Personal Finance for Engineers (Github 2014)Adam Nash
This is the version of Personal Finance for Engineers given at the Github HQ in San Francisco on Feb 20, 2014. This version is made extra awesome by the appearance of octocat.
Personal Finance for Engineers (AirBnB 2013)Adam Nash
This is the version of Personal Finance for Engineers given on November 19 at AirBnB headquarters in San Francisco. It is largely the same content as the version for Twitter.
Personal Finance for Engineers (Github 2014)Adam Nash
This is the version of Personal Finance for Engineers given at the Github HQ in San Francisco on Feb 20, 2014. This version is made extra awesome by the appearance of octocat.
Personal Finance for Engineers (AirBnB 2013)Adam Nash
This is the version of Personal Finance for Engineers given on November 19 at AirBnB headquarters in San Francisco. It is largely the same content as the version for Twitter.
Personal Finance for Everyone (Stripe 2014)Adam Nash
This is the version of my talk, Personal Finance for Engineers, that I gave on February 20, 2014 at Stripe HQ in San Francisco. It has minor modifications to broaden the language for the whole company.
Personal Finance for Engineers (Stanford Computer Forum, Apr 2017)Adam Nash
This is the version of my talk, Personal Finance for Engineers, given at the Gates Computer Science Building at Stanford for the Stanford Computer Forum.
Personal Finance for Engineering (Pinterest, 2014)Adam Nash
This is the version of Personal Finance for Engineers, covering behavioral finance, liquidity, savings, compounding, and long term investing. It was given at Pinterest HQ in San Francisco on Jan 23, 2014.
Personal Finance for Engineers (Stanford CS 198, Nov 2015)Adam Nash
This is the version of my talk, Personal Finance for Engineers, that I gave at Stanford University on November 2, 2015 for the CS 198 Section Leader program.
Personal Finance for Engineers (Stanford Society of Women Engineers / SWE, 2016)Adam Nash
This is the version of my talk, Personal Finance for Engineers, given at Stanford on April 26, 2016. It was hosted by the Stanford Society of Women Engineers and the Stanford Society of Latino Engineers.
Personal Finance for Engineers (Stanford CS Forum, 2018)Adam Nash
This is the version of my talk, Personal Finance for Engineers, that I gave at Stanford University in the Gates Computer Science building for the Stanford CS Forum on February 8, 2018.
Stanford CS 007-01 (2019): Personal Finance for Engineers / IntroductionAdam Nash
These are the slides from the 1st session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on September 23, 2019. This seminar covers a survey of the students enrolled in the course, with an overview of the topics to be covered over the course of the series.
Personal Finance for Everyone (Stripe 2014)Adam Nash
This is the version of my talk, Personal Finance for Engineers, that I gave on February 20, 2014 at Stripe HQ in San Francisco. It has minor modifications to broaden the language for the whole company.
Personal Finance for Engineers (Stanford Computer Forum, Apr 2017)Adam Nash
This is the version of my talk, Personal Finance for Engineers, given at the Gates Computer Science Building at Stanford for the Stanford Computer Forum.
Personal Finance for Engineering (Pinterest, 2014)Adam Nash
This is the version of Personal Finance for Engineers, covering behavioral finance, liquidity, savings, compounding, and long term investing. It was given at Pinterest HQ in San Francisco on Jan 23, 2014.
Personal Finance for Engineers (Stanford CS 198, Nov 2015)Adam Nash
This is the version of my talk, Personal Finance for Engineers, that I gave at Stanford University on November 2, 2015 for the CS 198 Section Leader program.
Personal Finance for Engineers (Stanford Society of Women Engineers / SWE, 2016)Adam Nash
This is the version of my talk, Personal Finance for Engineers, given at Stanford on April 26, 2016. It was hosted by the Stanford Society of Women Engineers and the Stanford Society of Latino Engineers.
Personal Finance for Engineers (Stanford CS Forum, 2018)Adam Nash
This is the version of my talk, Personal Finance for Engineers, that I gave at Stanford University in the Gates Computer Science building for the Stanford CS Forum on February 8, 2018.
Stanford CS 007-01 (2019): Personal Finance for Engineers / IntroductionAdam Nash
These are the slides from the 1st session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on September 23, 2019. This seminar covers a survey of the students enrolled in the course, with an overview of the topics to be covered over the course of the series.
While making judgments and decisions about the world around us, we like to think that we are Objective,Logical, and
Capable of taking in and evaluating all the information that is available to us.
The reality is that our judgments and decisions are often
riddled with errors and influenced by a wide variety of biases.
The human brain is both remarkable and powerful, but certainly subject to limitations.
One type of fundamental limitation on human thinking is known as a cognitive bias.
People make many decisions. In decision-making scenarios people use rules of thumb (heuristics) to assist in decision-making. Often the heuristics lead to decisions contrary to the desired outcomes. This presentation outlines a set of cognitive biases common in decision making and how to prevent the biases or mitigate the consequences.
Psychology 102: Social processes, society & cultureJames Neill
This lecture provides an overview of several social psychology topics, particularly: what is social psychology, social influence (including conformity, obedience, and resistance), group decision-making, aggression, pro-social behaviour, altruism, conflict, and peace psychology
Building a Successful Organization By Mastering Failurejgoulah
The Etsy organization has grown by a significant amount over the last five years. As a company grows, more thought must be put into the techniques that it uses to communicate and deal with failures. This talk will cover several techniques that have helped foster a Just Culture, one in which an effort is made to balance both safety and accountability
Hello Everyone,
A big thank you for all the interest in this study guide. It was originally created as a fun introduction that took the Cognitive Bias wiki and tried to make it easier to memorize.
However, the authors of the wiki article have expressed some concern over the accuracy of certain entries. The document was taken down until that could be corrected.
But, people started asking that I release a new version with a warning. In response, a new "Beta version" of the document has been uploaded with a very strong warning label up front and improved citations. I make it clear that all the text is based on an evolving wiki page and that some of the cognitive biases in there might be incorrect wiki entries. My hope is that this will continue to get people interested in pitching in to help fix the Cognitive Bias wiki pages. :) When the wiki is in a good place, I will take the document out of Beta, and will remove the warning label.
If you are a cognitive expert, join “Operation Fix The Cognitive Bias Wiki!” Add your suggestion to the conversation here: http://en.wikipedia.org/wiki/Talk:List_of_cognitive_biases
Thanks for your interest!
Eric
P.S. . The images have been updated for better remixing and sharing rights. Rather than using permission based images, now all the images are public domain or free non-commercial use by anyone.
Stanford CS 007-02: Personal Finance for Engineers / Predictably IrrationalAdam Nash
These are the slides from the 2nd session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on October 3, 2017. This seminar covers behavioral finance & financial decision making.
Stanford CS 007-2 (2018): Personal Finance for Engineers / CompensationAdam Nash
These are the slides from the 2nd session of the Stanford University class, CS 007 "Personal Finance for Engineers". This seminar covers the topic of Behavioral Finance.
Learning Objective: Examine the methods that minorities can use for achieving financial success
A growing minority population presents opportunities for financial success. Financial success is about changing your perspective on wealth, how you grow it, how you maintain it, and how you preserve it. It first starts with getting vested into helping change the trajectory of your future. Wealth transfer is happening. So what can be done to deliver financial education and financial planning to minorities? How do we position ourselves to be a part of it and benefit from it? This seminar will help you to understand the behavioral pitfalls we fall into as a community; the personal, social, and mental roadblocks to obtaining wealth; and how we are a part of that ride to investing.
At the end of this seminar, participants will be able to:
a. Recognize financial fundamentals to building wealth.
b. Identify the factors that lead to lower wealth accumulation among members of underrepresented groups.
c. Identify personal habits and values that can impact a strong financial future.
d. Create an action plan for achieving financial goals.
Stanford CS 007-02 (2022): Personal Finance for Engineers / Behavioral FinanceAdam Nash
These are the slides from the 2nd session of the Stanford University class, CS 007 "Personal Finance for Engineers," given on October 4, 2022. This seminar covers the topic of Behavioral Finance.
Stanford CS 007-2 (2021): Personal Finance for Engineers / Behavioral FinanceAdam Nash
These are the slides from the 2nd session of the Stanford University class, CS 007 "Personal Finance for Engineers," given on September 28, 2021. This seminar covers the topic of Behavioral Finance.
Similar to Personal Finance for Engineers (Yelp 2014) (16)
Stanford CS 007-03 (2022): Personal Finance for Engineers / CompensationAdam Nash
These are the slides from the 3rd session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on October 11, 2022. This seminar covers compensation, equity & comparing offers.
Stanford CS 007-01 (2022): Personal Finance for Engineers / IntroductionAdam Nash
These are the slides from the 1st session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on September 27, 2022. This seminar covers a survey of the students enrolled in the course, with an overview of the topics to be covered over the course of the series.
Stanford CS 007-10 (2021): Personal Finance for Engineers / Additional Topics...Adam Nash
These are the slides from the 10th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered on December 7, 2021. This seminar covers student requested additional topics for the course, including bitcoin / cryptocurrency, derivatives, futures, options, private equity & venture capital.
Stanford CS 007-09 (2021): Personal Finance for Engineers / Real EstateAdam Nash
These are the slides from the 9th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered on November 30, 2021. This seminar covers real estate and related financial decisions: buying, renting, rent vs. buy, real estate investment, rental properties & tax advantages.
Stanford CS 007-08 (2021): Personal Finance for Engineers / Financial Plannin...Adam Nash
These are the slides from the 8th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered on November 16, 2021. This seminar covers financial planning, financial goals, couples & life insurance.
Stanford CS 007-07 (2021): Personal Finance for Engineers / InvestingAdam Nash
These are the slides from the 7th session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on November 9, 2021. This seminar covers compounding, types of investments, diversification, how to invest, and the four keys to good investing (all boring).
Stanford CS 007-06 (2021): Personal Finance for Engineers / DebtAdam Nash
These are the slides from the 6th session of the Stanford University class, CS 007 "Personal Finance for Engineers" on October 26, 2021. This seminar focuses on compounding, mortgages, auto loans, student loans, credit cards and credit scores.
Stanford CS 007-05 (2021): Personal Finance for Engineers / Assets & Net WorthAdam Nash
These are the slides from the 5th session of the Stanford University class, CS 007 "Personal Finance for Engineers" taught on October 19, 2021. This seminar focuses on liquidity, emergency funds, assets & liabilities, and net worth.
Stanford CS 007-04 (2021): Personal Finance for Engineers / Savings & BudgetsAdam Nash
These are the slides from the 4th session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on October 12, 2021. This seminar covers savings rates, income & expenses & budgeting.
Stanford CS 007-01 (2021): Personal Finance for Engineers / IntroductionAdam Nash
These are the slides from the 1st session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on September 21, 2021. This seminar covers a survey of the students enrolled in the course, with an overview of the topics to be covered over the course of the series.
Stanford CS 007-10 (2020): Personal Finance for Engineers / Additional Topics...Adam Nash
These are the slides from the 10th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered in November 2020. This seminar covers student requested additional topics for the course, including bitcoin / cryptocurrency, derivatives, futures, options, private equity & venture capital.
Stanford CS 007-09 (2020): Personal Finance for Engineers / Real EstateAdam Nash
These are the slides from the 9th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered in November 2020. This seminar covers real estate and related financial decisions: buying, renting, rent vs. buy, real estate investment, rental properties & tax advantages.
Stanford CS 007-08 (2020): Personal Finance for Engineers / Financial Plannin...Adam Nash
These are the slides from the 8th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered on November 3, 2020. This seminar covers financial planning, financial goals, couples & life insurance.
Stanford CS 007-07 (2020): Personal Finance for Engineers / InvestingAdam Nash
These are the slides from the 7th session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on October 27, 2020. This seminar covers compounding, types of investments, diversification, how to invest, and the four keys to good investing (all boring).
Stanford CS 007-06 (2020): Personal Finance for Engineers / DebtAdam Nash
These are the slides from the 6th session of the Stanford University class, CS 007 "Personal Finance for Engineers" This seminar focuses on compounding, mortgages, auto loans, student loans, credit cards and credit scores.
Stanford CS 007-05 (2020): Personal Finance for Engineers / Assets & Net WorthAdam Nash
These are the slides from the 5th session of the Stanford University class, CS 007 "Personal Finance for Engineers" This seminar focuses on liquidity, emergency funds, assets & liabilities, and net worth.
Stanford CS 007-2 (2020): Personal Finance for Engineers / Behavioral FinanceAdam Nash
These are the slides from the 2nd session of the Stanford University class, CS 007 "Personal Finance for Engineers," given on September 22, 2020. This seminar covers the topic of Behavioral Finance.
Stanford CS 007-01 (2020): Personal Finance for Engineers / IntroductionAdam Nash
These are the slides from the 1st session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on September 15, 2020. This seminar covers a survey of the students enrolled in the course, with an overview of the topics to be covered over the course of the series.
Stanford CS 007-10 (2019): Personal Finance for Engineers / Additional TopicsAdam Nash
These are the slides from the 10th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered in December 2019. This seminar covers student requested additional topics for the course, including bitcoin / cryptocurrency, derivatives, futures, options, private equity & venture capital.
Stanford CS 007-09 (2019): Personal Finance for Engineers / Real EstateAdam Nash
These are the slides from the 9th session of the Stanford University class, CS 007 "Personal Finance for Engineers" offered in November 2019. This seminar covers real estate and related financial decisions: buying, renting, rent vs. buy, real estate investment, rental properties & tax advantages.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
2. Yelp Disclaimer
This presentation and any opinions
expressed therein are not created,
sponsored, contributed to, or endorsed by
Yelp. The presenter and/or Wealthfront are
fully responsible for its content. By hosting
this presentation, Yelp is not providing or
endorsing financial advice and nothing in
this presentation should be construed
otherwise.
wealthfront.com | 2
3. Caveats & Preface
•
I am not a financial planner
•
This presentation is not financial advice
•
You would be extremely foolish to make investment
decisions based solely on the content of this
presentation or discussion
•
The opinions in this deck are intended purely to provoke
discussion & further education
wealthfront.com | 3
4. Why Personal Finance?
•
Poorly covered in traditional education, even
top tier universities
•
Not technically difficult, but signal:noise ratio
is terrible
•
Massive impact on your life
-
Money is one of the top 3 reasons
for marital problems
wealthfront.com | 4
5. Why “For Engineers”?
•
Understand / Prefer Math
•
Tend to make higher incomes early in life, thus face
questions sooner.
•
Tend to have complicated instruments, like stock
options, as part of their compensation.
•
Believe they are rational, which is actually a problem
when it comes to money
wealthfront.com | 5
6. Fast Five Finance Basics
1. Behavioral Finance Basics
2. Liquidity is Undervalued
3. Cash Flow Matters
4. The Magic of Compounding
5. Good Investing is Boring
wealthfront.com | 6
7. How many of you think
you are rational with
your money?
(show of hands)
9. Anchoring
•
People estimate answers to new /
novel problems with a bias towards
reference points
•
Example: 1974 Study
•
Most common examples:
•
Price you bought a stock at
•
High point for a stock
wealthfront.com | 9
10. Mental Accounting
•
Money is fungible, but people put it
in separate “mental accounts”
•
Lost movie tickets example
•
“Found Money” problem
•
Vacation fund & credit card debt
wealthfront.com | 10
11. Confirmation & Hindsight Bias
•
We selectively seek information
that support pre-existing
theories, and ignore / dispute
information that disproves them.
•
We overestimate our ability to
predict the future based on the
“obviousness” of the past.
(example: real estate)
wealthfront.com | 11
12. Gambler’s Fallacy
•
We see patterns in independent,
random chains of events
•
We believe that, based on series
of previous events, an outcome is
more likely than odds actually
suggest
•
Coin flip example
•
It’s because with human behavior,
there are no “independent” events
wealthfront.com | 12
13. Herd Behavior
•
We have a tendency to mimic the
actions of the larger group
•
Crowd psychology is a major
contributor to bubbles (believed)
•
Easier to be “wrong with everyone”
than “right and alone”
•
No one gets fired for buying IBM?
wealthfront.com | 13
14. Overconfidence
•
In one study, 74% of investment
managers believe they deliver
above average returns.
•
Positively correlated with High IQ...
•
Learn humility early
wealthfront.com | 14
15. Overreaction & Availability Bias
•
Overreact to recent events
•
Overweight recent trends
•
Studies demonstrate that checking
stock prices daily leads to more
trading and worse results on
average
•
Worse in high tech, because we
are immersed in “game changers”
wealthfront.com | 15
16. You have $1,000 and you must
pick one of the following choices:
Choice A:
You have a 50% chance of gaining $1,000,
and a 50% chance of gaining $0.
Choice B:
You have a 100% chance of gaining $500.
17. Now, you have $2,000 and you must
pick one of the following choices:
Choice A:
You have a 50% chance of losing $1,000,
and a 50% chance of losing $0.
Choice B:
You have a 100% chance of losing $500.
18. Loss Aversion (aka Prospect Theory)
•
We hate losses more than we love
winning
•
Average loss aversion is 3:1 (!)
•
Affects views on wide range of
situations, including taxes, holding
on to losing stocks, “sunk cost”
mistakes
wealthfront.com | 18
20. It’s OK to Not Be Rational
•
The key is that humans are predictably irrational
•
Know your own flaws, and you can set up systems to
account for them
•
Self-awareness is key
(yes, my Mom is a psychologist...)
wealthfront.com | 20
21. Liquidity
•
Almost universally undervalued
•
Strictly defined - it’s the
quantification of how much money
you can get, and how fast.
•
Liquidity is the power to take
advantage of great investment
opportunities
•
Liquidity is also, in the end, the
only thing that matters when you
need to pay for something.
wealthfront.com | 21
22. Liquidity & Returns
•
In almost all cases, liquidity is inversely
correlated with returns
•
Examples:
-
•
Cash = very liquid
Private equity = very illiquid
Common mistake: Safety != Liquidity
wealthfront.com | 22
23. Practical Outcome: Emergency Funds
•
Standard recommendation is that you
have 3-6 months of living expenses in
cash / cash-equivalents.
•
That number increases if you are in
highly volatile industry / career.
•
Worth considering length of time for
potential job search.
wealthfront.com | 23
24. Cash Flow
•
The ultimate secret to personal finance is
quite simple:
-
Spend less than you make
(on an ongoing basis)
•
Very easy to measure, but few people do.
Annual budget is a great idea.
•
Don’t forget to model in annual expenses
& “personal spending”
wealthfront.com | 24
25. Savings Targets
•
What’s the right number? 3%? 6%?10%? 20%?
-
•
There is no question - the more you save, the more
secure you are. Income comes & goes, but expenses
/ lifestyle are sticky!
A lot of models assume working 40 years, and
producing savings to generate 80% of working
income.
-
These models don’t actually match anyone’s real
world experience.
-
There are a lot of models out there, and rules of
thumb, but it’s important to run the numbers yourself.
wealthfront.com | 25
26. The Magic of Compounding
•
Not convinced that Albert Einstein said it was the
greatest force in the universe.
•
It’s the key to almost all long term financial planning.
•
Exponentials are bad in algorithmic cost, good in
savings returns.
wealthfront.com | 26
27. Simple Model
•
Rule of 72
•
In Excel, for each year, just use
=POWER(1+rate, year)
•
4% over 20 years is 2.19x
•
8% over 20 years is 4.66x
•
Careful: it works on debt just as well as savings...
in reverse!
wealthfront.com | 27
28. The Benefits of An Early Start
•
Compounding really takes off over long time periods
Years
Return at 8%
10
2.16x
20
4.66x
30
10.06x
40
21.72x
50
In most retirement planning
models, money saved between
ages 25 - 35 produces more
money than all savings between
35 - 65!
46.9x
wealthfront.com | 28
29. The Dangers of Debt
•
Bankruptcy is literally when you can’t pay your debts.
You can’t go bankrupt if you don’t have debt.
•
You will never find an investment that pays 8%
guaranteed, let alone 20%+
•
You will find *tons* of credit offers out there that will
charge you that.
•
“Bad” debt is toxic, your best return is to pay it off.
But emergency fund takes precedence.
wealthfront.com | 29
30. Good Investing is Boring
•
No one wants to be average, but with investing,
average is actually well above average.
•
You will beat most mutual funds, and a large majority of
your peers with simple, low-cost index funds.
•
Asset allocation explains ~90% of the variance between
fund performance
wealthfront.com | 30
31. Basic Asset Allocation
•
Different types of assets (stocks, bonds, etc) have
different volatility & return characteristics
•
There is an efficient frontier of combinations that
can maximize return for a given volatility
•
Complication: historical performance does not
predict future performance
wealthfront.com | 31
32. Simple Operating Model
•
2 hours of work per year.
•
Pick an asset allocation that is appropriate for your
emotional character & time frame & goals.
•
For each asset class, pick the cheapest index fund with
the lowest drift and best liquidity.
•
Rebalance every year.
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33. Recommended Books
•
WSJ Guide to Understanding Money & Investing
•
The Millionaire Next Door
•
A Random Walk Down Wall Street
•
The Essays of Warren Buffett
•
Common Stocks & Uncommon Profits
•
The Intelligent Investor
•
Devil Take the Hindmost
•
When Genius Failed
•
Against the Gods: The Remarkable Story of Risk
•
http://blog.adamnash.com/2007/02/14/personal-financeeducation-series-2-recommended-books/
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34. Disclosure
Nothing in this presentation should be construed as a solicitation
or offer, or recommendation, to buy or sell any security. Financial
advisory services are only provided to investors who become
Wealthfront clients pursuant to a written agreement, which
Text
investors are urged to read and carefully consider in determining
whether such agreement is suitable for their individual facts and
circumstances. Past performance is no guarantee of future
results, and any hypothetical returns, expected returns, or
probability projections may not reflect actual future
performance. Investors should review Wealthfront’s website for
additional information about advisory services.
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