Month: April 2010

“More money begets more spending” seems to be an underlying result of success many people accept. In other words, the more money you make, the more you spend. Quite often, it’s the expectation of the money you should spend.

In most regards, we judge people based on our expectations of them. Generally speaking, people of certain social status or professions are elevated to higher standards.

Think about it. If your doctor showed up in an old, rusty car, it would probably give you cause for concern.

“Hey, wait a minute, what kind of quack is going to operate on me!?!?”

Recently I’ve been reflecting back to March 2009. My interest in behavioral finance probably stems from the technical confusion with markets. From the collapse of Lehman on, another engineering friend and I traded daily emails attempting to make sense of what was happening. As news continued to worsen, we threw our hands up and proclaimed:

“TOO SCREWY – INCONCLUSIVE!”

Although I anticipated the answer, I needed to find a chart graphing historical events against the stock market. As you would imagine, the more severe the news – the more the market plummeted.

Back to 2009 – equities were at fire-sale prices, yet my urge to grab everything under the sun was relatively low. My wish list grew daily, but my executed orders were close to nill. Simply put, my brain was outputting conflicting messages. How could this be given I knew the Buffet adage, “Be fearful when others are greedy, be greedy when others are fearful”.

Mulling over this relationship, an interesting thought surfaced. Maybe it has less to do with

FEAR & GREED and more to do with

FEAR & EXPECTATIONS.

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If you read my 3-month performance review, you’d know I’ve been training for a 10-mile race along with fellow blogger, Paranoid Asteroid. The race has come and gone, and its time to reflect.

Overall, the race went well and I did better than expected. Previously, I’d set a goal of 80 minutes for completion. Ended up beating that goal, coming in under 76 minutes or 7:35/mile.

Earlier I did a post on Financial Lessons From Engineering. The response was positive and many people agreed how other aspects of life, and their lessons, can be applied to personal finance. Unable to resist the urge to do one for running, maybe this will turn into a mini-series!

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