Why Do Investments Outperform Investors?

Observing how people make investment decisions has been part of my life since 1975. Over that time the “gospel” of long term investing has been preached consistently, yet just like the messages in other preachings, many go their own way with suboptimal or disastrous results. In his post entitled “Investors Behaving Badly” colleague Russ Thornton shares the results of the most recent Dalbar study of “investor” results and how that differs from “investment results”; a difference of over 6% PER YEAR over 20 years. During this time the study points out the average holding period is 3 years. It’s important to keep in mind, that the average is just that, the average. What this means to me is, for every investor that held for 20 years, there must be a whole lot of folks that are into short term trading and bring the average to what it is.

Just like a sailor needs to adjust the sails for a change in the wind, being a long-term investor does not mean that you shouldn’t ever adjust your portfolio to align it with your current objectives, or get rid of an obviously poor performer. Yet, if you need to change everything frequently there may be an issue with your investment selection methodology. 

The other issue is fear. I’m reminded of a piece we put on the blog about a year ago entitled “Scary Times”. There is no question that the emotion of fear will often cause people to make decisions that don’t have favorable results. It seems like having a long- term strategy is so easy to do. Why doesn’t everyone adhere to it?  As business philosopher, writer and speaker Jim Rohn often quipped “The reason that people don’t do the easy things they can do to make them successful is because it is also easy not to”. It is easy to sit in cash on the sidelines, easy to move the money to something else that looks better “today” and a whole host of other emotional reasons that will offer temporary comfort OR exhilaration. Successful investing is not a game, but a process that if followed carefully and diligently leads to a high probability of success. Objective advice and guidance can often make the difference.

Are You Passing On Your Money Vaues?

When you were 20 or 25, what was your level of financial literacy? What did you think of when the nightly news mentioned Wall Street or the Federal Reserve? Did you even care about those things at that time?

Few young adults fully understand how wealth can be built. That’s a shame. Decades from now, many will wish they had started planning to amass wealth earlier in life. How can you encourage your children to start that process?

Help them start before they turn 18. If your child is a minor, there are still several ways she or he can get a head start on growing wealth. Besides the basic move of opening a savings account, it is possible for your child to open a Roth IRA. The I.R.S. sets no minimum age limit for IRA contributions; if your son or daughter has earned income from a job and filed taxes, he or she can open a Roth or traditional IRA with your assistance and contribute to it. Your child may also buy a government bond with your help, or buy equity shares or make a direct stock purchase via a guardian account or custodial account.

Encourage them to set life and financial goals. Why not? It is not far-fetched if your teen wants to become a millionaire; given inflation over time, we may need to be millionaires down the road. Even if your son or daughter simply sets a life goal – for example, to start a business someday or to graduate from a prestigious university - he or she will start to think about what that will take financially.

Wean them off plastic. As your children become young adults, the great lesson is a simple one – spend less than what you make. If they have to go into big debt, it better be for education’s sake and not for comparatively frivolous reasons. Remind them that it is possible to pay off debt and plan to build wealth at the same time.

Look back over your life for a moment. What shaped you more – the material things you bought when you were 18 or 21, or the experiences you had when you were 18 or 21? It is wiser for your son or daughter to spend money on an experience that may “pay off” in life skills and character development, rather than on a material item that will inevitably depreciate.

Convey that is not what you own, but what you do that counts. Hopefully, your son or daughter will start investing early – and sensibly. Some young investors like the thrill of day trading - of looking for the next hot stock that will be the talk of Wall Street. It is better for your son or daughter to learn principles of diversification from the start (and not retrospectively). Getting rich slowly is not a bad idea. Investing seriously means staying invested through market cycles.

Remind them of the power of compounding. If your child opens an IRA or 401(k) before age 30, that does so much in terms of retirement savings potential. Yet few young adults focus on these retirement savings tools. The tax information service CCH took a poll in 2007 and found that just 4% of employees aged 25 and younger were maxing out retirement plans. That same year, Charles Schwab conducte a survey and learned that only 40% of adults aged 26-40 were contributing to an IRA.⁴

Looking back, what did you wish you had known? Today is as good as any day to let your son or daughter know about some investment and asset-building principles. At first glance, it may seem boring to them – but making money sure isn’t. The more they know now, the more years they have on their side to grow wealth.

Decisions, Decisions, Decisions.....

We all make a variety of decisions throughout our lives that have an impact on our relationships, careers and yes, even our finances. If you’re like me you might find that we’ve made a “few” mistakes along the way. In our efforts we seek to make corrections along the way to avoid the same mistakes again. Solutions are often best discovered when the heat of the moment has passed and we are more open to looking at all the factors we should have had top of mind at the time.

For many, the last 18 months have financially been one of those “heat of the moment” times. Things seem much calmer now, and while I’m sure we will see difficulty ahead, now is a good time to review a portfolio strategy and prepare ourselves to meet our long-term goals and objectives. This article in today’s Wall Street Journal may help in avoiding common errors in building finances. No matter what the worthwhile endeavor, having a sound financial plan and carrying it out in a non-emotional manner is the high probability path to success.

Wealth Management Potpourri

Good choices are the recipe for financial and investing success. Unfortunately our brains need some training and re-wiring.

My parents told me that “watched pots never boil”. Will that happen with our inflation worries, Philip Brewer has some cautions about the CPI and differentiates it from inflation.

The current unemployment numbers are scary. It is not uncommon that unemployment numbers increase even after the economy starts to recover. It is often reported that the broader unemployment number is much worse. Worse than what is the question.

The current health care reforms in Congress a getting a lot of attention these days. Unfortunately the foundations of the financing for it are built on sand. Tax history shows what you tax goes away quickly.

Unemployment numbers slow their growth.

More “green shoots” for Housing. If the trend continues the economic numbers should also see improvement soon.

The best-laid plans for retirement sometimes don’t pan out according to this WSJ post. Flexibility needs to be brought into each financial plans for unintended detours.

Wealth Management Potpourri

The US is not the only part of the world seeing rebounding markets. Emerging markets have more to snap back from but the process has begun.

Our cultural beliefs about money shape our lives sometimes in positive or negative ways. I appreciated the thoughts in this post.

In order to be closer to investors the SEC has formed an Investor Advisory Committee.

Five steps to making it! The hard part is actually doing it.

Optimism is a good thing, right??

The steepness of the yield curve is causing mortgage rates to increase.

Wealth Management Potpourri

There is no denying that finances are a big part of our lives but looking through a different lens can give us additional perspective.

Living comfortable may mean different things to different people as pointed out by Rick Kahler in this post.

Five tangible signs the economy is improving.

Looking for a laugh? Try this video.

Your current and future tax dollars at work. A peak at the Fed's Balance Sheet.

Is the crisis over yet?

Wealth Management Potpourri

What impact will the swine flu have on the economy? Philip Brewer has some thoughts on the topic.

Those in need of mortgage modification are faced with difficult choices on how to proceed. This posting gives some important things to think about. Clearly we are in uncharted territory in this area and care and prudence should be exercised.

Bigger? Smaller? I really liked these thoughts on owning and how it relates to the bigger issues in life.

Signs of life are coming back into the housing market.

How's that 529 plan working out for you? It is probably wise to check.

The secrets to financial success are often simpler than people want to believe as pointed out in this interview.

Ed Yardeni shares his 12 reasons we should have positive expectations about the economy.

Intellectually most of us are aware that money alone does not bring a fulfilled sense of happiness. Philip Brewer (Yes! Twice in one Potpourri) has put together some observations on the topic.

Wealth Management Potpourri

An interesting perspective on the media, our expectations and who we are as a Society from F1 Strategy.

The recent completion of better than expected results of the California Municipal Bond sale is encouraging news for the credit markets.

Looking for an explanation of the market movements of late? This may help.

One of the bright spots in the past few months has been the appreciation of the US Dollar. This USA Today piece provides the reasoning.

I agree with Carl's view on Risk Tolerance Questionnaires and their misuse. Worth the few minutes of time to view this video.

This is a very thought provoking article on being prepared for old age and who really pays the price for poor preparation.

Scary Times

Recently the following piece "found me" and I felt I should pass it on.

Once upon a time there was a young warrior. Her teacher told her she had to do battle with fear. She didn't want to do that. It seemed too aggressive; it was scary; it seemed unfriendly. But the teacher said she had to do it and gave her instructions for the battle. The day arrived. The student warrior was on one side, and Fear stood on the other. The warrior was feeling very small, and Fear was looking big and wrathful. The both had their weapons.

The young warrior roused herself and went toward Fear, prostrated herself three times and asked. "May I have permission to go to battle with you?"

Fear replied, "thank you for showing me so much respect that you asked permission".

Then the young warrior asked, "How can I defeat you?"

Fear replied, "My weapons are that I talk very fast, and that I get very close to your face". "Then you get completely unnerved and, and you do whatever I say." "If you don't do what I say, then I have no power". "You can be convinced by me but if you don't do what I say, I have no power."

In that way the student warrior learned how to defeat Fear.

We are certainly in scary times and we need to understand and respect the fear that is present in the markets at this time. Yet, we need to also recognize the impact that Fear has on us and our judgment and how our decisions will impact our long-term financial futures. Can we all acknowledge and respect our fear and still chart a course to a better and calmer time? I believe we can and will.

King of the World!!

Being a long-term investor today clearly takes individuals with a great deal of discipline and a sense of history. What we need is a “King of the World” to change course. A King that could take drastic measures to get rid of the bad and accentuate the good that is going on. What would he do??

If I were King of the world I would....

Close down the financial media for 30 days! We do not need, nor are we benefiting from a 24/7 onslaught on our mental health! Reinforcing the negative never brings positive results and this time is no exception. These pieces are designed to grab attention not help and/or instruct. This information needs to be put in context with historical data to be converted to knowledge otherwise it is merely data. Wisdom is obtained by acquiring knowledge and filtering it. It's important to recognize that journalists are not necessarily experts.

Say positive things about the good things that have happened. President Obama got his way with the stimulus package. It is a huge package with lots of good things to come of it. Why isn't he and his administration being specific, transparent and expressing hope about the future? The “bully pulpit” of the Presidency is not being used to its fullest. There are many positives. We just aren't hearing about them.

Cheer the SEC on!! Get rid of the crooks and fast. Increase the penalties. Make them pay! We need a financial system we can trust. The current rules will work as the SEC is proving now. Provide adequate funding for enforcement of the rules we have.

Provide a market “pause” on high intensity days. The market is behaving like a 2 year old having a crying fit. The only thing that works in that environment is to take the child and let them be alone (time out). When the child has settled done and ready to play again, great!

Give everyone a Rip Van Winkle pill. If everyone could go to sleep for 12 months and wake up they would be much happier. As with every other “bad” thing, this too shall pass.

Declare a Global Day of Mourning for Our Previous Portfolio Values. It time to accept that the high water mark of our portfolio was not real and has passed on. Investors are going through a normal grieving process. What matters is what is ahead not the illusion of what was. Yes, our portfolios will ultimately recover and quite possibly well before we think they will but the denial, anger and bargaining will only be valuable when we reach a level of acceptance and move forward. Very sad but portfolios can and do move on as life must.

Declare a “Know Your Portfolio Day”. Promote the notion that people should know what's in the portfolio and how it is invested. Resources are there and Obama says we all need to take more personal responsibility for our lives. I agree but we need to promote the living daylights out of the resources available to do so. Incentives for saving and investing would go a long way to communicate the need to understand what we are doing or how to choose the advisors we engage to help us.

No, I'm not “King” of the world but all investors can be the “King” of their world and I'm convinced the world and the markets would be better off if they did.

Wealth Management Potpourri

Obama' Rhetoric is the Real 'Catastrophe'

Tracking the Household Balance Sheet

The White Swan

Create or Save

Sitting and Market Watching

The Second Ten Commandments

It's true! I'm a Harvey Mackay fan. I read his column each week. This weeks is particularly relevant to our current times.

The Second Ten Commandments

By Harvey Mackay

We all know about the original Ten Commandments, but have you ever heard of "The Second Ten Commandments"? These pearls of wisdom, sent to me by a friend, have been often attributed to Elodie Armstrong. I have taken the liberty of putting my spin on them:

I. Thou shall not worry, for worry is the most unproductive of all human activities. You can't saw sawdust. A day of worry is more exhausting than a day of work. People get so busy worrying about yesterday or tomorrow, they forget about today. And today is what you have to work with.

II. Thou shall not be fearful, for most of the things we fear never come to pass. Every crisis we face is multiplied when we act out of fear. Fear is a self-fulfilling emotion. When we fear something, we empower it. If we refuse to concede to our fear, there is nothing to fear.

III. Thou shall not cross bridges before you come to them, for no one yet has succeeded in accomplishing this. Solve the issues before you right now. Tomorrow's problems may not even be problems when tomorrow comes!

IV. Thou shall face each problem as it comes. You can only handle one at a time anyway. In one of my favorite "Peanuts" comic strips, Linus says to Charlie Brown, "There's no problem too big we can't run away from it." I chuckle every time I think about it because it sounds like such a simple solution to a problem. Problem solving is not easy, so don't make it harder than it is.

V. Thou shall not take problems to bed with you, for they make very poor bedfellows. Just remember that all your problems seem much worse in the middle of the night. If I wake up thinking of a problem, I tell myself that it will seem lighter in the morning and it always is.

VI. Thou shall not borrow other people's problems. They can better care for them than you can. I must confess that I have broken this commandment because I wanted to help someone out, without being asked, or I thought I was more equipped to handle a situation. But I wouldn't have to deal with the consequences, either.

VII. Thou shall not try to relive yesterday. For good or ill, it is forever gone. Concentrate on what is happening in your life and be happy now! We convince ourselves that life will be better after we get a better job, make more money, get married, have a baby, buy a bigger house and so on. Yet the accomplishment of any of those events may not make any difference at all. The Declaration of Independence says we are endowed "with certain unalienable rights that among these are life, liberty and the pursuit of happiness." You are responsible for your own happiness.

VIII. Thou shall be a good listener, for only when you listen do you hear ideas different from your own. You can win more friends with your ears than with your mouth. Hearing is one of the body's five senses, but listening is an art. Your success could hinge on whether you have mastered the skill of listening. Most people won't listen to what you're saying unless they already feel that you have listened to them. When we feel we are being listened to, it makes us feel like we are being taken seriously and what we say really matters.

IX. Thou shall not become "bogged down" by frustration, for 90 percent of it is rooted in self-pity and will only interfere with positive action. Seriously, has frustration ever improved a situation? Better to take a break, collect your thoughts and redirect your attention to a positive first step. Then go on from there.

X. Thou shall count thy blessings, never overlooking the small ones, for a lot of small blessings add up to a big one. We all have something to be grateful for, even on the worst days. Hey, you're still on the green side of the grass, aren't you?

Mackay's Moral: These may not be chiseled in stone, but try them—they'll make your life less rocky.

Wealth Management Potpourri

The Big Fix

Tax Cheats or Tax Idiots?

Financial Stability: 4 Easy Steps to Get Your Finances in Order

US Senate agrees to dilute 'buy America' provisions

Earnings: The Sting of the Strong Dollar

What's Your Financial Philosophy? What It Means To Live Below Your Means

The Great Reset

Housing Fix? Republicans Push for 4 Percent Loans

Who Does Your Investment Advisor Work For?

Make 2009 Your Year

This is the year! Yes, you can make 2009 the year you alter your financial life for a better financial future. Let's look at some steps you might think of taking with the goal of financial freedom in mind.

No, we're not talking about those ridiculously obvious steps the usual articles recommend, like "write your goals down" and "set a budget". Let's go past the clichés and get into the real issues.

Look at your income source, your expenses and your debt. How do you earn income? If you earn it from one source, is there effectively a ceiling on it, or is there real potential for your income to rise in the next few years? Now look at your core living expenses, the ones you can't avoid (such as a mortgage payment, car payment, etc.). Can any core expenses be reduced? Investing aside, you position yourself to gain ground financially when income rises, debt diminishes and expenses stay (relatively) the same.

Maybe you should pay your debt first, maybe not. If you are a business owner or a professional, for example, you'll likely always have some debt. Your ultimate goal should be to build wealth – and you can plan to build wealth and minimize debt at the same time.

Some debt is "good" debt. A debt is "good" if it brings you income. If you buy a rental property, you're paying a mortgage, but that's considered a "good" debt because you're getting passive income from the rent payments. Credit cards are "bad" debts.

If you'll be carrying a debt for a while, put it to a test. Weigh the interest rate on that specific debt against your potential income growth rate and your potential investment returns over the term of the debt. If the interest rate on that debt looks like it will outpace your income growth and investment returns, then you should really think about paying that debt down fast, because you can't afford that interest rate.

Of course, paying off your debts, paying down balances and restricting new debts all works toward improving your FICO score, another tool you can use in pursuit of financial freedom (we're talking "good" debts).

Implement or refine an investment strategy. You can't refrain from investing, even when the bears are out. You're not going to retire on the relatively small elective deferrals from your paycheck; you're going retire on the interest that those accumulated assets earn over time, plus the power of compounding. Investing can also potentially bring you passive income. Consistent investing, this year and in years to come, has the potential to help you improve your financial life.

Manage the money you make on your way to financial freedom. It's amusing: all these Internet gurus tell you they have a method to make you "financially free" or "debt free", but few tell you how to manage the money you make. Their not-so-subtle message seems to be "succeed and live lavishly" – if you make it financially, you've earned the freedom to blow it all on cars, boats and luxuries.

This is a classic nouveau riche mistake. If you simply accumulate unmanaged assets, you have money just sitting there open to risk – inflation risk, market risk, even legal risks. Don't forget taxes – while not technically a "risk", they are a threat to your money. The greater your wealth, the more long-range potential you have to accomplish some profound things – provided your wealth is directed.

If you want to build more wealth this year or in the near future, don't neglect the risk management strategy that could be instrumental in helping you retain it. Your after-tax return matters even more than your investment return, so risk management should be part of your overall financial picture.

Request professional guidance for the wealth you are growing. A good financial advisor will really help to educate you about the principles of wealth building. You can draw on that professional knowledge and guidance this year – and for years to come.

We Are Still In Control

2008 has not been a fun year for investors is an understatement of significant proportions. When fear takes over, bad things happen, and the events of August through November of this year were a textbook example. It seems as things have calmed down to some degree and that is a good thing. Looking back I'm reminded of an acronym for fear:

False

Evidence

Appearing

Real

Of course, the sentiment displayed was that the country was headed into a massive depression and there was no hope of a course correction. Clearly that sentiment has "cooled off" dramatically and we have begun to focus our attention on the future and more positive events. As the bailouts and stimulus packages start to gain traction my sense is fear will dissipate even further as it has so many times in the past.

One part of the "fear complex" that takes investors over is the sense of a loss of control over their futures. Dreams of retirement being seriously questioned and/or the fear of a dramatic change in our living conditions are clearly at the center of the feeling of loss. Yet, some of these fears may not be realized. We can choose to focus on the things we can control and not focus on the things we can't control.

We can't control:

The media and their incessant need to gain our attention and only focus on the most glaring headline they can imagine to get our attention. Our world is not a 30 second sound bite and there is always more to fully understand any important situation.

How people react emotionally
to situations is also something we can't control. When encountering a difficult situation with another individual who is reacting emotionally to a situation is to try to calm them down and see things more calmly. If they can't you need to allow them some time to "cool off" before having an intelligent solution being discussed. The "market crowd" is not different. Once "it" has had a chance to cool down from an emotional state logic and value will become the focus.

We can't control the economic numbers either. Over time economic numbers will surprise us both positively and negatively. These numbers are cyclical and will ebb and flow over time largely to our and the countries benefit but one number good or bad should not change our long-term view.

We can (or your advisor can) control:

The Inputs and Outputs of our portfolios is largely within our control. I have been very impressed with many clients who have trimmed their portfolio withdrawals to reflect the current environment and those who have stepped up their savings investment as well. While difficult to do at times these activities can go a long way to accomplishing the goal.

The research in and effort to seeking out reasonable long-term investment opportunities and values.

The discipline to not be sucked in by the emotional factors of the market. This is the easiest way for us to keep focused on what the long term plan is. What happens over a 120 day period is not likely a sea change that will forever change the world. Keeping our perspective is what the successful investor does better than anyone else.

Careful Evaluation
of what you need to do to meet your short and long-term needs and the best way to get there is vital to understanding and a staying on a course that will be successful. Your plan may have been dealt a setback. What is necessary to get back on course? It may be much easier than you think!

Buying investments at reasonable valuation is not only within our control but should be a mandate during trying times.

Few would argue that difficult times bring unusual opportunities. Focusing on what can be controlled is vital to ultimate success.

Does Wealth Mean Happiness?

Does money actually buy a degree of happiness? In this recessionary holiday season, it is worth thinking about the effect money has on our lives. What role does money play in our happiness? Is that role overrated?

Most psychologists and sociologists will tell you that our happiness comes largely from social interaction. But studies indicate that there is a direct correlation between wealth and a kind of mental health.

As Pearl Bailey immortally quipped, "Honey, I been poor, and I been rich. And let me tell you, rich is better." Having a well-paying job, being successful at what you do – these are definite cornerstones of self-esteem and contribute to happiness.

So is Warren Buffett happier than we are? The math is not quite that simple. American wealth grew remarkably in the late 20^th century, but surveys found that Americans on average weren't any happier than they'd been decades before.

A 2002 study by psychologists Edward Diener, Ph.D., and David Myers, Ph.D. documented greater happiness among residents of wealthy countries versus poor countries. But they found that once individuals in both types of nations gained the money to pay for basic creature comforts, happiness did not markedly increase along with wealth thereafter. A second 2002 survey by psychologist Tim Kasser, Ph.D., showed lower personal well-being in individuals who "bought into" messages of materialism and consumerism.

Does spending money make people happy? It depends on the purpose. Perhaps you've heard of the "hedonic treadmill" theory, an economic theory which holds that the middle-class and the affluent exhaust themselves and diminish their happiness through endless pursuit of the latest material goods. Americans are proudly competitive, and can't help but measure their wealth in relation to their friends and neighbors. We have to have more than the next guy.

Does spending money on others make people happy? Yes, according to the results of a study published in March in Science Magazine. Researchers took a sample of 600 Americans. They instructed 46 to spend a $5 or $20 bill on a particular day. Some were told to spend the money on others, and the study found that they were happier at the end of the day than the ones who spent the money on themselves. The study also tracked 16 workers who got profit-sharing bonuses, and observed that employees who gave a majority of their bonus to others ended up happier than those who spent it on themselves. In fact, the main forecaster of happiness was not the size of the bonus, but how it was spent. The Science study also discovered that spending more money on gifts and charity correlated with increased happiness.

Are we ultimately only as happy as we want to be? Perhaps. Researchers now increasingly feel that people have a genetic "baseline" or "set point" of happiness, and deviations from this norm are temporary. In other words, how the stock market does doesn't rattle our basic level of happiness. Even life-altering tragedies or seeming miracles don't ultimately budge us much from the norm. (Studies of the brain indicate that people with more activity in their left prefrontal cortexes seem to be happier than some others.)

Recently, University of Virginia psychology professor Jonathan Haidt wrote a classically-rooted book called The Happiness Hypothesis. Haidt observed that within a year of their life-changing experiences, "lottery winners and paraplegics, have both, on average, returned most of the way to their baseline levels of happiness." He feels that happiness can grow from "vital engagement" with other people and one's passions, and from a spiritual and moral "coherence" in yourself and your life.

How about some Gross Domestic Happiness (GDH)? No joke: since 1972, the government of Bhutan has dedicated itself to boosting GDH, Gross Domestic Happiness, via a platform of equitable and sustainable economic growth, cultural preservation in the face of the West, good government, and environmentalism.⁴ Other nations have studied Bhutan's example; in fact, conferences have been held on the concept in Bhutan, Mongolia and the Netherlands.

Wealth Management Potpourri

Why invest in the stock market?

How to Create a Treasure Map to a Rich Life

Investing In Art

A Tale of Two Fridays

Real GDP Drops In Q3

Never Mind the Fed – Watch LIBOR

Commercial Paper Flashes Signals of Turnaround

The Consumer Abandons GDP

Wealth Management Potpourri

So what if we can't borrow? What's the big deal? Philip Brewer has some interesting perspective on the topic.

What going on with this "mark to market" issue?

Are the wealthy concerned with running out of money? Yes!

VP Candidates errors on tax rhetoric.

The worst investment advice you can get.

Historical Market Perspective from DFA

The Recession is here!

When will the markets return to normal?

Wealth Management Potpourri

Here are some interesting perspectives about the value of the dollar and how the price of oil impacts it.

Do you love or hate money? Nora Dunn on Wisebread has some interesting perspectives on the subject.

How much is enough? That's the key question!

Some surprising data on Sub-Prime mortgages! Thanks Fundmastery!

Oil prices trend down? Some great points From Investment U.

Here's a great investing visual I found on "naked capitalism". Too true not to laugh!

Wealth Management Potpourri

Xin Lu has a great post on the perceptions of the wealthy and their money values.

I normally don't refer to articles like this but it offers an interesting perspective on the impact of upper-income spending has on the economy. The "soak the rich" tax crowd should pay attention.

This Skeptical Optimist post explores what he considers the "myths" of the national debt.

Most of the Economic Stimulus checks went to savings according to this WSJ post. If that's true why did consumer spending increase?

Some "dress for success "tips.

Is a second round of stimulus in order? Greg Mankew suggests yes.