On Further Thought

“HOW TO THINK ABOUT MONEY.” That’s the tentative title for a new book I’m working on. It probably won’t see the light of day until early next year, after I get the 2016 edition of the Money Guide out the door.

What’s the new book about? My goal is to pull together five strands that define my financial philosophy. First, the connection between money and happiness is surprisingly tenuous. That means we need to think carefully about how we spend and what goals we pursue. Second, our long life expectancy should change the way we handle money, including preparing for midlife career changes, and worrying less about dying young and more about how we’ll cope if we live an astonishingly long time.

Third, we regularly make mental mistakes and seem hardwired for financial failure. Result: Getting and staying on track financially takes great discipline, much self-awareness—and a little trickery. Fourth, we ought to take a broad view of our finances, one that encompasses our human capital, debts, investments and more, and which involves thoughtfully trading off one goal against another. Finally, the surest way to win the financial game is to focus less on scoring big gains and more on limiting losses, whether it’s the corrosive impact of investment costs and taxes or the devastation caused by panic selling during a market decline.