How companies use behavioral economics to squeeze your wallet

September 10, 2010
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And sadly, they’re on the bleeding edge of research. You might have heard about all those little tweaks government officials have thought about implementing in order to make you healthier and save more. You could have companies automatically enroll employees in a 401(k) plan, rather than have them opt in, for example. Companies that have [...]

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Misconceptions of the Price-to-Earnings Ratio

September 4, 2010
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P.S.: This is a big deal for all you index fund buyers too. The Wall Street Journal ran a story earlier this week which made the case that price-to-earnings ratios don’t matter as much anymore. It’s a seductive argument. We’re in an age where a huge number of trades are made by quants, many of [...]

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Why do we want everything this instant?

September 2, 2010
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You can’t keep a kid from his marshmallow. Back in the ’60s, it was apparently O.K. to torture little kids. Just kidding, but one study came close. Here’s the gist. Stanford economists took four-year olds one at a time and put them in a room with a single marshmallow sitting on a table. The experimenter [...]

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What makes us cheat, and what makes us honest?

August 28, 2010
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And the dangers of “Fake it ’til you make it” We’ve all cheated in some way or another. Maybe you tricked your little sister into a bad trade at Monopoly. Maybe you copied an answer off the test next to you. Hopefully, those minor indiscretions never evolved into major betrayals at work or in relationships [...]

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Un-diversification: Does it ever make sense to put your eggs in one basket?

August 26, 2010
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And watch that basket. As I don’t have a copy of Pudd’nhead Wilson, I don’t know the context. But Mark Twain once wrote that you should put all your eggs in one basket…and WATCH THAT BASKET. You’re encouraged to diversify when you invest. A lot of employees sink more than half their 401(k) money into [...]

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Betting on another Black Swan

August 21, 2010
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Why it’s so hard to make money from the unpredictable Today, the Wall Street Journal carried a story about how mom and pop investors can profit from “black swans”—those seemingly impossible events that, when they arrive, completely disrupt the investment landscape. The term was made popular by Nassim Nicholas Taleb in The Black Swan a [...]

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How to make a vacation count

August 17, 2010
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Live happier, feel more relaxed, and restore your mental health. Have you ever taken a two-week vacation, come back to work, and felt stressed before the next weekend arrived? Me too. And it wasn’t because the vacation was miserable. Quite the contrary. Still, scientists and economists have long wondered why certain experiences that should leave [...]

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Caveman Economics: How ancient history stymies good decisions

August 14, 2010
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We’ve feared losses for 40 million years. How hard is it to learn to be a good investor? I’ve written a lot about the behavioral quirks that cause us to make major mistakes when we put our money in stocks and bonds, even though we know that we’d do a lot better to make different [...]

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Getting a raise: The negotiation

August 12, 2010
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Make more money without leaving a bad taste in your boss’s mouth. Ready to make more money? As I’ve written before, getting a bigger salary matters more than your asset allocation. It matters more than avoiding ATM fees. Heck, it matters more than your savings rate. If you can get a 20% bump today, you [...]

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Why you should ask for a raise now

August 7, 2010
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Hello Get Rich Slowly visitors! I’m flattered you stopped by. I’d be even more happy if you came by on your own! Here are a few reasons why you should:   1. This ain’t your typical personal finance blog. I don’t often tackle the basics of a Roth IRA or how to choose a money [...]

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