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AIE 205: Avoiding the Mistakes of the Man Who Did Everything Wrong

AIE 205: Avoiding the Mistakes of the Man Who Did Everything Wrong

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We are exposed to a lot of information about the economy and markets. Much of it is useless. It’s also very short-term focused. Mick’s goal has been to cut through the noise and mellow people out as it relates to their money. In his book, Chapter 4 is about the man who did everything wrong and one who did everything right. The key to remember as you’re reading this chapter (or listening to this conversation about it) is that we all have the psychological potential within us to be either person. Mr. Wrong initially chose an advisor who was known for putting all eggs into one basket, and when that basket (bonds) went down, he switched to Mick’s firm. When Mick’s firm started rebalancing into stocks and stocks went down, Mr. Wrong changed course again. This story leads to a spirited discussion about diversification. One way to manage expectations is to speak of hypotheticals in real dollar values instead of percentages. The couple that did everything right, on the other hand, chose to take a conservative approach to diversification. They understood what could happen to the value of their portfolio upon a downtown. When one came, they decided to buy even more stocks. In the end, they didn’t draw down their principle at all over the course of their whole retirement! In order to behave like the folks who did everything right, the most important thing to do is get started. Invest what you can. Try your best to understand your own risk tolerance. Over time, re-balance your portfolio if you ideal allocation becomes skewed when one asset class has been up over time. Mick reminds us that when investing with an advisor to pay attention to fees. And he closes by letting us know that our experiences can be life tuition. Try to look at it that way.


If you liked this episode, you’ll also like episode 168: Keep Finance Personal: Get Your Time, Energy & Financials Right.


About Mick:

Mick Heyman, CFA, is the author of “Mellow Your Money: How to Surf the Market and Build Wealth without Stressing Yourself Out” and the Founder of Heyman Investment Counseling. With a 40-year career in wealth management, Mick has built a reputation for helping individuals grow and preserve their wealth through a stress-free approach to investing. Mick holds a bachelor’s degree in economics from Northwestern University and is a Chartered Financial Analyst (CFA). In addition to his book, Mick shares his insights on sound money management through articles on LinkedIn and has been featured in the Wall Street Journal. Residing in San Diego, Mick enjoys an active lifestyle, engaging in tennis, golf, surfing, and practicing meditation, yoga, and qigong (she gong). He also has a deepappreciation for mystery novels and Russian literature. To learn more about Mick’s approach to investing, visit mellowyourmoney.com.


Connect with Mick:

https://mellowyourmoney.com/


Connect with Lauren:

https://www.realadultingiseasy.com/⁠⁠⁠

https://twitter.com/AdultingIsEasy

https://www.instagram.com/adultingiseasyreal/


About Lauren:

Lauren Keen Aumond is passionate about personal finance. She hosts the Adulting Is Easy podcast, where she helps make adulting easier for listeners by making money easier. Lauren became a millionaire at age 31 through high income, investing in stocks, and owning and managing real estate. She was able to leave her 9-5 at age 33 and now manages her short- and long-term rentals on the west coast of Florida with her husband. For fun, Lauren plays tennis, spends time with her family, drinks red wine, travels, and boats.

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