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 […]
finance basics
My Wife and I Still Get an Allowance: How we use credit cards
Credit cards are an important part of me and my wife’s budgeting process. We needed a way to budget individually and as a family. The problem was using one card or a joint credit card account. It was difficult to keep track of who was spending what and the feeling of guilt every time either […]
I’m Divesting of All Peer to Peer Lending Investments
I started investing in peer to peer lending three years ago and immediately jumped into the research. I went through hundreds of simulations using online backtesting sites to determine what my investment strategy would be. Once I had a strategy, I used an auto investment process to invest in notes as they become available. But […]
Beating an Efficient Market
Investing in individual stocks or beating the market comes up regularly in conversations with friends, family, and students. The excitement of buying stock in the next big thing and beating the market by earning 1000% percent returns is a dream for anyone who has ever bought stocks. The concern with this dream is whether it […]
Paying Off Loans to Increase Cash Flow
Paying off debt with the highest interest rate first, then moving down the line to lower interest rates is common advice in the finance world. There is no question this plan will save you money in interest payments from a purely numeric standpoint. I even discuss this strategy in my cash windfall article. However, like […]
There’s a Recession Coming! Right?
Most people have heard the ominous lines of professionals, the media and even those who know nothing about the market issue the following warning: “The market has been up for so long, the next drop is right around the corner.” They will advise by saying, “It’s time to sell; we are due for a recession.” […]