FINANCIaL
FIELd NOTES
How To Set Up Sinking Funds
One of the most difficult parts about sticking to a savings plan is that no month looks the same. It’s easy to budget for fixed expenses like your mortgage, phone bill, and subscriptions. With time, you can estimate some variable expenses like eating out and groceries.
But it is much more difficult to plan for irregular expenses like out-of-pocket health care expenses, replacing an HVAC, a big vacation, or a broken transmission…
Do Lenders Really Know How Much Home You Can Afford?
“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain” - Mark Twain
Individuals in the process of buying a home with financing usually get a “maximum loan amount” from the bank. Some assume this is a reasonable estimate for what they can actually afford…
How We Can Interpret Data Better
My favorite read last year was Factfulness by Hans Rosling. It provides insight into how to approach data - particularly data related to hot button issues. A lot of the book can be boiled down to “ask the next question.“
For example, the other day I saw this headline - “Pasta may be good for your heart health.” I love pasta as much as the next person but I was skeptical…
Mixing Investing With Entertainment Is A Bad Idea
I worry that the young adults who are dipping their toes into the investing world for the first time this year will associate investing with a gambling sort of rush.
But I also can understand where they’re coming from. It is exciting to see small investors make out like bandits in companies like GameStop, AMC, and others. But take caution – this has ended badly before…
Why Losing Feels Worse Than Gaining Feels Good
This idea that we feel losses more than we feel gains is commonly referred to as “loss aversion.” Renowned Psychology and Economist Daniel Kahneman says “losses loom larger than gains.”
Here are a few real-world examples…
How To Be Happier – Stop Adapting So Much
When my wife and I first got married, we lived in a one-bedroom apartment that was the cheapest option in our zip code. We literally went to apartments.com, sorted from least expensive, and then signed on the dotted line. Our room was sandwiched between habitual smokers. Our assigned parking spot was a 5-minute walk to the front door. They didn’t plow the parking lot when it snowed.
And we were so happy…