O'Reilly logo

Family Inc. by Douglas P. McCormick

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 17

Know Yourself—Understand the Psychological Factors That Can Torpedo Your Goals

Bill, a good friend of mine, is a senior manager at a well-regarded financial advisory firm. Given that many of my recommendations are unconventional, he and I have had many lively debates over the years about our disparate views on personal finance topics. Bill has also been a great source of feedback for me while writing this book. His biggest objection to many of my conclusions is not that my analysis and recommendations are wrong, but rather that the average person is incapable of executing my plan. In his view, most of us aren’t disciplined enough to manage our finances as I recommend and, in particular, most of us don’t have the intestinal fortitude to stay the course when the market and my investment approach deliver a shocking one- or two-year loss.

Bill’s criticism of my plan is a legitimate concern. I believe, however, that through education and logic, people can be coached to the right actions. The preceding chapters have attempted to provide a logical framework for understanding the risks you face as the owner of Family Inc. The hope is that this framework nurtures the courage to stay the course during challenging investment environments. That courage can be strengthened by understanding certain psychological pitfalls or biases that can undermine rational decision making related to money. Consider the following 10 examples, each of which can be hazardous to your wealth.

Ownership ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required