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08 Jun
The 5 Biggest Financial Mistakes I See

Over the course of my 15 years in this industry, I’ve seen my fair share of successes, hurdles, and mistakes. While working with clients, when we talk a lot about what success looks like, it’s just as important to know the potential potholes and how to avoid making the mistakes others have made.

While there’s a long list of mistakes I’ve seen, I believe there are five crucial mistakes I believe are important to avoid making.

1. Paying Excessive Fees

Many people don’t realize just how much fees can add up. These include everything from investment fees to the fee you pay your advisor. Unfortunately, you can’t line up all the financial advisors and products on a shelf so you can compare them. It’s up to you to research on your own and figure out if you are paying premium, retail, or discounted costs on your investments. It’s essential to know this because over the course of your working career all the way through to your retirement, fees can add up and make a substantial dent in your savings.

You should be asking your advisor or financial institution how much you are paying in fees. You don’t want to lose your hard-earned money if you can avoid it. A financial advisor should be open about sharing with you how much they charge and what fees you can expect to pay for insurance, annuities, and other products.

2. Overlooking The Value Of Tax Planning And Tax Strategies

As Benjamin Franklin famously once said, “Nothing is certain except death and taxes.” While this is true (and they can have a significant impact on your financial plan), it is possible to mitigate the toll they take through strategic planning.

Tax planning helps you develop strategies to reduce your tax burden in a legal fashion. This can entail utilizing tax-favored investment strategies, deducting eligible charitable contributions, investing in a college savings plan, and more. Many people only think about their taxes come tax season. However, working on tax strategies with a professional throughout the year can help you save. Because I am a CFP and a CPA I bring financial planning and tax planning advice together. I strive to ensure my clients’ financial strategies are also tax efficient.

3. Underestimating Life Expectancy

According to the Social Security Administration, the average life expectancy for males who are 65 today is 84, and for females, 86. But 1 in 4 will live past the age of 90 and 1 in 10 will live past 95. (1) Based on these numbers, your retirement could easily last 30 years instead of 20. Since those ten years have the potential to make or break you financially, how can you plan for longevity and make the necessary adjustments to ensure a financially stable retirement?

Too often, I see clients try to plan for a set retirement time frame, but as much as we wish we could, there’s no way we can predict how long we will live. Retirees need to secure an adequate stream of income for an unpredictable length of time. If you plan to live to age 82, and you end up living until 92, how are you going to stretch your savings to last the additional ten years? It’s important to plan for a potentially longer retirement than you anticipate.

4. Reacting To The News

Short-term reactions to the news headlines or market volatility can result in crippling, long-term mistakes. In fact, a DALBAR study revealed that investors’ decisions were the biggest reason for underperformance. (2) Simply put, behavioral biases lead to poor investment decision-making.

Behavior can have a significant impact on the success of our investment returns. How we respond and react to market fluctuations — and, particularly, market exuberance and its inevitable crashes — affects our financial success. I try to remind my clients to focus on the long-term to avoid making irrational, short-term decisions. Remember, the markets are always changing. If you check your performance every time there’s a shift in the markets, you may end up feeling constantly overwhelmed and stressed. Maintain a long-term perspective and stay disciplined in your approach.

5. Forgetting About Inflation

Inflation is often considered a slow and silent assassin because so many people forget to factor it into their future financial plans. Over the last 50 years, the cost of goods and services has increased an average of 3.7% per year. Even if your spending habits don’t change, you need to prepare for annual increases in your spending due to inflation. If your monthly expenses are $3,000 today, they might be $6,000 in 20 years and even $9,000 in 30 years.

Don’t forget to plan for extra spending. Additional expenses always turn up in life, no matter how strictly you adhere to your budget. You want to make sure that you have the margin for extra spending, including travel, and you need to plan for the associated expenses in future dollars. This is particularly important when calculating your estimated needs in retirement, including housing, healthcare, and living expenses.

The Next Steps

Are you concerned that you may be making some of these mistakes or want to learn more about how to avoid them? I’m available to help. I strive to serve as a trusted financial partner with whom my clients feel at ease talking about their financial concerns and dreams. Along with instilling a sense of confidence, my goal is to provide them a comprehensive and personalized strategy that incorporates their objectives and outlines how they can transition from where they are today to where they want to be in the future.

If you’ve yet to make a financial plan for your future or have questions about your current strategies, book a free introductory meeting online! We’ll review your questions and discuss actionable steps you can take right away.

About Colleen

Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.


(1) https://www.ssa.gov/planners/lifeexpectancy.html

(2) https://www.advisorperspectives.com/commentaries/2015/04/08/dalbar-why-investors-suck-and-tips-for-advisors

12 May
Electronic Personhood

Electronic Personhood

Did you hear that the European Parliament has proposed to grant “personhood” status to intelligent machines (aka robots)? If you don’t believe it, here’s the exact language:

“At the least, the most sophisticated autonomous robots could be established as having the status of electronic persons responsible for making good any damage they may cause, and possibly applying electronic personality to cases where robots make autonomous decisions or otherwise interact with third parties independently.”

Electronic personhood would apply to robots that have the capacity to learn through experience and interaction, and also the ability to adapt their behavior and actions to their environment. The idea is to help sort out who’s legally responsible if a robot injures a person or destroys property. The manufacturer? The programmer? Or the robot itself? The “personhood” provision would not allow the robots to vote or give them the right to own property. The legal status is more like a corporation, which can be held liable for negligence or actual harm to others or the environment. It would allow the robot to “own” an insurance policy that would cover any potential damage it might cause.

Do you think this is a bad idea? If you do, you’re not alone. Recently, 156 experts in robotics signed an open letter to the European Commission expressing their concerns about the proposal. They worry that granting personhood to robots sets the wrong incentives for manufacturers, who would be absolved of responsibility for the actions of their newly-created legal entities. There is talk about a different kind of personhood for robots and intelligent machines, but that status hasn’t been thought through yet, and in any case, today’s intelligent machines probably aren’t smart enough to merit special status—yet.

Interestingly, the robotics experts think that autonomous legal status for robots is in our future; there is, after all, no reason to think that an aware mind must be strictly limited to organic beings. If an artificial being can pass the same language and behavioral tests as a human, then it will be time to think about a presumption of legal status. The European initiative may be ahead of its time, but it indicates that the day of us working and living alongside thinking, intelligent machines is not far off.



10 May
The Trade War that Isn’t—Yet

The Trade War that Isn’t—Yet

When most of us hear talk about something described as a “war,” we intuitively recognize that there could be very unpleasant outcomes on all sides. Wars have one thing in common: there is seldom a clear-cut “winner” amid the damage and destruction.

So when President Trump declares a “trade war” against the world’s second-largest economy, it’s natural that many people—including, apparently, a large number of investors—would feel spooked about what’s to come in our collective future. This explains why every escalation of words, and new lists of things that will be taxed at U.S. and Chinese borders, has provoked sharp downturns in the markets.

But what, exactly, is a “trade war?” Beyond that, what is a “trade deficit” and why are we trying to “cure” America’s trade deficit with China?

To take the latter issue first, every bilateral trade deficit is simply a calculation, made monthly by government economists, that adds up the value of products manufactured in, say, China that are purchased in, say, the U.S. (Chinese exports or U.S. imports), and subtracts the value of products manufactured in the U.S. that are purchased by Chinese consumers (U.S. exports or Chinese imports). The first thing to understand is that this is not a very precise figure. To take a simple example, Apple manufactures its iPhones in southern China, ship them to the U.S. for sale, and the value of each of the millions of smart phones is counted as a Chinese export to the U.S. market. Apple reaps extraordinary profits, but this is considered a net negative in terms of U.S. trade.

Moreover, the full value of each iPhone is considered on the import ledger, without subtracting out the value of the “services” that Apple provides. The software and design were, after all, created in the U.S., and are a large part of the value of the phones that people become so addicted to. But these financially valuable aspects of the phone, made in America, are not reflected in the trade numbers.

Beyond that, many economists question whether a trade deficit is a bad thing in the first place. Chances are, you run a significant trade deficit with your local grocery store; that is, it brings to your neighborhood the food you put on the table, and you exchange money for it. You import food, but the grocery story doesn’t import a comparable amount of things you make in your garage. Are you materially harmed by this economic opportunity that takes dollars out of your pocket and puts them in the hands of the grocery store? If you were, you might take your business to the grocery store further up the road, and run a trade deficit with a different establishment.

How does this relate to the U.S./China trade relations? Simple mathematics indicates that Chinese manufacturers are taking dollars from U.S. consumers, but they have to do something with those dollars to balance the ledger. That money finds its way into purchases of U.S. debt (Treasury bonds) or reinvestment in the U.S. economy, buying real estate or investing in domestic companies.

You fight trade wars with tariffs, which are simply a government tax on specific items when they cross the border. So when the Trump Administration announces the list of 1,300 different products that will become the targets of its tariff plan, that means that anyone buying those products will see their taxes go up—invisibly, in a higher cost of living.

The bigger potential damage comes when China retaliates in kind, and certain sectors of the U.S. economy have to pay the Chinese government a tariff for the privilege of selling their products to the Chinese market. China represents 15-20 percent of Boeing’s commercial airline sales, so a proposed 25% tariff could sting. More directly impacted are U.S. farmers. Soybeans represent the largest agricultural export from the U.S. to China ($14.2 billion worth of shipments in 2016, about one-third of the U.S. crop), and the Chinese consume a lot of U.S.-raised pork. When the tariffs were announced, pork futures dropped to a 16-month low, and soybean futures fell 5% overnight.

The larger concern is that China is preparing to shift its sourcing of agricultural products from the U.S. to Brazil and Argentina, and the retaliatory tariff makes this economically attractive for Chinese consumers. Will that business ever come back again?

If this has you worried, or searching China’s latest list to see which stock might be impacted as the rhetorical trade war escalates, it might be helpful to take a step back. So far, none of these tariffs have been levied; no actual shots have been fired in the trade war, which means it is not yet a “war” at all. The U.S. and China are trading retaliatory lists of potential targets, and there is some escalation in the value and extent of those lists. But when it comes time to actually fire those shots, the most likely scenario is a generous compromise that leaves us with the status quo.

Remember how worried the markets were when the Trump Administration abruptly announced new levies against global steel and aluminum imports? It turned out to be mostly bluster. A full 50% of all U.S. steel imports, from Brazil, South Korea, Mexico, Canada and others, were exempted from those tariffs. Larry Kudlow, the White House’s new economic advisor, said several times last week that there would be, in fact, no new tariffs, and no trade war with China. It will be months before any of the proposed tariffs could be put into place, which is plenty of time for Kudlow’s prediction to come true—and make all the panic sellers who drove down stock prices look a little bit silly.






08 May
Is Your Retirement Plan Ready for a Market Downturn in 2018?

By Colleen Weber, CFP®, CPA

Regardless of whether you are an avid reader of Market Watch or just tune in to the nightly news every now and then, you know that 2017 was a banner year for stocks. In fact, both the Dow Jones and the S&P 500 celebrated the launch of 2018 by reaching record highs1 and until the beginning of February 2018, we were experiencing the second-longest bull market since 1929.

But market fluctuations are a normal and expected part of the economic cycle. What goes up must come down. A recent 10% and 3.75% drop for the Dow Jones and S&P 500, respectively, is a testament to that fact that markets ebb and flow.2 It’s been less than a decade since the financial crisis hit, and the devastating losses are still fresh in many investors’ minds. It’s not surprising that many of us, particularly those nearing retirement, are worried about the impact a market downturn may have on their retirement plan. It’s easy to get excited and comfortable while the markets are soaring and returns are rolling in, but what goes up must come down.

Adhere to Proven Principles

If you want to feel confident during a time of market turmoil, be prepared and knowledgeable about how your retirement plan can handle market volatility. Here are a few ways you can accomplish this:

Have a Long-Term Perspective

The markets are always changing. If you check your portfolio performance every time there’s a shift in the markets, you will end up feeling overwhelmed and stressed. If you maintain a long-term perspective and stay disciplined in your approach, especially if you’re more than ten years away from retirement, you can feel confident in your plan.

Check Your Emotions

One of the most important rules in investing is to refrain from making emotional decisions. Multiple studies have analyzed how our emotions affect our investing results, especially when we chase above-average returns. A 2015 DALBAR study revealed that investors’ decisions were the biggest reason for underperformance. Simply put, behavioral biases lead to poor investment decision-making.

You also don’t want to start making major changes to your account in anticipation of a downturn. Erring too much on the side of caution too many years ahead of retirement may prevent you from gaining the potential returns you need to retire on your terms. For example, in a panic, some investors may sell stocks and pursue safer investments like annuities, bonds, and cash.

Maintain Proper Asset Allocation

We’ve all heard about the importance of diversification when it comes to maximizing our investments. But as you get closer to retirement, it’s even more important to make sure you are investing in the right types of holdings. This is the time to reduce your risk and ensure that you have the right asset allocation. In this way, you can minimize the impact that any one losing investment can have on your overall portfolio performance.

Rebalancing is also a key factor in keeping your portfolio safe. It’s not enough to create proper diversification and just walk away. You need to regularly analyze your portfolio to ensure that it still reflects your appropriate level of risk and that you haven’t become too reliant on any one asset category.

Create an Emergency Fund

This strategy is all about being conservative. While cash investments may not provide a lot of growth, having a cash contingency fund with at least one year’s worth of living expenses will protect you against having to sell investments at low values to free up cash. Examine spending patterns and find ways to invest even more into cash or cash equivalents, such as short-term bonds, certificates of deposits, or Treasury bills.

Know the Facts

Knowledge is essential for making informed decisions. The only long-term guarantee in investing is that there will be short-term fluctuations. We’ll experience bear and bull markets in the decades ahead just as we have in the past decades. Rather than fear change, focus on preparing for it. Avoid falling prey to the media, which tends to exaggerate. Instead, stick to the information you’ve gleaned from your financial professional and what you know about your personal risk tolerance and goals.

By using a disciplined approach, focusing on the long-term, and working with an objective advisor who understands investor behavior, you can keep your retirement plan on track and work toward your financial goals. Have questions or need help? Book a free introductory meeting online to discuss the steps you can take with your current retirement plan to increase profits and protect against loss, even when the market experiences a downturn.

About Colleen

Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.

1 https://www.reuters.com/article/us-usa-stocks/sp-500-tops-2700-on-tech-advance-dow-nasdaq-hit-records-idUSKBN1ES0YL

2 https://www.cnbc.com/2018/02/08/us-stock-futures-dow-data-earnings-fed-speeches-market-sell-off-and-politics-on-the-agenda.htm

05 May
Better Conversation-Starters

Better Conversation-Starters

Sometimes our social interactions seem to happen by default, and we don’t get much out of them. Consider the stock greeting: “How are you?”

What information are you likely to get when you ask this tired question? Tired answers, like: “Busy,” “fine,” “okay,” or “good.”

And what did you learn from that? How did you improve your relationship with the other person as a result of this exchange?

Okay, but what’s better? A recent article in Forbes suggests that you ask an authentic question. It proposes five:

What was the best part of your day today? (Or: What are you most looking forward to today?)

What work is most exciting you this week? (Good for getting information about work activities that give your team members energy.)

What new ideas are giving you energy lately? (Helps you think about opportunities for innovation.)

What have you learned recently that inspired you? (A great way to acquire new information and ideas that might inspire YOU.)

What is one thing we could do right now to make this day better? (Typically, you’ll find opportunities to make small changes that can have a big impact.)



29 Apr
The Long Reach of the IRS

The Long Reach of the IRS

You probably don’t spend a lot of time feeling sorry for a U.S. citizen named Meghan Markle, who is about to tie the proverbial knot with Prince Harry of England. But an article in the Wall Street Journal notes that Ms. Markle, and other American citizens who marry foreigners, face a lifetime of harassment by America’s Internal Revenue Service.

Suppose, for example, Ms. Markle’s new mother-in-law, who happens to be the Queen of England, lends her a tiara or diamond bracelet? She would need to tell the IRS about it. If she shares free rent for the residence at Kensington Place, its value could be reportable to the IRS as well. If (as is likely) Harry shares a credit card with her, and it is tied to a bank account that has more than $10,000 (which is also likely), this card and this account has to be reported to U.S. authorities.

It’s possible that none of these things will raise Ms. Markle’s tax bill. But there are severe penalties for not making the proper reports to U.S. authorities, possibly as much as half the total assets in an account. Assets that are held in trust can be taxed at rates up to 37%—and many English royal assets do happen to be held in trust. If there is income earned in England, or a pension, or a stipend for royal duties, that too is subject to U.S. taxes.

The article goes into some other odd provisions in the tangle of international financial requirements. If a U.S. citizen works in Australia, Australian law requires that person to have a retirement account. However, U.S. tax law treats the accounts the same as offshore trusts, with complex reporting rules.

Of course, Ms. Markle could simply opt out of U.S. citizenship, which thousands of others have done over the years. But she wouldn’t receive U.K. citizenship for a potentially significant waiting period, which means she would still be dealing with U.S. tax rules in the interim.

Enjoy the wedding!



26 Apr
A Better Place

A Better Place
A recent global survey of more than 18,000 adults in nine countries asked a simple question: “All things considered, do you think the world is getting better or worse, or neither getting better nor worse?”

As you can see from the graphic, the most optimistic country, regarding the future, is Sweden, and the depressing news is that only 10% of Swedes think the world is getting better. It goes down from there; other Norwegian countries come in at 8% optimistic, while 6% of Americans and just 4% of British and German residents think the world is becoming a better place.

As it happens, this small minority is right. An article in Our World In Data says that if we look back 30 or perhaps 50 years, we can see progress that might not be visible if our time frame is: “since last week.” The article, in fact, suggests that the world is becoming tremendously better in a variety of ways that are happening too slowly for us to appreciate.

For instance? The number of people living in extreme poverty—defined as living on less than $1.90 a day, adjusted for different price levels in different countries and for inflation (and also for subsistence farming, where the crops are given equivalent values)—has dropped from almost everybody in 1820 to 44% in 1981, down to fewer than 10% of global citizens in 2015 (the last year for which we currently have data). Isn’t that remarkable progress?

Another measure is literacy. In 1820, only about one person in ten older than 15 years could read and write. In 1930, the number was around 33%. Now, globally, 85% of our world citizens can read and write in their own language, and of course many people are now fluent in multiple languages.

When looking at health, the researchers say that we cannot appreciate how much better the world has gotten until we fully appreciate how terrible the past was. In 1800, about 43% of the world’s newborn babies died before their 5th birthday. Since then, we have enjoyed better housing and sanitation, better nutrition and more available food (which also made us smarter and taller), plus the germ theory of medicine, antibiotics and vaccines. Today, only 4.3% of newborns die before the age of 5.

The article also considers political freedom, which has shifted from virtually everybody living in colonial regimes or autocracies in 1900 to virtually everybody (except the Chinese and a few holdouts like North Korea, Iran and Saudi Arabia) living under a republican form of government today. Educational opportunities are far more widespread today than they were even 50 years ago around the globe, and in general the world is healthier, richer, smarter and wealthier.

Not understanding this enormous progress means that we don’t understand our own history very well—and, the article suggests, this robs us of a positive outlook on ourselves and the future. We should have more faith in ourselves; despite the obvious setbacks and speed bumps, the human species seems to be doing a great job of improving its conditions and making the world a better place.



18 Apr
The Most Expensive Cities in the World

The Most Expensive Cities in the World


Every year, The Economist magazine surveys the Worldwide Cost of Living, looking at 160 expense items across 133 countries.  There are a lot of interesting tidbits to be found in the report, but perhaps the most interesting is a list of the most expensive cities in the world.  In 2018, Singapore won this dubious honor.  After that, it was a tie between Zurich, Switzerland and Paris, France, followed by 4) Hong Kong, 5) Oslo, Norway, 6) Geneva, Switzerland and Seoul, South Korea, 8) Copenhagen, Denmark, 9) Tel Aviv, Israel, and 10) Sydney, Australia.


No American city?  The fact that the dollar fell against other currencies over the past year lowered the cost of living in places like New York (ranked #13) and Los Angeles (#14) when measured in global terms.


It turns out that there’s more than one way to measure “expensive,” however.  A survey of 293 global population hubs, conducted by Demographia, took each area’s median house price and divided it by the median household income for people living in each city, in their own currency.  If the average median income was $50,000 and the average home cost $250,000, then the median multiple would be calculated as 5.


Measured this way, American cities were well represented among the most expensive locations in the world.  Hong Kong was the least affordable major city in the world, with a multiple of 19.4.  Sydney, Australia (multiple: 12.9) finished a distant second, followed by 3) Vancouver, Canada (12.6), 4) Santa Cruz, California (10.4), 5) San Jose, CA (10.3), 6) Melbourne, Australia (9.9), 7) Santa Barbara, CA and Los Angeles, CA (9.4), 8) Honolulu, HI (9.2), 9) Salinas, CA (9.1) and Tauranga, Western Bay of Plenty in New Zealand (8.9).









14 Apr
How to Argue

How to Argue


These days, it seems like everybody is arguing about everything, and with perhaps a bit more… energy than in years past.  And it turns out that most of us are going about our arguments all wrong.


Author Daniel Pink has pointed out that most of the arguments going on today involve two people articulating their points in an attempt to convince the other person, while hardly listening to the arguments being made by the other person.  Both sides are assuming that the other person is ignorant of the facts, and try to provide the facts they think are missing—to a person who believes he or she has superior facts, and therefore is not likely to be convinced.


Pink points to several studies by two Yale professors which show that most people think they have a lot more facts, and know a lot more, than they actually do.  A lot of their “facts” are actually assumptions or beliefs, and of course there is no reason for people to self-evaluate whether they actually have a solid factual groundwork for what they believe.


This is actually an efficient way to proceed through most areas of our lives; why learn the details of something (like, for example, how a sewing machine works, or a cylinder lock’s mechanism) when you can just put them to use?  Why read the Constitution when you already know the gist of it?  As the world gets more complex, more and more assumptions are made based on fewer and fewer pieces of concrete knowledge.


The cost of this mental efficiency, Pink argues, is that it makes it harder to discern the difference between what we believe and what we actually know.


So how does this relate to arguing?  In your next argument, instead of trying to overcome somebody else’s beliefs with your own, and talking over each other without listening, invite the other person to explore deeply the facts behind their positions.  What are the statistics and where did they come from?  How would that proposal actually work in the real world, and where has it been tried before, and what was the outcome?


The goal, of course, is not to convince, but to soften the stance of the other person, and to be prepared to soften your own stance if it turns out you aren’t as confident of your facts as you imagined.  Arguing becomes more a matter of mutual understanding that the world is more complicated and nuanced than the absolute positions that are so often articulated—which is a start toward what the goal of an argument should be: better self-knowledge and better understanding of each other and the world.




How To Win An Argument

13 Apr
The Luck Factor

The Luck Factor


Why are some people wealthier or more successful than others?  The default explanation has always been that the wealthier among us are more diligent and/or smarter or more talented than the less-wealthy, so that the cream eventually rises to the top.


The problem with this explanation is that the statistical variation in wealth is far greater than could be explained by all the observed variances in work, talent or intelligence.


Meaning?  Eight individuals own as much wealth as the world’s poorest 3.8 billion people.  80% of the world’s wealth is owned by 20% of the people, and actually the wealthiest 1% own more than all the people who are below the 50% wealth level.  These are numbers that simply cannot be explained by variations in work habits; in order for somebody to earn billions of times what others make, that person would have to work billions more hours.  Similarly, our average IQ is 100, but there are no individuals with an IQ of 1,000, much less 1 billion.  So how is it possible that some people have billions of times more wealth than others, even though they are not billions of times more diligent or intelligent?


The answer appears to be luck.  A team of researchers at the University of Catania in Italy created a computer model of human talent and the way people use it to exploit the opportunities they encounter in life.  The simulations introduced random good and bad opportunities—that is, good luck or bad luck—across the spectrum of simulated life careers, which means some simulated careers got more than their share of good luck, others of bad luck, just as some got more or less intelligence or work habits.


The results almost exactly reproduced what we see in real life: that is, after 40 years, 80% of the simulation’s wealth was in the hands of 20% of the simulated individuals.  But when the researchers looked at the levels of talent programmed into these most successful individuals, they discovered that they were never the most talented, or most intelligent, or the most diligent.  Those factors all improved success scores, but they were almost irrelevant compared with the one contributor that explained most of the difference in wealth: the number of good luck opportunities compared with bad luck setbacks that the simulated individuals encountered.  The most successful individuals were the luckiest ones, and the least successful individuals were the unluckiest ones.


The research team is now turning its data set over to venture capitalists and those who fund scientific research, who are hoping that they can overcome certain biases when it comes to where to invest.  But for the rest of us, especially those of us who have been successful in life, this is perhaps an opportunity to take on a dose of humility, and experience gratitude for the opportunities we’ve been given over our working lives.





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