The Geometry of Wealth

Nearly 40% of American workers have not saved for retirement. Let me repeat: Tens of millions of Americans do not have a dime saved for retirement. Slightly more than half of workers are currently saving for retirement, but most of them haven’t saved much: 24% have saved less than $1,000, 47% have less than $25,000 socked away, and 65% have less th

As markets advanced steadily in the middle of last decade, investors placed about $660 billion of new assets into U.S. equity mutual funds. During and after the crash, they withdrew more than half a trillion dollars, even though there hadn’t been a better opportunity to buy in many years. We are our own worst enemy.

73% of Americans say money is the most stressful factor in life. It is more stressful than death, politics, or religion.

According to Timothy Wilson in Redirect, those who fare better in life “have better coping strategies in the face of adversity—they confront problems rather than avoid them, plan better for the future, focus on what they can control and change, and persist when they encounter obstacles instead of giving up.”44 Those who take the prepared mind serio

we engage with more and more information, but research suggests that the more information we gather, the worse choices we make.46 Further, the more information we gather, the more compelled we feel to make decisions. We don’t like to harvest new information but then do nothing with it. It feels like wasted effort. Finally, too much deliberation hin

Some of life’s more serious difficulties can be solved, in part, by writing a check. We can devote resources to help aging parents, support a wayward child, or deal with personal strife. Money gives us options for dealing with adversity. At lower incomes, being unable to address these means that not only do misfortunes persist, but we take on feeli

All modern investors serious about their long-term outcomes should consider the various forms of available pre-commitment strategies. Significant evidence shows that investors who avail themselves of auto-investment strategies in their workplace retirement programs tend to save more and do better over time.168 The routine is particularly useful dur

Taking more risk does not produce greater returns. Instead, taking more risk increases the variability of future outcomes. That’s not great bumper sticker material. Nevertheless, if there were a reliable relationship between more risk and bigger rewards, then technically you wouldn’t be taking more risk. Everyone would bet long shots all the time.

If your goal is to accumulate wealth over a long period of time, bonds are riskier than stocks because over multi-decade periods, stocks tend to return much more than bonds. The risk here is not meeting your goal. Conversely, if we define risk as short-term volatility or losing money quickly, stocks are clearly riskier than bonds. Safety or risk is