B.A.Y.O.R : September 2024

Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes. They are driven by the same thing: You are one person in a game with seven billion other people and infinite moving parts. The accidental impact of actions outside of your control can be more consequential than the ones you consciously take.

If you give luck and risk their proper respect, you realize that when judging people’s financial success—both your own and others’—it’s never as good or as bad as it seems. Luck and risk are both huge elements of success.

Everything worth pursuing has less than 100% odds of succeeding, and risk is just what happens when you end up on the unfortunate side of that equation. Just as with luck, the story gets too hard, too messy, too complex if we try to pick apart how much of an outcome was a conscious decision versus a risk. When we don’t give risk and luck their proper billing it’s often invisible yet countless fortunes (and failures) owe their outcome to leverage.

The difficulty in identifying what is luck, what is skill, and what is risk is one of the biggest problems we face when trying to learn about the best way to manage money. But two things can point you in a better direction.

1. Be careful who you praise and admire.

2. Be careful who you look down upon and wish to avoid becoming.

Realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself. Risk and luck have a great part to play in the outcomes of life .

Focus less on specific individuals and case studies and more on broad patterns.

Bill Gates once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” When things are going extremely well, realize it’s not as good as you think. You are not invincible, and if you acknowledge that luck brought you success then you have to believe in luck’s cousin, risk, which can turn your story around just as quickly.

Failure can be a lousy teacher, because it seduces smart people into thinking their decisions were terrible when sometimes they just reflect the unforgiving realities of risk. The trick when dealing with failure is arranging your financial life in a way that a bad investment here and a missed financial goal there won’t wipe you out so you can keep playing until the odds fall in your favor.

Study Group Contributors:
Martina

Phoebe
Deborah

Kemi
Bayor

Chapter 1

Chapter 3

Bible Project | One Story That Leads To Jesus | Day 247 | Jesus and the Kingdom | Matthew 23-24, Psalm 92

Bible Project | One Story That Leads To Jesus

Day 247 | Jesus and the Kingdom

Matthew 23-24, Psalm 92

Resources

Bible Project Reading Plans

Bible Project Videos | YouTube Playlist

More Resources + Connect

Monday, September 2, 2024

SUMMARY ATTEMPT | THE PSYCHOLOGY OF MONEY | MORGAN HOUSEL | CHAPTER ONE

People do some crazy things with money. But no one is crazy.

Studying history makes you feel like you understand something. But until you’ve lived through it and personally felt its consequences, you may not understand it enough to change your behavior.

As investor Michael Batnick says, “some lessons have to be experienced before they can be understood.” We are all victims, in different ways, to that truth.

In theory people should make investment decisions based on their goals and the characteristics of the investment options available to them at the time. But that’s not what people do. The economists found that people’s lifetime investment decisions are heavily anchored to the experiences those investors had in their own generation— especially experiences early in their adult life.

The financial decisions we make most times tends to define how our life turns out to be. However, we can't be determinants of our financial success some times. The economy hits everyone differently but there's always diverse impact that economic recession would have on an individual who had made a wise financial decisions than an individual who has not.

The economists wrote: “Our findings suggest that individual investors’ willingness to bear risk depends on personal history.”

Every decision people make with money is justified by taking the information they have at the moment and plugging it into their unique mental model of how the world works.

Few people make financial decisions purely with a spreadsheet. They make them at the dinner table, or in a company meeting. Places where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together into a narrative that works for you. Your experiences often influence your perspective and decision with money .

Everyone talks about retirement, but apparently very few do anything about it. It should surprise no one that many of us are bad at saving and investing for retirement. We’re not crazy. We’re all just newbies.

We all do crazy stuff with money, because we’re all relatively new to this game and what looks crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.

People's experiences, influence and impact their view on money. And when that’s the case, a view about money that one group of people thinks is outrageous can make perfect sense to another. Therefore , it's wise to respect people's opinion about their personal financial decisions.

Study Group Contributors:

Phoebe

Martina

Kemi

Deborah

Bayor

Introduction

Chapter 2

Bible Project | One Story That Leads To Jesus | Day 246 | Jesus and the Kingdom | Matthew 21-22, Psalm 91

Bible Project | One Story That Leads To Jesus

Day 246 | Jesus and the Kingdom

Matthew 21-22, Psalm 91

Resources

Bible Project Reading Plans

Bible Project Videos | YouTube Playlist

More Resources + Connect

Sunday, September 1, 2024

SUMMARY ATTEMPT | THE PSYCHOLOGY OF MONEY | MORGAN HOUSEL | INTRODUCTION

Two topics impact everyone, whether you are interested in them or not: health and money.

Success is not based on how much wealth you are able to amass, but how many lives you are able to impact positively.

Money responds more to your behavior than your knowledge or expectations.

Financial success depends more on how you behave than what you know. Sciences and mathematics are guided by laws, but finance (money) is guided by human behavior.

Making money and keeping it has very little to do with financial knowledge but very much to do with financial behavior. Financial success is not rocket-science. It's a soft skill where behavior with money plays a critical role.

A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.

“History never repeats itself; man always does.” – Voltaire. This applies so well to how we behave with money.