In the first episode of our podcast, Lou Melone, CFP®, managing partner of Melone Private Wealth , sits down with RJ King, editor of D Business magazine.  And our conversation starts with the idea of behavioral investing.

Financial planning comes down to one simple question - will you outlive your money or will your money outlive you?  Lou talks about "winning the race to the wrong finish line."   He tells a story of two 85 year old men - the man who ran out of money at 80 is now in the same position as the man whose wealth lasted until 84!

The amygdala is the part of our brain that we sometimes know as "fight or flight." Believe it or not, the same instincts that had our ancestors run from saber toothed tigers now triggers us to move away from the market in times of volatility. The key is to create a financial plan and stick do it -and not give in to our emotions.

Lou cites some numbers regarding how individual investors often under-perform market returns. This is because they give in to their emotions! Even a difference of a couple percentage points in a given year will grow exponentially when compounded over time.  This is why it's important to work with an advisor.

In our next episode, we will discuss the anatomy of investor returns, including: stimulus, investor behavior, volatility, retention rate, and asset class. 

Resources:

Lou Melone's book, "Unpack Your Financial Baggage:" https://www.amazon.com/Unpack-Your-Financial-Baggage-Misconceptions/dp/1948237776

Melone Private Wealth Website: https://www.meloneprivatewealth.com/

D Business Magazine Website: https://www.dbusiness.com/