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Pareto's principle applied to personal finance; Financial regrets; Myers Briggs and money personalities; Popular but bad advice; 30 questions to ask before dying

Posted in Personal Finance

By Amanda Morrall

1) Pareto and personal finance

If you're unfamiliar with Pareto's principle it goes something like this: that 80% of all productive outcome arises from 20% of input.

Pareto came up with this principle after doing some deep thinking and calculations in the garden concluding that the biggest booty came from 20% of pea pods planted. 

The following, from Moolanomy creatively applies Pareto's principle in the context of improving personal financial outcomes.

2) Biggest financial regrets

It's terrible to live with regret. I've tried to make that point subtely and not so subtley in the two years that I have written this column.

When I think of financial regrets, the biggest is not being more mindful about money from a younger age although to be fair (to myself) I was never terribly irresponsible or anything.

Like most personal financial types, I just realised in hindsight how a little saving discipline can go a long, long way when you're in your '20s.

Forbes Money takes a closer look here at some financial regrets of adults with grown children. 

3) Myers Briggs

Ages ago I did one of those Myers Briggs personality tests. The idea of these tests are to help you understand yourself a bit better in terms of how you engage with both yourself and people in your life.

The following from the US website gobankingrates.com examines money personality through the lens of Myers Briggs testing. Food for thought.

4) Popular but bad advice

In personal finance you'll find some stock standard advice about how to manage your money i.e. get out of debt, don't borrow to invest if you're not ready to lose the money, buy if you can afford it rather than rent.

In some cases, that makes perfect sense however ultimately, each individual has a unique set of circumstances that will impact variously on their financial goals. This Reuters piece from Linda Stern challenges some accepted "truths" about retirement planning and managing your money in old age.

5) 30 questions to ask before you die

Another thing I have emphasised in my column (and my book) is the importance of making financial decisions that sit within a wider paradigm of personal happiness and satisfaction. It's not just about the money. In that vein, please have a read of this item from Rebellesociety.com entitled 30 questions to ask before you die.

Have a lovely weekend.

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5 Comments

We can all hold a fifty cent

We can all hold a fifty cent coin between fingers and look at it but if you're having regrets about money you might be holding it too close.
 
Try moving the coin further away so it blocks less of your view.

Ah Ralph, I will miss your

Ah Ralph, I will miss your comments when I'm gone.:)

... when you're gone ? .....

... when you're gone ? ..... where to , Amanda ? .... it's Bernard isn't it , you're fed up with the incessant hickeysterical gloomsterisationalyzing at interest.co.nz ......
 
You heard of the cheesemaker who was such a tight-ass that when he went driving he would never give whey ?

Re:  30 Questions One day we

Re:  30 Questions
One day we need to have a serious discussion about these kinds of posts, which I love but find myself talking back at.

Families in poverty?  Parent

Families in poverty?  Parent put lollies on lay-by... http://www.stuff.co.nz/business/money/8999849/Lollies-on-lay-by