Thought of the Week – March 8

“What got you here won't get you there.”

- Marshall Goldsmith -


  • You always need to be evolving and improving 
  • Don't assume that there won't be another peak once you climb the first mountain 


  • Figure out what you need to do to move closer to your goal
  • Become the person that belongs where you want to go

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Thought of the Week – March 6

“The best time to plant a tree was 20 years ago.

The second best time time is now.”

- Chinese Proverb -


  • It's always the right time to take action - don't delay 
  • Small actions if done consistently and with intention will compound massively over time 


  • Take a small step forward today even if you are uncomfortable and don't yet know what your journey will look like
  • Learn by doing as opposed to endlessly planning

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Thought of the Week – February 23

“Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”

- Victor Frankl -


  • Our thoughts and emotions can lead us to make impulsive decisions if unchecked 
  • In order to make better decisions take a moment and become aware of what's causing your thoughts and feelings. 


  • Figure out what the thought and emotion is telling you. Why are you feeling this way? Are you tempted to just respond instinctively?
  • Determine if these thoughts and feelings are legitimate,or just baggage you have been carrying around holding you back from growing as a person

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Retiring in Style?


Item #1 - Deep Thinking

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Item #2 - Planning

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Item #3 - Doing

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Your Call to Action

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7 Behaviors for a Life of Joy and Fulfillment

Joy & Fulfillment

We all get in a funk once in a while. And that is just how life is, right? Better to accept than fight it, but it sure would have been nice if Mrs. Doubtfire had taught me this in kindergarten.

Many days you can’t seem to get anything right and your life seems to be in perpetual drift mode.

You let friends tell you what is important.

You eat that big burrito at lunch to soothe your anxiety over what your boss is likely to say when you tell him that you have yet to read that (yawn, yawn) TPS report.

You fall asleep alone in front of Friends re-runs only to wake up, crawl into bed and, yes, lie there exhausted but awake for the next few hours.

Wash, rinse and repeat for the next thirty years or at least until it is your turn to really live. Pretty exhausting!

But how would you feel if your life was exactly the opposite?

You wake up every day eager to get started with the business of leading a life of joy and fulfillment.

You know people like this and you secretly catch yourself with all these ill thoughts. Yuk!

Why can’t your life be like this?

I have good and bad news for you.

BAD NEWS: There is no magic formula for leading you to a life of joy and fulfillment.

GOOD NEWS: Researchers at the University of Pennsylvania have identified 7 time-tested behaviors that you can focus on now right now to bring more joy and fulfillment into your life.

Psychologists label this framework PERMA+ and the best part of it is that everything is under your control.

It will take a bit of work of the right kind but you no longer can blame your genes or that soul-sucking job.

What science tells you to do for a life-altering payoff

#1: Behave like a well-groomed toy-dog

My dog, a Shi Tzu called Nellie Marie, has been called the happiest dog in our small community, but to be honest, she has lots of competition from other dogs in the neighborhood.

Humans have a lot to learn from these dogs — always in a good mood, wagging their tail.

Having positive emotions puts us in a good mood and according to Dr. Barbara Frederikson’s theory of “Broaden and Build” widens our range of thoughts and actions toward the better.

Positive emotions such as joy, love, and gratitude make us more receptive to doing things that bring us happiness into our lives.

Positive emotions are also associated with greater physical health.

What can you do to become more positive? Here are some ideas:

  • Think about what you are grateful for on a daily basis — you may want to consider journaling about this
  • Savor the “small” things in life such as taking a walk in nature
  • Connect with people — small talk is just fine
  • Do an activity that in the past has brought you great joy

#2: Flow like a Costa Rican river during the rainy season

If you have been to Costa Rica during the rainy season (April-November) you know how hard it can rain and how a normally meandering river can suddenly turn into an endless flow of water.

The endless flow of a river can be compared to the sensation you feel when you are immersed in an activity that you enjoy and where you lose all sense of time.

This sensation has been described as “flow” by Dr. Michael Csikszentmihalyi and has been found to be positively associated with wellbeing.

Star athletes are often able to get in a state of flow or as it is sometimes described in the “zone”, but everyday people can also experience this sensation by engaging in activities and experiences that they find enjoyable and challenging.

You can’t get in “flow” just by snapping your fingers. What you can do is pick an activity that caters to your interests and personal strengths, but that still requires some mental focus.

The beauty of finding “flow” is in doing something challenging, but where you don’t even notice the mental or physical exertion required.

Experiencing flow allows you to feel renewed and re-invigorated.

Photo by Ardian Lumi on Unsplash

#3: Cozy up to the right posse

Having high-quality social connections is incredibly important for wellbeing.

The Harvard Study of Adult Development provides the most direct proof of the value of social connections. The study initially enrolled 724 men in 1932 from various socio-economic backgrounds. Every two years detailed interviews are conducted. 60 men from the original study are still living.

The key conclusion from the study is that good relationships keep us happier and healthier. Loneliness and living in conflict are killers.

Socio-economic differences do not alter the basic conclusion that to live a happy and healthy life social connections are extremely important.

Improving our social connections is about investing in people. Even in our busy lives, we can make time for connection. For example, you could:

  • Set some time up this week (not next month) to meet a long-lost friend for coffee or a drink after work.
  • Call one relative or friend every day to let them know you are thinking of them. Don’t chicken out by using email or text messaging. People want to hear your voice. Even 5 minutes will make a huge difference to somebody in need of human connection.
  • Choose to be more conscious about listening rather than saying what’s on your mind. Let somebody else drive the agenda. Remember you are investing in the relationship.

#4: Close your eyes and imagine your own road to Shangri-La

Finding your own meaning and purpose in life is important.

  • What brings you joy?
  • What’s your ideal life?

Taking the time to think about what matters to you and why gives meaning and direction to your personal journey.

Meaning and purpose give us that sense of being part of something bigger than just our self.

We derive comfort from being part of something bigger be that religious faith, community, a social or environmental cause, or simply our own or extended family.

Research shows that having meaning in your life is among the most important determinants of joy and fulfillment.

How can you find meaning in life? Nobody is going to hand you a roadmap, so you will need to figure this out by yourself. Your meaning in life has to come from within.

You can start by taking an inventory of the values that you hold dear to your heart. Is it honesty, altruism, tolerance, dependability, humility, openness, spontaneity or something else? What values does the ideal “you” represent?

You can also take the time to think deeply about what really matters to you — your family, your faith, your work, your community, or a social cause such as eradicating global poverty. You pick, it’s your life.

One of the biggest regrets of the dying is not leading a life true to themselves. Are you?

Photo by Christoph Krichenbauer on Unsplash

#5: Keep on truckin until you run out of a road

Striving to accomplish something you consider important has intrinsic benefits regardless of how old or young you are.

Setting goals aligned with your values and working hard to accomplish those goals gives you a sense of control and gives you hope about the future.

Many people associate achievement with work but it need not be so restrictive. For example, worthy goals could revolve around a social cause or teaching skills to a broader audience.

Accomplishing individual goals makes people feel good about themselves.

Building a string of successful accomplishments builds confidence in one’s ability to overcome obstacles and is key to overall wellbeing.

If you are confused about how to set up goals you might consider the SMART framework. These are goals that are:

  • Specific — you are clear in your head what you want the end result to be.
  • Measurable — there are criteria by which to can measure your progress. If you can’t measure success or failure, you don’t have a well-defined goal.
  • Actionable — progress always requires action. You want to focus on goals where your actions can make a difference.
  • Realistic — the goal has a reasonable probability of happening if you know what to do and execute.
  • Time-bound — there is an expectation as to when you will reach your goal. It could be long-term, or in the near term, but you must be clear about it.

#6: Eat, pray and love like Elizabeth Gilbert and prance around like Mick Jagger

You might have heard the saying that “your health is your wealth”. Or that without your health you got nothing. Clearly, such sayings contain lots of truth.

Physical and mental health are important aspects of enjoying life.

As individuals, we are born with a certain genetic makeup that we have to live with. Up to recently, most people believed that one could do very little to offset the good and bad of our genetic makeup.

Recent research has dispelled this notion. For example, in a study of over 13,000 Swedish twins heredity was only able to explain 30% of the differences in longevity. Other studies support the view that lifestyle choices are very important factors in determining overall health.

Lifestyle choices are under your control. Making the right choices in your environment, diet, exercise and mental stimulation can make a huge difference to your long-term health and wellbeing.

Your health is your wealth!

#7: Don’t worry about the weather in Kansas or for that matter Manila

All people like to feel like they are in control of their lives. But in reality, life often takes us on detours and expeditions that we never anticipated. Like the weather, many things are out of our control.

What we can control, however, is how we behave day in and day out and how we react to unforeseen events in our lives. We can elect to eat well, get enough sleep, exercise and not dwell on things we can’t control.

Understanding that much in life is random prepares all of us to deal with the unexpected by being resilient and savoring the good things that do happen to us.

According to Professor Sanja Lyubominsky, 50% of our general level of happiness is determined by our genes with an additional 10% accounted for by our life circumstances (how big our house is, our marital status, how much money we have, our job status, etc). The rest — 40% — is under our control.

You may not control all events that happen to you, but you can decide not to be reduced by them.

– Maya Angelou

Ruminating over stuff that you have no influence over is pointless. When bad things happen to you focus on what you change about the situation. If there is nothing you can do, accept it and learn from the experience.

Focusing on what we can control and doing the best that we can, gives us a sense of control over our lives and is associated with long-term wellness.

Photo by Luca Upper on Unsplash

You’ll never regret investing in yourself

Call me self-absorbed or selfish but anything that gives me more permanent joy and fulfillment is worth investing in. Not only am I better off but the people around me also benefit from the boost. Good feelings are after all contagious!

Do you want to continue drifting in life?

Or, do you want to take control?

Maybe up to know you have not understood what to do. You bought that promised life-altering online course, but the magic formula proved as elusive as getting a refund.

Time to try something different.

If you have learned anything in your time on earth is that seeking a life of joy and fulfillment won’t be all a bed of roses. It won’t just fall from the sky or be handed to you simply because of your ridiculously good looks.

It will take work of the right kind. Let the 7 research-proven behaviors be your guide.

Leading a life of joy and fulfillment is not a distant pipe dream that only a few on earth can aspire to.

Joy and fulfillment are within your grasp.


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The Great Retirement Hoax: Why Focusing On Money Alone Will Not Be Enough

You have watched the myriad of commercials depicting couples living happily ever after in retirement. Pictures of healthy looking retirees on a sailboat or couples holding hands while on a river cruise of the Danube River.

Fun and adventure all made possible by the gentle and skillful guidance of a friendly looking financial advisor. The implicit message is that for you to enjoy your retirement you need to have a large nest egg and the bigger the better.

What if you are nowhere near your “number”?

What if you don’t even know how much mula you need to live comfortably in retirement?

What if you are doomed to live a life of quiet desperation tucked away in some trailer park in Florida?

Or, maybe you could put your head down and save diligently. That could set you up for the next 30+ years of your life. Maybe, you could have a conversation with your spouse/partner about what you both want to do once retired.

These situations are everyday occurrences among the 10,000 Baby Boomers retiring every day in the US.

In a recent article in Forbes, Dr. Joseph Coughlin, head of the MIT AgeLab describes a conversation with a Lyft driver called Alex. It turns out that Alex and his wife, Lee, had been diligent savers and looked forward to the day they would both retire from their full-time jobs.

Their vision of retirement, however, turned out to be very different from reality.

According to Alex, the life they found waiting for them proved less exciting and rewarding than what they had anticipated. Something besides money was missing for Alex and Lee.

What you see is not always what you get

Many people assume that once they retire from their full-time career that they will automatically transition to a life of unbridled joy and happiness. All they need is enough money in the bank!

The financial industry equates money with happiness. The more money you have saved the better your life will be. The only problem you will have is not enough time to enjoy all the niceties in life.

Boat, beach house, Gucci loafers, golf memberships, Michelin-rated restaurants — all within your reach assuming you have the necessary mula.

Sounds enticing, right?

Unfortunately, this picture of retirement does not work for 99% of retirees.

It does not work,

  • Because money is not unlimited for most people.
  • Because, even if you have enough financial resources, research shows that money does not buy happiness.
  • Because, while money can buy material things such as Red Ferraris, it can’t buy health, peace of mind, friends or a sense of meaning and purpose.

Money can’t buy what you crave

How many people on their death bed wish that they had invested in the Google or Amazon IPO’s?

Money can’t mend broken relationships with family and friends. Money can’t make those regrets floating in your head magically disappear.

Money does not make your problems go away. In fact, academic research shows that oftentimes more money is associated with higher levels of stress.

Even rappers know the truth!

“Mo Money, Mo Problems”

Notorious B.I.G

When your day comes, it does not matter how rich or poor you are. All that matters is that you are surrounded by loved ones and that you are at peace.

Money is only as good as what you do with it

Just having money laying around will not do anything for your happiness. Otherwise being a Colombian drug lord counting rolls of $100 bills would be a perfect side gig in retirement (despite the legal peril).

You would think that having money would be great. And it is, but only when used in the right way.

Having money can buy lots of material goods. It can buy you a bigger house, better medical treatment, better nutrition, and more exotic vacations. But not happiness as happiness is not for sale.

It is easy to squander money in ways that don’t give us any lasting satisfaction, but isn’t the whole point of working hard and making money to be happier?

Having money is not the problem.

The problem is how we spend it and how we ignore other areas of our lives.

Spending money on happiness is a skill not often honed

There has been lots of research in psychology on the link between money and happiness. In general, the relationship is surprisingly weak especially as people move up into more affluent income brackets.

Nobel Prize winner Daniel Kahneman has found that beyond an income of $75,000 more money does not translate into more well-being.

While the tipping point may vary with cost of living conditions, beyond a certain income level, people’s happiness is not heavily influenced by money.

Some recent research in positive psychology by Dunn, Gilbert and Wilson offers suggestions for how to spend money in particular ways that will likely lead to more happiness.

Some of the more practical suggestions include:

  • Buying more life experiences rather than material goods — the key reason for this is that our brains tend to value experiences more than material possessions. Research has shown that humans have a great ability to adapt quickly to new things. This is called hedonic adaption and applies more strongly to material possessions rather than experiences.
  • Helping others instead of just doing things for yourself — humans are social creatures whose brains benefit not only from socialization but also from being part of something bigger than oneself. Useful activities for retirees include volunteering and mentoring. Psychologists call this the “helpers high”.
  • Focusing on smaller and more frequent pleasures rather than one-time extravaganzas — research shows that happiness is more influenced by the frequency as opposed to the intensity of positive experiences. Sure, getting that new sports car feels great at the moment, but after a while, the novelty wears off. Enjoying a daily nature walk with your spouse/partner on the other hand never gets old. People that are able to derive satisfaction from the simple things in life tend to be happier.
Photo by Aron Visuals on Unsplash

Your time is happiness in the bank

Yet another set of suggestions comes from psychology researchers Aaker and Rudd, these focused on how you spend your time.

  • Spending time with the right people — happiness is typically a group sport. People with long-standing social relationships have been shown to be happier than people lacking social connections. The quality of the connection is more important than the number of connections.
  • Spending time on the right activities — activities involving other people such as dancing, going out to dinner with friends, and taking a yoga class leads to higher wellness compared to activities done alone.
  • Gaining quality time by focusing only on what is essential and outsourcing the rest — even people in retirement can fill their days with “busy” work. But are they busy with the right activities? Greg McKeown in his book “Essentialism” suggests eliminating everything that is not essential and focusing one’s time on activities that are truly important. The rest eliminate or outsource. Spend your time wisely and you will increase your happiness.

There are other important things besides just money

Our focus on money matters blinds us to the need to plan for our non-financial lives.

Many people approach retirement with the idea that if there is enough money in the kitty then everything else is going to fall in place.

But is it smart to leave the other aspects of your life to chance? After all, many of today’s retirees could be spending 8,000 days in retirement according to Dr. Joseph Coughlin of the MIT AgeLab.

The transition from full-time work to retirement is fraught with difficulty for most people. Sure there is usually a short honeymoon period, but soon after indecision and anxiety rear their ugly head.

To be happy, humans need a sense of meaning and purpose.

To just be wandering around in life leads to wherever the wind is blowing.

  • Is that where you want to end up?
  • Do you still have some dreams and goals that you want to pursue?
  • What truly matters to you?

Maybe you want to give back to your community. Maybe you want to take care of your grandchildren and share your values with them. Maybe you want to move abroad and learn a new language and culture. Maybe you want to start a small business tied to something you are passionate about.

People want to feel fulfilled in their lives. To know that their presence on earth meant something to the people they came in touch with. That they lived according to their deepest-held values.

“Happiness is when what you think, what you say, and what you do are in harmony”

Mahatma Gandhi

You still need to drive to your destination

Your meaning and purpose act as your destination in life. But knowing your destination and having enough money to fuel your journey is not enough.

You also need to be healthy — physically and emotionally. Your body, mind, and spirit are all connected. Sure your body will age but your mind and spirit can elevate you even during the most trying times.

Good lifestyle habits and feeding your brain with stimulation lead to greater life satisfaction.

You may also want some friends and family along for the ride to keep you company during the good and bad times. Your social connections in life matter a lot! Cultivate your friendships and stay close to your family. You will eventually need them.

What you do during your long journey is also important. Focus on activities that give you enjoyment and pleasure. The key is doing, not just planning to do. Maybe you want to hone your music skills, work-part-time to share your experience, or tend to your vegetable patch. Just watching TV all day does not count.

And don’t forget that what you see along the way can also give you great satisfaction in your journey. It is not just getting to your destination that matters, but also how you get there.

There are always different paths to your destination. Choose the route whose surroundings are most closely aligned with your values and what you are trying to accomplish in life.

Your environment and lifestyle play a huge role in getting you to your destination. Good intentions are no match to a poor environment according to Stanford psychologist BJ Fogg.

Photo by Nathan Dumlao on Unsplash

Your money does not determine your fate

Giving money the power to shape your life is an easy way out. You know that designing the life you want is up to you and you only.

Sure, money can be a hurdle just like not having Gisele Bundchen’s or Brad Pitt’s looks. Very few hurdles in life can’t be overcome if you put your mind to it.

Sure money is necessary for living, but beyond a certain amount required for living focusing on other areas of your life will yield bigger pickups in happiness than adding another couple of winning trades to your 401(k).

Your happiness is about balance and congruence.

  • Balancing all important aspects of your life — health, mindset, social, finances, your activities, and lifestyle in general.
  • And making sure that all aspects of your life are in sync with each other.

Start with figuring out what you want out of your life and why it matters to you. You might want to visualize like Stephen Covey did what your 80th birthday party might look like — who would attend, what they would say, the music, the general vibe of the party, etc.

Once you know what matters to you and why the rest is execution.

As Tony Robbins likes to say “there are a million ways to get things done”. You just have to commit to action and following your path.

Will you get to the finish line of life with a smile on your face and a sense of fulfillment?

You may not get everything you wish for in life, but isn’t trying better than not trying?


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5 Things Experienced Investors Know About Surviving a Stock Market Crash

You have seen this movie before. And even if you are too young to remember you vividly remember your parent’s screams. Yes, the stock market is crashing and you are paralyzed with fear.

All that hard earned money you invested and puff, it’s all gone. Maybe not quite an Animal House “7 years down the drain” situation, but still a lot of it is gone. With it, there goes your worth as a human being.

It all happened in the blink of an eye. One minute you had visions of a life of riches — a red Ferrari, original artwork decorating the walls of your new penthouse apartment, and weekends shuttling between the Hamptons. and South Beach for a life of pure pleasure.

Waking up to a market mess really hurts. Reality bites! Not only do your dreams feel so far out of reach now, but what really upsets you is that you would have been better off spending all that money you invested on a fun trip to Vegas. Come to think of it, maybe Vegas would have been a better gamble!

Live and learn. That’s the last thing you want to hear, but you know that it is true. If you are going to invest you need to understand that stock market crashes are as inevitable as the New England Patriots making yet another Super Bowl.

I understand that you (like most of the country) may hate the Pats, but maybe the lesson is that experienced investors know something about surviving a stock market crash that you could really benefit from, but only if you are able to see through your fear.

“Everything you’ve ever wanted is on the other side of fear.”

– George Addair

Before you jump off the cliff keep these things in mind:

#1: It won’t always be so dark at 4 PM

Stock markets tend to go up over time. The average annual rate of return on the S&P 500 is 10% over the 1926–2018 period.

10% is a pretty good return that compounds year after year. Some years are much better and some are much worse.

The problem is never when things are going well. The problem is always when the stock market tanks and everybody assumes the end of the western world.

Your reptilian brain goes into an immediate red alert state. It assumes that nothing good can result from this stock market turmoil. It’s telling you to get out now!

The problem is that as sure as day follows night, history shows that stock markets recover from crashes to resume their upward growth.

That crash that was so feared at the time will likely look like a mere blip on the long-term historical price chart.

Crashes and corrections (smaller mini-crashes) make us feel terrible but are part of investing. Research from data provider Factset shows that historically the US stock market has had a correction of 10% or more in 55% of the years.

Experienced investors bear the scars of prior stock crashes. They also understand that while bad times are more frequent than anybody would like, these bad times do not last forever.

Experienced investors understand that markets are volatile but that over the long-run stocks are incredible wealth creation machines.

#2: You can’t score from the bench

Fleeing the markets at the first sign of distress does more harm than good. Stock markets are inherently volatile and you might as well get used to it if you call yourself an investor.

If you don’t put money at work in the stock market you can’t lose any money, right? Correct, but the flipside is that when stock markets go up you will be squirming in your Lazy Boy as all your friends hoot and holler about their stock portfolio gains.

Only by playing can you make a difference. Put money at work in the stock market and you will participate in the ups and downs of investing. The good news is that historically there have been many more ups than downs.

You can always play it safe and keep your money under your mattress but that safety is going to cost you manifold over the long-term.

Let’s play a little historical game. If you had invested $100 at the end of 1927 how much would you have at the end of 2018? $10,000, maybe? $25,000? Not even close!

If you invested in US stocks you would have $382,850. And that is after “surviving” several stock market crashes! Not bad, right?

But what if you were really cautious and stayed out of the game? Let’s say that you invested all $100 into US treasury bills. You know that unless the US government defaults you are getting your money back plus interest.

How much would you have at the end of 2018? Are you ready?

You would have a grand total of $2,063 according to the calculations of Dr. Aswath Damodaran at NYU.

Your caution has cost you dearly. Hot dogs or steak? Which one would you choose?

Experienced investors know that when things get really uncomfortable the only objective at the time is to stay in the game.

If you are not in the game, there is a zero percent chance of making up your losses and you surely will not participate in the good times.

The opportunity cost of not playing is high.

Photo by Joao Tzanno on Unsplash

#3: Nobody plays the perfect game anyway

When the s..t hits the fan (and it does for everybody) your first reaction might be to sell everything in disgust.

Apple, Proctor and Gamble, Netflix, Gamestop, those tiny speculative biotech’s that were going to make you rich — all sold with a vengeance. Good riddance. You are done with stock investing!

The problem with this approach is that you are likely “throwing out the baby with the bathwater”. You are letting your emotions run the show. You are not looking at the merits of the situation.

An experienced investor re-evaluates every holding based on their merit at that particular point in time. Sure, market conditions suck and losses are piling up. But remember these are only paper losses until you sell for real.

Maybe this stock market sell-off is pure panic and unrelated to economic fundamentals. Investors often behave like a herd of wimps all climbing over each other trying to be first to sell. An experienced investor will not panic and likely will watch the stampede from afar. Steady Eddie.

Other times something in the markets or economy has fundamentally changed and some of the stocks in the portfolio are no longer worth their original value.

What do you do?

Option A: Hope that the markets recover and then hope to find somebody that will take the stock off your hands?

Option B: Sell now because you guess things will get worse and your money could be best used somewhere else?

Option A is based on hope. Option B is based on research and the merits of the situation.

An experienced investor will not rely on hope. They will most likely face up to the fact that some of their stocks are no longer worth what they originally thought and that they need to sell.

Nobody likes to sell at a loss, but better to sell for 80 cents on the dollar than for 50 cents down the road. There is no shame in taking a loss if it furthers your cause in the long-term.

#4: Don’t listen to your gut when everybody else is throwing up

Fear is paralyzing. Fear leads to making poor decisions if left unchecked. But fear can also be used as a signal for taking conscious action.

You can use fear as the catalyst for triggering a course of action that, while difficult at the moment to execute, will bear fruit when everybody else is still lamenting their bad luck.

Experienced stock investors use the extreme fear of market investors as a wakeup call to pay attention.

If the mass hysteria is based on pure crowd psychology and not economic fundamentals, the wise know that money can be made at the expense of the fearful.

Planning ahead of time is crucial.

What can you do to take advantage of the fear of others?

  • Having enough cash on hand to fund the purchases — without cash, you can’t do anything. Borrowing to leverage during a period of stock market distress is not a reasonable or smart option. Just say No!
  • Having an idea beforehand what to buy from the weak hands. This is all about research. Focus on investments where even if you are a bit wrong in your assumptions of future growth and profitability there is a good chance of making money — Warren Buffet calls this his margin of safety. Buy the babies thrown out with the bath water!
  • Internal fortitude or “cojones” if you know what I mean. Departing from the herd mentality of doom and gloom is very difficult. Almost all inexperienced investors will flee at the first sign of trouble. Standing apart from the hysteria of the crowd takes belief and conviction.

Experienced investors understand that fear needs to be managed, not avoided.

Photo by Guilherme Stecanella on Unsplash

#5: When you are seasick focus on the horizon

Have patience. You never know how long markets will remain in a downtrend so be prepared for the long haul.

Most stock crashes and corrections are short-lived. If you knew that a correction or crash was about to happen you would bail in a hurry, right?

But the timing of when things fall apart is never known with any certainty. Many stock pundits have proclaimed an imminent collapse only to find themselves years later staring at a stock market twice as high as before. [Hard Fact — Nobody can time the next market crash]

Research by Factset shows that the average length of time from collapse to full recovery is 9 months after a 10% or more correction. That is not that long, but you would be surprised by how many inexperienced investors lack patience even if it means locking in a major loss.

In a sense, patience is a function of belief. Belief, in turn, should be informed by history and the context in which you are making decisions.

If you understand the history of stock market returns you would think twice about bailing when things get dicey in the short-term.

If you understand the history of global economic growth you would realize that business cycles — boom and bust periods — are part of our system of capitalism.

Experienced investors know exactly why they are investing in the stock market. You need to do the same.

What matters to you?

  • Growing your portfolio so that you can at some point in the future enjoy the things in life that make you happy?
  • Or, attaining immediate relief from the pressure that comes from stock investing and hiding under your comforter until everything becomes easy again.

“By re-educating the mind you can accept fear as simply a fact of life rather than a barrier to success”

Susan Jeffers

Photo by Andre Ouellet on Unsplash

It might be your first rodeo but you don’t need to stay down

Your fear is real. Nobody (except those braggy people with nothing at stake) likes a stock market crash.

You and your friends were enjoying the party and suddenly, swish, they turn the lights off and you can’t find your wallet or your dream date. How will your life ever be good again? No more Hamptons or South Beach.

Maybe all those people that have been whooping it up paycheck to paycheck had it right after all.

Fear is paralyzing. Everybody experiences the same thing. But only a few know what to do about it.

The fear when in a stock market crash is real but if you are able to overcome the signal that your nasty brain keeps sending to your sweaty palms, you are going to see daylight again and prosper.

Fight the fear knowing that experienced investors have found ways to survive market meltdowns. This might be your first rodeo, but they are still saddling up after many falls.

Go deep into your head. Remind your rational brain that things will get better and that everybody is going through the same negative emotions. Think clearly and if need be cut your losses, but whatever you do don’t beat yourself up.

Learning from the experience of others is a time-tested approach. This won’t be your last rodeo. Get up on the horse and next time around you will know how to conquer your fear. You may even profit from the fear of others.


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7 Regrets Happy Retirees Will Never Have

Life can be full of regrets. When you are young you might regret not asking somebody out, or not trying out for the basketball team.

In middle age, you might regret not taking that overseas assignment that was offered to you, or buying that bigger house in the suburbs that might have pressured your finances but also provided a great place for your kids to grow up in.

Many regrets are forgotten with the passage of time. You move on to different things, your priorities change and you get busy. Your eye is always looking ahead.

Sure, once in a while you may become nostalgic and peak in the rearview mirror. You may think back about what might have happened if …. But as quickly as that thought pops in your head, life intervenes and you are on to the next thing.

Busy, busy, busy.

As long as you are in the flow of life and things keep moving you spend little time thinking about potential regrets. You are much more focused on what you need to do next and what it will take to climb that mountain.

But when things slow down or you experience a major life transition those old regrets parked deep in your memory have a way of showing up again in vivid color.

Transitions mark the ending of something significant in your life

Research has shown that one of the least talked about life transitions is that when you stop working fulltime and enter into what we typically characterize as retirement.

The transition into retirement is a difficult one for most people. Surveys show that after a brief honeymoon maybe lasting a year or two, many recent retirees enter a period of uncertainty and introspection.

Regret as to what could have been and should have been is common at this stage in life.

Some retirees manage to navigate through the fog while others linger behind in negativity. Regret is one of the strongest human emotions but it does not have to take up permanent residence in our lives.

Plenty of retirees have managed to overcome feelings of regret by proactively taking control of their lives and choosing positivity over brooding or ruminating over what could have been.

What are some of the roadblocks or behavior patterns that happy retirees have successfully overcome?


#1 Compulsively checking the rear-view mirror while driving on a deserted highway

Having great memories of your career and raising a family is fantastic but living in the past when you might have 30+ years in retirement is a bit too much.

People that live in the past tend to be very risk averse and reluctant to try new things or experiences. They are always implicitly comparing the present with the past. Our memories are not always accurate and people with this mindset may be glorifying their past and holding too high of a standard to beat.

People that live in the past tend to prefer doing the same things over and over. For example, they often socialize with the same core group of people that they have known forever.

In contrast, happily retired people tend to seek new challenges and enjoy pushing their physical and mental boundaries. They also seek new social connections whether they are long lost friends or new relationships.

#2 Going to the Bellagio in Vegas and leaving it all up to chance

Living in the moment and living for short-term pleasure and enjoyment is occasionally fine.

Happily retired people allow themselves to live in the moment but only after planning the financial as well as non-financial aspects of their retirement. If their plans allow for the occasional splurging on a big trip or expenditure, no problem.

Spending time on passive activities such as gambling is also a big red flag. Not when done in moderation but not as a sport or when betting disproportionate amounts relative to one’s means.

Planning your life in retirement does not have to involve not having any fun or tracking every little expense. It does, however, require an idea of what you can spend and on what types of activities or pursuits.

Recovering from an unplanned big bash can be stressful if not catastrophic to your financial health.

Photo by Anoir Chafik on Unsplash

#3 Treating friends and family like the reusable Whole Foods bags in your trunk

Nobody lives forever. Relationships become if anything more precious as time becomes more finite.

Research also shows that as people age their circle of friends shrinks. Taking care of your existing relationships with friends and family becomes very important.

Equally important is staying receptive to new friendships and re-acquainting yourself with long-lost friends from your distant past.

You want quality over quantity in terms of your social connections.

Holding grudges toward friends or family is a recipe for regret. The more time that goes by the more space those regrets will take up in your head.

Maintaining a tight group of relationships as you age has been shown by the Harvard Study of Adult Development to be the most critical factor in explaining longevity as well as overall happiness.

#4 Loading up on “pico de gallo” as your vegetable portion for the day

It is easy to gain weight in the early days of retirement. Many people look forward to relaxation and adopt a sedentary lifestyle. Big breakfast, a bit of TV, lunch, nap and Happy hour at 4. All calorie enhancing!

If anything it is more important to take care of yourself as you age. Weight gain is associated with all kinds of health problems not to mention expending more energy to simply move around.

Happily retired people take great care of their physical and mental health by eating nutritious food, sleeping well, remaining physically active and pursuing challenging mental tasks such as learning new things.

The mind and body connection is well established by scientists. A healthy mindset coupled with healthy daily behaviors is important for optimizing your physical and mental health. Keeping a healthy weight is one of the keys to your health and happiness.

Photo by Rex Pickar on Unsplash

#5 Thinking like a lizard

Our primitive portion of our brain known is known as the reptilian brain. This part of the brain protects us from perceived threats. It assesses danger and reacts quickly through our reflexes, balance, breathing, and heartbeat.

The sole role of the reptilian brain is survival. Planning and rational thinking are not in its repertoire.

The problem is that many times our first instinctual response driven by the reptilian brain leads us astray in our modern world. We jump to conclusions without thinking rationally about the consequences or alternative courses of action.

Most of our daily behavior is unconscious, but many of our major decisions in life need to be thought over in a rational manner.

Finding space between emotion and action is a skill that high functioning people have mastered by identifying triggers, developing greater awareness, and deliberately choosing an appropriate behavior.

#6 Getting overly attached to your Lazy Boy recliner

Nothing against a good recliner. They are wonderful when watching a movie or a sporting event. They even look good these days and come in more colors than that old brown one in your basement growing up.

Occasional use is advised. Over-use is not. One of the main ways of managing the aging process is through exercise.

As Dr. Mark Williams illustrates in his book “The Art and Science of Aging Well” there need not be any major loss in overall body functioning as we age assuming that the individual pursues a reasonable program of cardio, strength and flexibility exercises.

Getting out of the Lazy Boy and exercising has great benefits for your physical health. The added bonus is the often forgotten benefits to your mental health. Exercise, for example, is one of the best ways to deal with stress.

#7 Using your TV as your alarm clock and mood meter in your house

Newly minted retirees often look forward to just relaxing and not having any demands on their time.

They want to do whatever comes to mind at the moment. The problem is that often times very little comes to mind and it becomes easy to just turn on the TV and wait for inspiration.

In surveys by the Bureau of Labor Statistics, the typical retire in the US spends 48 hours a week in front of their TV. Then you have internet browsing. Suddenly those 8 to 10 hours a day previously spent at work are now taken up by TV and the internet.

It’s not only the amount of time spent passively watching TV or on the internet but also the type of content being consumed. As they say in the computer world, “Garbage in, garbage out”.

But it is even worse as often times what you consume digitally has an effect on your mood. If you are watching a lot of news or financial shows you will probably start seeing problems all around you and your anxiety level will rise.

Happily retired people lead active lives. Replacing passive activities such as TV watching with getting out and experiencing life are great ways to get more juice out of your retirement years.

“When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us”

Alexander Graham Bell

Become your own Retirement Super Hero

Regrets are one of the most common emotions felt by people especially as they contemplate their own mortality.

We all have regrets living deep in our memories but not everybody lets regrets linger on and bring them down.

Happy retirees have successfully slain these self-made dragons. They have made peace with their past. They have taken action to resolve any lingering conflicts. Their daily behavior is consistent with their values.

Life is about taking action. You have the ability to influence the path you are on in your life regardless of how old you are or feel.

Learn from the behavior of people who have mastered the art of slaying past regrets.

Find your own retirement super-heroes. Maybe your superhero is somebody like Warren Buffet or Ruth Bader Ginsburg. Maybe it is somebody in your family. For me, it is my 90-year-old uncle that still travels the world on his own.


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Warning: Why Low-Cost ETF’s Won’t Protect You From Mr. Market

Market corrections are never fun. After a long period of uninterrupted stock market gains, Mr. Market finally decided last October to turn down with a vengeance.

From the peak in early October to late December Mr. Market (aka “the stock market”) was down about 20%. Since then the market has had a bit of a recovery and as of the second week in February it is down about 7.5% from the peak.

When you look at your Q4 brokerage statements all you feel is regret and shame. How could this have happened?

All your investments are in highly touted exchange traded funds (ETF’s) that track the stock market. Your buddy at Goldman told you so and you even read up on a couple of Morningstar reports.

You were counting on Mr. Market. Yet another scam but this time you are the sucker, not those poor sub-prime holders that took it on the chin during the 2008 Financial Crisis.

You weren’t trying to get rich overnight (maybe just a little) but who likes to throw 20% of your money away like that? Answer: Only a sucker!

Losing feels terrible. It’s not just about the money, but also that you were easy prey.

The only consolation is that you had lots of company.

Joining the winning team felt so good, but now you are no longer so sure

Everywhere you looked people were buying these ETF’s. You felt part of the tribe. And hopeful that finally, you had figured out this investment business.

Now you feel betrayed and frustrated. You thought that these ETF’s were safe.

Who cares that ETF’s have been the investment of choice since the end of the Financial Crisis. From 2008 to 2018 assets in ETF expanded more than 600%.

Wonderful, but how does that help you now?

You were barely familiar with this tribe except for some gibberish on CNBC and select subway ads you saw in passing, but you drank the cool aid anyway.

What are these ETF’s anyway?

Most ETF’s use a strategy called index investing. The strategy is super simple — replicating a portfolio or index of stocks or bonds designed by a third party such as the Standard & Poor’s company.

The best-known index in the US is the S&P 500. Two of the largest ETF’s replicating the S&P 500 index are SPY (offered by State Street) and IVV (offered by iShares).

Not only have ETF’s performed better than most mutual funds but they are substantially cheaper. Better performing and cheaper means more money in your pocket.

While the virtues of investing in this fashion have been known to large institutional investors for decades, the investment public at large was a little slower to catch on.

Global Focus Capital

It took a while to be discovered

It took the cult of personality in the form of Jack Bogle, the founder of the Vanguard Group, to make real people realize what they were missing out on.

Index investing for the masses took hold. Index investing in ETF’s became a religion. They called themselves the Bogleheads”.

The emergence of ETF’s allowed everyday people to participate directly in index investing. Bloomberg estimates that the US ETF market is $3.7 trillion in size and accounts for 40% of daily US trading.

ETF’s have democratized investing. What only very large pension funds could previously do is now at everybody’s fingertips.

Everybody can be a big boy now. Microcaps, emerging markets, dividend payers, low volatility stocks — all strategies previously unavailable or too costly now available to everybody at a click of a button.

You were eager to join the adults at the big table. You finally scrunched up some savings and took the plunge.

You bought several of the ETF’s recommended by your Goldman buddy. Now all you have to do is sit back and collect some coin, or so you thought.

Photo by Andrik Langfield on Unsplash

If ETF’s are so wonderful why do I feel so down?

Recent market events have left you wondering if maybe you were a bit hasty in choosing your investment tribe.

All you have seen since you bought your ETF’s is red in your accounts.

You do realize that the market has taken a tumble but weren’t your ETF’s rock solid and sure winners?

You feel like you are missing something.

Is there a secret that the investment gods are not sharing with you?

You ask your Goldman buddy what happened and you are met with a look of disbelief.

“Of course you can lose money if you are not invested the right way,” he says.

You are puzzled. “But I jotted down all the right ETF tickers on this cocktail napkin.”

Now your buddy looks at you with pity. “Dude, didn’t you first figure out your asset allocation?”

Asset, what?

“How much you own in stocks, bonds, and other stuff” he says.

“You can’t just let it rip on one thing — you need to be diversified”.

Always be thinking “AA”.

Nobody told you about this asset allocation or “AA” thing at least not in the context of investments!

“When the student is ready, the teacher will appear”

Old Tibetan Saying

Your lack of knowledge has cost you dearly. You barely knew what an ETF is and you still plunged into the deep end.

You were hosed on Day 1 and you didn’t even know it. The investment gods kept their asset allocation secret to themselves.

Photo by Mark Finn on Unsplash

What the Investment Gods didn’t tell you

As Warren Buffet has said before, “Investing is simple, but not easy”.

There are some simple truths to investing that even experienced portfolio managers need to be reminded off from time to time.

There is a link between return and risk:

The higher the return you seek the higher the expected risk of the investment. In terms of major asset classes, stocks tend to do better than bonds but with significantly higher risk.

Risk cuts both ways. During the good times you will make lots of money on your equity investments, but when Mr. Market takes a beating you’ll see lots of red in your accounts.

Key Lesson: The riskier the investment the more you can lose, know how much you are comfortable losing

Markets go up and down, sometimes violently:

That is what the pros call volatility. During normal times, prices move within a tight range. But when markets get nervous, volatility tends to spike up at the speed of light and even the savviest investor feels a pit in their stomach.

When markets go up being an investor is fun. Everybody is a genius on the way up. When markets go down many novice investors throw in the towel while the pros assess the situation for ways to cut risk and/or ways to profit from the panic of others.

Key Lesson: Volatility is part of investing, the worst time to sell is when you and others are panicking

Investment risk can never be eliminated but it can be transferred:

All asset classes — stocks, bonds, real estate, CD’s — carry risk. The risk emanates from the health of global economies and the preferences of investors as a group for postponing current consumption.

You as an individual can’t eliminate these top-down risks. You’re too small to do anything about it! Markets are composed of collections of individual investors all too small to eliminate risk on their own.

As a group, you are stuck with the risk. The only thing you can do is transfer the risks from one investor to another, but the size of the pie remains unchanged.

Key Lesson: There is always investment risk, but you can change how much risk you want to take

Most people focus on easy, not right (Hint: they are solving the wrong problem)

By focusing on what ETF’s to own you are disrespecting the investment gods. You are starting at the finish line and skipping all the hard work.

The truth is that you got it backward. You took the easy way out by casually asking your buddies for help. You skipped your homework and now you want to be an Academic All-star?

Here’s the thing.

  • The ETF’s you own matter a lot less than you think.
  • What matters is how much risk you are taking in your portfolio.

If you own all stock ETF’s, you are overwhelmingly taking equity risk. You and Mr. Market are fraternal twins.

When Mr. Market catches a cold, so do you. Nothing will save you from Mr. Market’s mood swings.

If you want to be like Mr. Market you are all set with your stock ETF’s. End of story. Learn to live with the rollercoaster.

But if you don’t like the moodiness of Mr. Market and see yourself as a more down to earth person you might want to dial it down a bit.

“Dial what down?” Your portfolio risk, of course. Or, in English how much you are willing to lose if Mr. Market catches a cold.

And for that to happen you need to include investments other than stocks into your portfolio. For example, lower risk bonds, CD’s, or real estate.

Got it little grasshopper?

Less risky investments like bonds mean you are less likely to lose money when Mr. Market sneezes.

This is the miracle of diversification sometimes called “the only free lunch in investing” by Nobel Prize winner Harry Markowitz.

Photo by William Warby on Unsplash

Think Big First, Then Small

Figuring out the asset allocation mix that suits you is the first step to take. It is also by far the most important one.

Always be thinking “AA”.

Large institutional investors have known this for a long time. At least since the 1990’s when a variety of academic studies showed that asset allocation accounts for over 80% of portfolio returns.

Isn’t it better to start with the 80% that counts?

Picking ETF’s may be more fun, but are you into fun or into making some dough?

Work on your big problem first by figuring out your asset allocation. Only then figure out what ETF’s you might want to use. Make sure you do it in this sequence.

The whole process of deciding what proportion of your portfolio should be in stocks, bonds, CD’s and other investments is called asset allocation or,(“AA for short).

It starts with figuring how much risk you are willing to tolerate.

How much risk you will tolerate in your portfolio should be your starting point, not getting a list of ETF’s from your buddy at Goldman.

You really should consider AA if you want to stay sane

Just know that whatever you do, picking the right stock ETF’s won’t help in the event of a correction. You will still be at the mercy of Mr. Market like everybody else!

What will help you smooth out Mr. Market’s mood swings will be holding a diversified portfolio of stocks along with less risky investments such as bonds, CD’s and real estate.

This may all sound a bit technical and complicated but you don’t t have to do this alone. Here are some options for you:

  • Buy a pre-packaged asset allocation strategy. If you want to take only a little bit of risk consider AOK. For a little more risk AOM might be right for you. And if you are ok being aggressive consider using AOA.
  • Invest your money with a robo-advisor such as Betterment or Wealthfront. Based on a short questionnaire these firms will suggest and manage a suitable asset allocation strategy for you.
  • Hire a registered investment advisor to fully customize a portfolio for you based on a comprehensive assessment of your needs and risk profile.
  • Do it yourself by first figuring out your desired asset allocation and then picking appropriate ETF’s or other investments to get exposure to the various asset classes in your portfolio.

It is time to get serious about your money.

Even small differences in return can compound to very large amounts over the long term.

Hot dogs versus steak — which would you rather have for dinner?

Having a solid asset allocation strategy in place is a great first step toward fulfilling your financial goals while allowing the moodiness of Mr. Market not to keep you wide awake at night.

Always be thinking “AA”!


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