Fawcett’s Favorites 3-6-23

Every week I find a few great articles I feel are especially valuable. Following are this week’s best. I hope you find them as useful as I did.

This week’s favorites include how making small improvements lead to big gains, don’t fall prey to the insurance companies, advice from those who lived to be a hundred years old, why active fund managers invest their own money in passive index funds, and your house is such a terrible investment that it isn’t even in the investment category.

Happy reading!

Habits can make or break your future. Good habits magnify good results and bad habits magnify bad results. I have seen first-hand how this works with my high performance coaching program, both as a coach and as a client. The British cycling team learned this as well when they started practicing incremental improvements. Habit Examples shares How the British Cycling Team Broke Their Hundred-Year Losing Streak. Starting a new habit or activity and making just a 1% improvement once a week creates a 66% improvement the first year. What new habit or activity will you start to get this process rolling in your life? 

We all need various kinds of insurance at different times in our lives. But as circumstances change, we also come to a point where we no longer need some insurances. Once I was financially independent, I no longer needed life or disability insurance, so I stopped paying those premiums. But if you are not aware of the way the insurance company plays the game, and understand that it is rigged in their favor, then you are poised to transfer a fortune from your bank account to theirs. The Loonie Doctor spells out The Basic Rules of the Insurance Game. If you understand the rules, you have a chance at winning the game. 

One of the benefits of reaching financial independence is to never run out of money during a long and happy retirement. But what does it take to live to a hundred and be happy about it? The Guardian answers that question with 100 tips from 100 centenarians on achieving a life well lived. I hope you all reach a hundred and feel your life was well lived. 

Despite the facts against it, many people still feel they have the power to pick the winners when investing in the stock market. However, index funds are the best way to give yourself the best odds of good returns when investing. Evidence Investor reviews a recent study on how active fund managers invest their own money. It is quite telling to hear the active fund managers say they invest their own money in index funds and don’t invest in the fund they manage. What should that say for us?

I still hear many people stating their house is a good investment. Yet when we work on their budget in my Financial Makeover coaching program, their house expense is never placed in the investment section of the budget form. That is because it is an expense, not an investment. J L Collins understands this and speaks up about Why Your House is a Terrible Investment. Maybe this article will convince you once and for all of this fact.

I hope you enjoy these articles as much as I did. I look forward to updating you again next week with a few more articles I find especially interesting. If you read an especially good article, send me the link so I can share it with others.

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2 thoughts on “Fawcett’s Favorites 3-6-23”

  1. Thanks Dr. Fawcett for helping spread the word. I also found the how active managers invest article interesting. I am curious how insurance brokers insure themselves. Particularly with the expensive heavily marketed products. They often get pretty heavy training on the products as solutions with minimal consideration of the alternatives, creating a bias. I wonder if they see beyond that personally or not.

  2. Hi, thought the article on house not being investment interesting.
    A house is an asset, not an investment. it has value, and often appreciates.
    What I have NEVER seen in these articles that bash home buying is the amount of rent saved.
    If I sell my house and I break even when considering the rent I would have pain over the same time, then I call that a win. And when I exit my house I will likely have a large lump sum to buy another house, or do whatever I’d like with. Everyone needs a place to live, and it is better to own than not, all else being equal.
    My two bits.



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