In my last post I mentioned that extended warranties are one of the worst types of insurance you can buy. The odds are heavily against the purchase of extended warranties working out in your favor. In spite of this many people swear by them and purchase them every time they are offered. Why is this?…
I recently wrote about “The Four Laws of Success and Probability.” The third law states, “If…the odds are not in your favor, avoid the game – if it is impossible to avoid the game, play with great caution.” Insurance is a game where the odds are never in your favor. The expected value of any…
I recently wrote about how life is a game of probability, not luck. Money, like life, is also a game of probability. While there is nothing you can do to guarantee financial success, you can do things that will greatly increase your chances. Before getting into the strategies that will swing the odds in your…
After you get your own finances in order, teaching your children basic financial skills is one of the most important things you can do. I agree with Andrew Tobias, who stated the following in his book The Only Investment Guide You’ll Ever Need: “I’m keenly aware that they are your kids, not mine, so I…
Of course I believe in luck. How otherwise to explain the success of those you dislike? – Jean Cocteau, French writer and artist The most important questions of life are, for the most part, really only problems of probability. – Pierre-Simon Maquis de Laplace, French mathematician & pioneer in the field of statistics Meeting Phil…
My youngest child, Savannah, graduated from high school last week, and I found out recently that my oldest daughter, Kelsey, is expecting our first grandchild. One chapter of my life is ending and another just beginning. These events have prompted me to reminisce about when my children were small. As they were growing up one…
Adopt the pace of nature; her secret is patience. –Ralph Waldo Emerson, American author, poet, and philosopher Last year I lost my cell phone on an out of state trip. I prepare taxes out of my home as a side job and we were just entering the tax season. I knew my customers would be…
Drive-in banks were established so most of the cars today could see their real owners. – E. Joseph Crossman I have long thought that cars were a great destroyer of middle-class wealth. Recently I stumbled across some evidence confirming this. The evidence came in the form of a graph created by the Wall Street Journal…
The $50,000 Dollar Tennis Game Larry Kotlikoff is a professor of economics at Boston University, expert on Social Security, and weekend-warrior tennis player. Several years ago he was playing tennis with Paul Solman, the business and economics correspondent for the PBS News Hour. I don’t know who won the tennis game but it was definitely…
“Periodic outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. …
