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Oh, dear latte! You have been crucified. Fear not, Mr. TFR at your service. Always keep me happy with your frothy texture and warm liquid company.

Stop The Press! Mainstream Loves Latte

Regular readers of TFR know how passionate (‘obsessed’ is apparently the right word, as my friends have helpfully suggested) I am about my morning cafe latte. The few minutes of liquid companionship I get with its characteristic warmth and aroma and its complex, rich taste intertwined with steamed milk – in a marriage made in […]

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Are You Biased? – Part 2

Please read Part 1 first to give you a background to this post.   This series is my attempt to look at important cognitive biases that prevent us from taking optimal decisions in life, career and investing.

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Image credit: andertoons.com

Our bias to conquer today is the Confirmation Bias.   As an investor or as an employee, we have all fallen victim to this at one time or another, or if you are like me, repeatedly!

We all like consistency in our life.  It simplifies our thinking and gives us a routine to follow.   While habitual consistency is our brain’s ‘low energy’ way to get through our daily life, you pay a heavy price for it when it comes to important decisions.   Confirmation Bias is our innate urge to look for those things that confirm your pre-conceived ideas/notions/decisions and ignore other things that raise red flags.   This bias dulls key facts that go against ideas and conclusions that we hold dear.  

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Gold: Relief When You Need It

Despite the millions of gold lovers around the world, including many among TFR family and friends, somehow I have never been attracted to gold’s charms.  I have often wondered about the fascination, bordering on obsession, of this yellow metal in modern society.  Granted, during the pre-industrial age, gold was treasured because it was a bona fide currency in many kingdoms and civilizations that passed through this world.

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House Fever: It’s Global

This post takes off from what I read in Millennial Revolution about a million dollar house-poor owner in Toronto, Canada.  The inference is similar to what I experienced personally in Washington DC.  We Americans and Canadians love home-ownership, and so do Australians from what I have heard.  In my business trip to Spain recently, I learned Spaniards also cherish home-ownership almost as a cultural mandate.  Then, I started wondering whether all this only holds true in large developed markets or does it apply even in developing markets. Perhaps only the developed world is living with contagious house fever?

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How to Recover From Personal Budget Setbacks

It is a dollars and sense decision.

Budget setback? Don’t worry.

The following is a guest post from my friend Ethan.  Given the retirement crisis, learning how to handle setbacks in personal budgets is relevant to many.  I hope you find it useful.

Effective budgeting typically lies at the core of a successful, long-term financial strategy. Whether it is a relatively informal register of income and expenses, or a detailed, categorical log of household cash flow, keeping track of your money increases financial security.

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Go Driverless!

The huge financial services industry and the much smaller community of Financial Independence and Retire Early (FIRE) bloggers differ on many fronts.  Yet, we all agree on one principle – sustainable withdrawal and retirement success through simulation models.   Of course, we all need to know our sustainable spending rate.  But, as we saw earlier, focusing solely on the simulated probability of financial success only increases the relative probability of a non-financial event wrecking our plans.   Today, we seek a new angle to one such non-financial risk factor that impacts your financial future.

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Get Mental

Fitness, that is!  In the professional world, we spend a lot of effort trying to look good.   This ‘looking good’ can happen by dressing, demeanor, dialogue or documentation (the last one is also part of how you are judged).   All of this looking good business can leave you tired and chasing the wrong habits.  There are coping mechanisms to retain your sanity and stay mentally fit.  

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A Peek Into a Real 1%er

Too rich for this 1%er?

Too showy for this 1%er.

It is not easy to peek into the mind of a top tier 1%er for most of us 99%ers, no matter how close we are to the cut-off line.   They travel in different groups, socialize with their own limited peers and generally frequent places that we don’t get admitted to or where the price of admission would not be justified even for those with ‘entry-level’ seven figure net worths.

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What is Enough?

Even this doesn't come along for the last ride.

Even this doesn’t come along for the last ride.

Even an eye-less needle doesn’t come with you on your last journey”  says an old proverb.  A sewing needle is a trivial item anyone can afford and its essential part is the hole or the ‘eye’ where you pass the sewing thread. If that is broken, the sewing needle is useless. You cannot carry even such a useless item on your final journey, leave alone the nice things and the people you love.  This is the inner meaning of that proverb.  It may be depressing but that’s the stark truth.  (more…)

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It Pays Rich Dividends

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English is an interesting language.   We bring financial concepts into daily expressions and vice versa.  All the English-speaking countries in the world trace their English language origin to some connection, if not a straight colonization, to The British Empire or the East India Company.   Many of the old British expressions have survived centuries and are used even today in many countries that have historical connection to the language.   This post takes an old British expression, back to the days of William Shakespeare (The Bard), that a good venture “pays rich dividends”.   Even as a poet, he knew about the rules and ruthlessness of business, seen in his classic The Merchant of Venice.    

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