Nov 202014
 

Tweet It’s Eddie, and it’s more interesting than last week. Last week I gave what was likely a boring example of a solution to sunk cost fallacy using the example of developing an oil & gas property.  This was based upon a previous post explaining the concept of sunk cost fallacies.  This week’s post gives more individual solutions to sunk cost fallacies and how to avoid them. Avoid careers with defined-benefit pensions – oft lauded by uneducated personal finance bloggers, jobs with DB pensions are rife with the sunk cost Read More […]

Nov 132014
 

Tweet It’s Eddie time, y’all. Last week, I described and we explored the notion of sunk cost fallacy.  There have been many business articles written about sunk cost fallacy, yet many propose no solutions other than to be aware of it.  In this week’s article, I will propose some ideas to overcome sunk cost fallacy. The best way to reduce the effects of sunk cost fallacy is to evade it altogether and not find yourself in a position where one has to contemplate it. One method is through modularization. This Read More […]

Nov 122014
 

Tweet Like our buddy Bill’s “problem” back in 1998, most accounting problems aren’t so bad. People huff and puff for a while, stuff looks like it’s about to get real, and then things go back to being normal again. We can look at accounting scandals in one of two ways. They’re either intentional, or accidental. The intentional case involves an outright fraud. The accounting department knows the books aren’t right, but either the CEO puts pressure on the department to hit a certain number, or the CFO does it in Read More […]

Nov 112014
 

Tweet Hi kids. Nelson here. Today we’ve got a guest post from Rob Pivnick, who works for Goldman Sachs. This automatically makes him the smartest person who has ever visited this blog by a factor of ten. He wrote a book called What All Kids (and adults too) Should Know About . . . Saving & Investing. I haven’t read it, but Rob seems pretty smart. I’m sure it’s a good gift for your favorite millennial. Take it away, Rob.  It’s a tiger. Or maybe a lion or wolf. And it’s Read More […]

Nov 102014
 

Tweet Say whattttttttt? Nelson, stop with the confusies. Your title is HARD. Last week, Bank of Canada Governor Stephen Poloz made headlines for suggesting that the kids these days should BUCK UP AND GROW A PAIR by taking unpaid internships, especially if they’re living for free in their parents’ basement. Here’s his full quote for context: … And the problem, of course, is the longer [finding a job after graduation] takes, then the more likely it is that a brand new graduate is more attractive to an employer and the folks Read More […]

Nov 062014
 

Tweet It’s the day after Hump Day, which totally doesn’t mean what I thought it did. So while I’m pondering that, you get Eddie.  One topic that I would like to explore more thoroughly is that of decision-making.  The psychology of cognitive biases and their implications are far important to personal finance than any book or post on RRSPs or index investing. A sunk cost is an expense that cannot be recovered; it is money already spent.  Conversely, a prospective cost is a future cost or represents monies that have Read More […]

Nov 032014
 

Tweet It’s a thing to end your blog posts with a bunch of hard-hitting questions, apparently under the guise to generate discussion. You put those bad boys in either in bold or italics (I’m helpful) because the author is serious about getting your attention, dammit. So you’ll forgive me for bolding and italicizing this next questions, but if I’m anything it’s a spineless product of peer pressure. Why don’t index investors just buy Berkshire Hathaway? The advantages of buying index funds have been discussed more than Jian Ghomeshi’s sex life. (WHOO Read More […]

Oct 302014
 

Tweet It’s your usual Thursday man, Eddie. He blogs here, but you knew that already. He also likes sloppy kisses.  This is a follow up to last week’s post about how banks are not trying to steal your money.  Instead, I offer some insights into choosing a bank. The first step to choosing a bank is to rid yourself of the notion that the bank is an obstacle.  A bank, and the people who work within it, should be viewed as partners.  In this way, the relationship between yourself and Read More […]

Oct 232014
 

Tweet It’s Thursday, which means it’s Eddie. He blogs.here. He promised this week’s edition is “particularly mean”. I’ll let you be the judge of that. If my count is correct, this is personal finance groupthink assassination number 6. If I had a nickel for every time I read an article or post from a personal finance blogger, even ones that have a large readership but whose authors are not particularly well read, about the sinister nature of banks, I could not buy anything of value since I stopped reading virtually all Read More […]

Oct 212014
 

Tweet Let’s start things off with a hypothetical situation. (I wrote something similar for Motley Fool last week, in the interest of full disclosure) Say you and I were hanging out. FINALLY, A FRIEND FOR NELSON! TAKE THAT, DAD. I offer you a deal. You put in $20, and I flip a coin. If it comes up on heads, I’ll give you $60. If it comes up on tails, I get to keep your $20. Would you play that game? I hope the answer is yes. If you could play Read More […]