The principal-agent relationship is necessary for many of life’s adventures. When you purchase a house, you have an agent help you find the home of your dreams. When you own stock, you have a CEO act in your best interest to manage your company. Agency relationships are everywhere. However, while the agent provides many benefits […]
Archives for January 2018
Protect Your Assets With Umbrella Insurance
You have worked hard to accumulate a retirement account and a wealth of other assets, but the fact that you have this level of success can also make you a target. Your success makes you the holder of the deep pockets that others may be wanting to raid. What is Umbrella Insurance? Car insurance protects […]
Don’t Get Screwed Series
Conflicts of interest are my thing. My dissertation was on CEO bargaining in executive compensation contracts and my first academic publication dealt with how difficult financial advisor disclosures were to read. My favorite lecture to give students is on agency conflicts. Because of this, I see traps where people are or can be taken advantage […]
Tricking Yourself: The Case for a Big Tax Refund
Humans are not rational. Irrationality is the argument of behavioral finance, and the proof of this has been growing over the past two decades. Traditional finance theory is centered on rational humans participating in the markets. Rationality is a main driver of the efficient market hypothesis. From a personal finance standpoint though, the findings of […]
Is Working Allowed in Early Retirement?
There is this belief that once retired you cannot do another day of work…forever. It would be blasphemy. You can’t be retired and have a side job, that would be too much for the extreme early retirement disciples to handle. I see people blasted on blogs and forums for taking a part-time job or starting […]
Your Number: How Much You Need to Retire
Many factors need to be taken into account when deciding how much you need to have saved for retirement. Solving for this number is a significant step on your path to retirement, and the task can be as complex or as simple as you want it to be. This post is lengthy but includes everything […]