Imagine an iceberg. What do you see? A large chunk of white ice floating in the ocean, right?
I was reminded of the Iceberg Analogy this week – we focus on the 10% above water because that’s what we see, but 90% of the iceberg lies below the water keeping it afloat.
Financial planning is more than comparing and picking the “best” investments. While that may be the “exciting” part to focus on – it’s the 10%. In reality, 90% of financial success and building (and sustaining) wealth is behavioral – setting good habits and having the faith, patience, & discipline to stay the course when panic or euphoria arises.
(h/t to Simple Wealth, Inevitable Wealth by Nick Murray).
With that, here are the stories that caught my eye this week:
MONEY: Financial Planning For The Person Who Has Everything (Forbes)
If you woke up tomorrow with no possessions but the clothes on your back AND a bag full of money (equal to your net worth), what would you do? Do you start rebuilding the life you have now by buying the same house and living in the same town? What would you change – where you live, what you do, how much you save, how much stuff you own? Until we truly take the time to explore our response to these questions, the external forces around us will continue to have a strong pull on the direction of our money, our lives, and our dreams.
LIFE: Nudge, not sludge (Science Magazine)
Life is complicated. There are too many choices to be made in the course of a given day. Overwhelmed by the number of choices, sometimes we make the choice to do nothing, instead of choosing. “Nudges” exist to make decision-making less of an overwhelming task and help push us in the right direction to allow us to make better choices. Sludges, however, exist to discourage behavior that is in a person’s best interest, such as the endless amount of steps involved in claiming a rebate. Use the nudges, beware of the sludges.