting what you have, rather than being consumed with what you want. (more…)

Approximately Right vs. Precisely Wrong

Photo Credit: ThinkStock

Photo Credit: ThinkStock

The second president of the United States, John Adams, made a prediction years ago in a letter to his wife:

“The second day of July, 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival…It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bonfires and illuminations, from one end of this continent to the other, from this time forward forever more.”

Make no mistake about it, John Adams painted an incredibly accurate picture of what was to come! This coming month, a mere 237 years later, our nation will celebrate its great anniversary festival by hosting parties, parades and fireworks with our neighbors, family and friends.

But focusing too heavily on the details, however, one could also argue that John Adams was wrong. After all, we celebrate our nation’s independence on the fourth of July, not the second!

In hindsight, it seems ridiculous to claim that Adams was incorrect. In the moment, however, it is easy to get distracted by minutia that has little relevance to our financial well-being. We easily become critical of ourselves and envious of others, resulting in us completely missing the big picture. (more…)

Rationalizing the Foodie Lifestyle

I was recently quoted in an article in the Minneapolis Star Tribune about a subject near and dear to my heart – food! The article, Millenials are Becoming the Foodie Generation, is about the growing tendency of millenials to be very passionate about what and where they are eating.

While I would argue that this is far more than a generational phenomenon, millenials pay more attention to their food and dining experience (both at home and out on the town) than any generation ever has in their 20’s and 30’s. This has, in turn, led to an explosion of new restaurants promising a unique and vibrant scene, along with dozens of farmers markets and grocers that focus extensively on locally sourced and organic foods.

The danger of this lifestyle progression is that many millenials refuse to make these necessary trade-offs. A recent New York Times article titled, Younger Generations Lag Parents in Wealth Building, explains that the average millenial has less wealth accumulated than their parents did at the same age. While there are no shortage of articles about this blaming everything from mounting student loan debt, to the housing collapse, to unemployment and underemployment rates among this generation, the simple reality is that lifestyle inflation from generation to generation has greatly outpaced wage growth.


Virtually any foodie will acknowledge that healthier ingredients for cooking, or a better dining experience out on the town comes at a cost. One of the millenials interviewed for this article states that he spends as much as 20% of his income on food. While that number may seem ridiculous at first glance, the average household spends 11% on food today, but spent nearly 17% in 1984. (more…)

Money is a Servant to Your Life, Not Its Master

It has been often said that money is a wonderful servant, but a horrible master. While each individual boasts a different definition of financial success, people that treat money as a servant to their life tend to enjoy a much higher degree of happiness and satisfaction.

Money itself is a dull, lifeless, man-made creation with zero utility. However, because we have assigned it a value, we can use it to purchase things and experiences throughout our lifetimes. But we must not confuse the pursuit of money with the pursuit of happiness. The inherent value of money is not money. Instead, it lies in what it allows you to experience, whether that is a great meal, a trip to Bora Bora, the freedom to do whatever you love to do, or the feeling you get when you give to someone in need.

In his book, Your Money and Your Brain, Jason Zweig explores the time-honored phrase that money cannot buy you happiness in reverse: can happiness buy money? He writes that “happen and happiness come from the same Old English root word, and happy people seem to make good things happen more often.” Because money is so intertwined in everything we do and experience in our lives, it is imperative that we make an effort to position our financial lives and use our money in a manner that increases the likelihood of good things happening. (more…)

Separating Fear from Uncertainty

This article originally appeared in the Minneapolis Star Tribune on November 5, 2012:

We are in the midst of the most hated stock market rally in history. Nearly every bit of news we’ve heard and every detail we’ve read over the past four years would seem to suggest this rally would be impossible. It has occurred in the face of high unemployment, a declining dollar, low consumer confidence, huge deficits, wars, political unrest here and abroad, nuclear disasters, a poor housing market and more.

While financial markets continue to advance, investors continue to wait for the proverbial ”other shoe” to drop.

Our minds are incredibly powerful things that can make us believe almost anything. We rarely process facts by themselves. Rather, we consider them as part of a bigger story. This is why we cling so tightly to facts that support the story we want to tell and reject those that don’t fit. (more…)

The Stories Our Minds Tell Us

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Thinking Fast and SlowIn a 1983 study, psychologists Daniel Kahneman and Amos Tversky provided a group of people with a list of 8 occupations and asked them to rank Linda’s likely occupation based on the fictional profile outlined above. The occupation of bank teller ranked 8th out of 8 – dead last.

Kahneman and Tversky took this result and created a follow-up question: which of the following is more likely?

  1. Linda is a bank teller
  2. Linda is a bank teller and is active in the feminist movement

The overwhelming majority of participants selected #2, despite the fact that it is literally impossible for it to be correct unless #1 is correct.

Our brains are wired to visualize, and the more lifelike the image, the more we cling to it. The addition of descriptive details allows our mind to paint a more vivid picture of the concept we are wrestling with. Naturally, we seek additional details to support the story unfolding in our minds.

This is the mechanism that allows us to “get lost” in a great novel and bring the story to life. A great novelist is an expert at using words to produce images in our minds. We actually see the story unfolding in our brains as we read the words on the page. It is a very cool ability we have been blessed with as human beings. However, this wiring can severely impair our judgment and decision-making. (more…)