The most important part of every plan is planning on your plan, not going according to plan.
Have room for error when estimating your future returns. For his own investments, Housel assumes the future returns he’ll earn in his lifetime will be ⅓ lower than the historic average. So, he saves more than he would if I assumed the future will resemble the past. It’s his margin of safety.
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The Psychology of Money is a collection of short stories exploring the strange ways people think about money and teaches you how to make better sense of it.
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The idea is part of this collection:
Learn more about moneyandinvestments with this collection
How to develop a healthy relationship with money
How to create a budget
The impact of emotions on financial decisions
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