Facts, Finance, and Feeling Good About Yourself

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Recently, I finished reading Factfulness by Hans Rosling. I discovered Rosling’s work nearly a decade ago when his YouTube video “200 Countries, 200 Years, 4 Minutes” went viral, at least among us data-dorks.

Finding Factfulness

Making the leap from Rosling’s four-minute video to his full-length book took some time. Unfortunately, it was time Rosling himself did not have, having passed away from pancreatic cancer in February 2017. Reminiscent of the late Gordon Murray’s inspiring collaboration with Dan Goldie on The Investment Answer, Rosling dedicated the last year of his life to completing Factfulness. He collaborated on it with his son and daughter-in-law, who published it in 2018.

Referring to “data as therapy” and “understanding as a source of mental peace,” Rosling urges us to employ “factfulness” to recognize that the world is usually better off than we think. With Bill Gates describing it as “one of the most educational books I’ve ever read,” I figured it was worth checking out.

Factfulness and Finance

How does factfulness work? Without it, we become overwhelmed by all the bad news going on around us. With it, the greater facts remind us that historical conditions have been even worse. In other words, we are making enormous progress, but close up, we can’t see it. Rosling explains:

“Journalists who reported flights that didn’t crash or crops that didn’t fail would quickly lose their jobs. Stories about gradual improvements rarely make the front page even when they occur on a dramatic scale and impact millions of people. … Safe flights are not newsworthy.”

It’s easy to connect these messages with the same ones you likely espouse for yourself and your clients as you help them embrace evidence-based investing.

A Higher Purpose

Beyond that, I took a greater message from the book. If your advice has been incorporating insights gained from behavioral psychology, it’s one you’re already familiar with, but it bears repeating: By losing sight of factfulness, it may often feel as if BIG acts, ENORMOUS effort and MAJOR improvements – the kinds we read about in the paper – are the only changes that matter.

All facts considered, this could not be further from the truth. Ordinary, everyday accomplishments are what Rosling describes as “the secret silent miracle of human progress.” Your and my small, unsung deeds are the streams that feed rivers that run to oceans of accomplishment.

So, whether it’s going that extra mile for your clients or dedicating some time to a community project, let’s each take on one or two good deeds – today, tomorrow, and the day after that. They don’t have to be huge; just make them a habit and, over time, that will do.

Give the Gift of an Amazon Review

Here’s one small possibility you may not have thought of: Give a good financial book a positive Amazon review.  

You see, some of my best friends are financial authors. So, I happen to know, one of the best ways you can help them increase their sales and readership is to review their books on Amazon. These days, a strong presence there is electronic gold, like being in the “featured books” section of a brick & mortar store.

Your review need not be novel-length itself. Two minutes, five stars, and a few sentences should do it. Go ahead. Pick some of your recent favorite financial reads, and go to it.


PS: Need another good book to read and review? Larry Swedroe and Kevin Grogan recently published a landmark book to help people get a grip on retirement planning at any age. It’s aptly entitled, “Your Complete Guide to a Successful Retirement,” and it’s got my five-star approval as well, plus it’s available to order in bulk with your own custom foreword.


Bogle’s Actual Folly

 

There isn’t an evidence-based investor or advisor around who doesn’t owe an enormous debt of gratitude to John “Jack” Bogle for popularizing index fund investing. He was able to see – and more importantly, stubbornly stick with – a vision of what it could bring to everyday investors, even when his peers were taunting his idea as “Bogle’s Folly.”

Hooray for Bogle; he not only got the last laugh on his detractors, it’s been an incredibly long and lucrative laugh. Well-deserved!

Which brings me to this week’s Wall Street Journal op-ed by Bogle, “Bogle Sounds a Warning on Index, Funds.” In it, he warns of potentially dark days ahead in an industry that could end up being dominated by a few massive fund managers.

Far be it from me to assume Bogle is wrong. There are certainly lessons to be learned from those who laughed at him the last time he stuck to his vanguard guns (pun intended).

That said, I do have a quibble with how he communicated his message. In particular, his data visualization, i.e., the charts and graphs, struck me as disturbingly disingenuous.

Continue reading “Bogle’s Actual Folly”

Evidence-Based Advisors: Here’s to Our “Do Unto Others” Community

A Wendy’s Wednesday Whimsy

As we mad-dash toward another new year, it’s a good time to reflect on fitting friends, old and new.

Take Joe Goldberg, for example, who I met when we both worked at BAM Advisor Services. I went independent back in 2009, while he remained on board as director of retirement plan services until earlier this year. Like me, Joe became his own boss … with a much wider break from past job descriptions. Joe is now in charge of trimming bodies instead of 401(k) accounts at his new fitness studio, TruFusion St. Louis.

I could not be happier for Joe; even back in the day, health & fitness were core to him, as he cajoled BAM conference attendees to get up in the wee hours of the morning to join him for a morning spin. The more sweat, the wider his grin got.

One thing we both took from our years at BAM was a deep appreciation for the “do unto others” mindset you get when you combine dedicated fiduciary advice with rational evidence-based investing. Pair the two together, and you inherently end up with a powerful perspective you can’t ever fully legislate or regulate into being – and that we may too often take for granted.

I realized that when Joe recently posted as follows on Facebook:

Isn’t that just such an “evidence-based advisor” thing to say?

Continue reading “Evidence-Based Advisors: Here’s to Our “Do Unto Others” Community”

A Rapid Roundup of Evidence-Based Advisor Networks

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A Wendy’s Wednesday Whimsy

Hey, sometimes this marketing stuff works. Between a few targeted initiatives and the “pay it forward” power wrought by word of mouth, I’m happy to report that my e-newsletter mailing list has grown nicely since I launched my independent business in January 2009. And the pace seems to be picking up. Checking my MailChimp stats today, I’ve welcomed about 250 of you to my mailing list this year; with a grand total of just over 800 subscribers to date.

Better yet, most of you are precisely the community I’m best set to serve: fee-only, independent investment advisors who are spreading evidence-based investing around the globe.

So, welcome, one and all! Are there times you feel a little alone in your evidence-based investing efforts? I thought it might be helpful to offer a rapid round-up of some networking opportunities deliberately dedicated to helping you and yours collaborate on this very subject. I’ve mentioned all of them in past posts, but time and attention spans fly by, so here’s a handy review: Continue reading “A Rapid Roundup of Evidence-Based Advisor Networks”

Are Your Clients Happy? Time Will Tell

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A Wendy’s Wednesday Whimsy

Hey, did you catch the recent study that’s been making its way around the popular press: “Buying time promotes happiness”? As perennially popular as happiness tends to be, the media jumped right on this one.

Of course one study – even an academic one – isn’t “proof” according to evidence-based rigor. But this particular one seems about as far-reaching as a stand-alone inquiry can get. It’s co-authored by five academic heavyweights from four universities. Plus it represents four academic disciplines across three countries – the U.S., Canada and the Netherlands. Contributors came from Harvard University’s Business School, the University of British Columbia’s Department of Psychology, Maastricht University’s Department of Finance, and Vrije Universiteit’s Center for Philanthropic Studies.

Go ahead and read the study yourself, but one of its compelling conclusions is as follows:

“[W]orking adults report greater happiness after spending money on a time-saving purchase than on a material purchase.”

I’ve seen a number of posts lately about the value of spending money on spending time … i.e., on having experiences instead of possessions. Tim Maurer recently covered this subject nicely, for example. The study I’m referencing suggests people also derive a lot of pleasure from spending money on saving time or, put another way, on avoiding experiences they’d rather not have, like housekeeping or yard work.

Or how about wealth management? While financial services didn’t seem to come up as a happiness-generating time-saver in this particular study, I’d be willing to bet there are plenty of people who would rather be mowing the lawn than figuring out how to finagle their finances.

So here’s an interesting idea for your marketing & communications: What if you presented the value you bring to your clients in increments of time instead of just the money? Here are some ideas to get you going.

Portfolio management services saves some time. After initial set-up, maybe you’re saving a family a couple of hours every month by managing their portfolio for them. That’s nice, but a decent roboadvisor can take care of that too, so this is just the beginning. Continue reading “Are Your Clients Happy? Time Will Tell”

Investing, Viking-Style?

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A Wendy’s Wednesday Whimsy

Sometimes when I need a brain-break between projects, I spend a few minutes on Facebook, viewing what everybody is up to, sharing a few “likes,” and moving on.

Usually, there’s no harm done. Then, a month or so ago, I stumbled across a hoax about a family who had allegedly held a fiery Viking Funeral that ran amok. According to Snopes, the piece was satire, never intended to be taken seriously. Unfortunately, by the time I saw it, that wasn’t so obvious. The author did such a great job – or maybe real news is sometimes so outrageous these days – that I fell for it, hook, line and sinker, and took it to be true. I also took it and shared it on Facebook.

Continue reading “Investing, Viking-Style?”

Don’t Be Me (Go To the June EBI Conference)

A Wendy’s Wednesday Whimsy

True story. When I was in my teens, my mother, brother and I went to see the Indy 500 world-class motorsports race. Through a family connection, we had darn good seats. But in case I got bored, I brought along a book to read. It was hard to ignore all the commotion, but I managed. Let’s just say I was not this kid.

 

 

In stark contrast to this delightful child (with the best laugh ever), here I am at 10 years old, impatiently waiting for my dad to finish his photography, so I can get back to it.

 

 

Then and now, if I’m not reading, I’m mostly writing. That might explain why, other than even thicker glasses, not much has changed. (I do wish I still had those awesome bell-bottoms!)

It’s also why I don’t get out much, especially to conferences where people gather and (gasp) speak to one another. Most of the time, I’d rather be writing, reading, or reading about writing.

Continue reading “Don’t Be Me (Go To the June EBI Conference)”

Evidence-Based Connections Between Flossing and Finance

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A Wendy’s Wednesday Whimsy

One of the best lessons from last fall’s Evidence-Based Investing Conference in NYC didn’t take place at the conference itself. It happened in the train station, where I met up for a couple of hours with “Annie,” a high school friend I hadn’t seen since the late 70s.

Had Facebook existed then, maybe we would have been better at staying in touch. It didn’t, and we weren’t. Fortunately, the bear hug Annie gave me when we reconnected promptly eliminated any time and distance between us. We jumped right back in where we left off, talking about nothing in particular and everything at once.

One of the things we talked about was this “evidence-based investing” jones that had brought me to the East Coast to begin with. Annie, who is a palliative care senior social worker at a major medical center, said something at the time about the comparative challenge of evidence-based medicine, controlled studies and practical treatments.

Continue reading “Evidence-Based Connections Between Flossing and Finance”

Wise Wording: More Accurate or More Approachable?

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A Wendy’s Wednesday Whimsy

Continuing to explore some of the questions I raised in my post-EBI Conference post, Questioning … Processing … Evidence-Based Investing, today I’ll touch on another question I posed, but left unanswered:

When describing investing to the general public, is it better to go with terminology that is more accurate or more familiar?

To be honest, I’m still not sure I have an easy answer.

More Accurate?

Clearly, the term evidence-based investing is more accurate. It’s closer to the essence of how most advisors with whom I collaborate are serving their investor clients.

After all, if the best available evidence suggested that stock-picking skills and market-timing reflexes generated true alpha over time and after costs … that’s what we’d be doing. Some might call that “active,” but the justification would still be evidence-based. Continue reading “Wise Wording: More Accurate or More Approachable?”

Evidence-Based Investing: Is It Literature?

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A Wendy’s Wednesday Whimsy

In my last post, Questioning … Processing … Evidence-Based Investing, I offered a mind dump of some of the questions I’ve been considering since I attended last November’s Evidence-Based Investment Conference.

I may or may not comment further on the entire list of questions. That’s where the whimsical part comes in. Today, I want to air my views about the first question I posed:

How important is the “evidence-based investing” name to begin with? Must it be tightly defined, or is a loose confederacy all well and good?

Personally, I’ve decided I can live with the loose confederacy. In fact, we are probably best served by it … if we embrace our inner Bob Dylan. Continue reading “Evidence-Based Investing: Is It Literature?”