Know Thyself

WE MAKE ALL KINDS of financial errors, but three mistakes loom especially large: We use money in ways that hurt our own happiness, we derail our portfolio’s performance, and we spend too much and save too little. Why do we make these mistakes? Here are five things we need to remember about ourselves:

We’ll never be satisfied
We’re social creatures
We are too focused on today
We’re overconfident
We hate losing

In many situations, these traits can be enormously helpful. But when handling money, they can lead us badly astray. Want to learn more? Check out the five new sections I recently added to HumbleDollar’s online money guide.

I continue to update and revise other sections of HumbleDollar’s online guide. I recently updated all the numbers in the section devoted to the stock market, including data on the market’s economic underpinnings and historical valuations. I’ve also added new pages devoted to high-yield bank accounts, measuring volatility and why actively managed funds falter.

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