Tony Sablan - Money off the Table: Decision Science and the Secret to Smarter Investing

Everything you need to know about investing is already out there. Gurus on TV will tell you what stocks to buy. Websites can explain what bonds and annuities are. Wealth advisors can offer strategic help. Sometimes you have to hunt for it, but the information you need already exists.

Its as if the world doesnt need another book about investing.

But if this is true, then tell me, why arent more people retiring earlier? Why are some investors winning while others are losing? Why arent more people leaving greater inheritances for their children? And most of all, why do so many investors have a nagging feeling about whether or not theyre doing the right thing?

All of my clients come to me with some knowledge about investing. On one end, there are investors who only have a 401K. On the other end, there are people with millions of dollars invested in a variety of vehicles, from stocks to real estate to annuities to cryptocurrency. Some have been investing for months; others for years. In short, they run the gamut.

One thing Ive noticed while working with these investors is that knowledge does not correlate with success. People who read all the right books and meet with multiple advisors, who use all the right jargon and keep on top of the latest news, can still have huge gaps in their investment plans, leaving them vulnerable and less wealthy than they could be. Meanwhile, people with little investment experience can be set up for success.

It becomes hard, after a while, to avoid the inevitable conclusion that theres more to investing than just knowledge. This book is about something morethat extra element you need beyond knowledge to increase the likelihood of success.

That something more is the right mindset.

Making the right investment decisions is not easy. Its stressful and full of uncertainty. With most purchase decisions in lifelike which brand of potato chips to buy, which car to get, or which laptop your kid should haveyou have a decent shot at weighing the pros and cons of the purchase because you know what to expect. Potato chips wont become corn chips once you open the bag. A black sedan wont become a white truck once you drive it off the lot.

Investing is different. Your investments could perform exactly the same two years from now as they do today, or they could drop (or rise) dramatically in value. Even the strongest stocks are susceptible to volatility; recent history has shown this to be true.

Investing in real estate isnt a sure thing either, despite the commonly held belief that property values always increase. Sure, many types of investments eventually go up over time, but where will they be the moment you need to cash them in? How will they be performing on the day of your retirement? This you cant predict. Anyone who says they can predict the market is brashly overconfident, in denial, or one of very few wealthy people who can change market performance just by dumping a lot of stock.

I often tell prospective clients who say they can predict the market that they should quit their jobs and start negotiating a seven - figure salary with a top financial firm. No one takes me up on it. The uncertainty inherent in investing can do wacky things to peoples mindsets. Some investors become way too confident, over - compensating for their lack of certainty with bold decisions backed by force of will. Others lose confidence altogether, succumbing to the advice of slick salespeople with their own agendas.

Having tons of knowledge and experience doesnt make you immune to uncertainty. As long as uncertainty can enter the picture, so will bad decision - making .

This is no ones fault. Its part of being human. Our brains arent computers. They arent designed to handle complex calculations involving multiple data points. Theyre influenced by emotion and physiology. They can only absorb and process a limited amount of information, and oftentimes, information isnt easily accessible. To top it off, humans are social creatures: we care about what others think and how our behavior is interpreted. Were also creatures of habit, learning from our institutions and our culture about whats right and whats wrong, whats smart and whats not, and going along with social rules because theyre expected.

And we cant predict the futureeven computers cant do that.

When were faced with decisions under conditions of uncertainty, like the decisions we make in investing, were bound to make choices that dont always lead us in the right direction.

This book will give you information thats missing in other books today: information designed to help protect you from the flaws of your own decision - making so you can be confident in your investment choices, no matter the situation youre in, and no matter how the market is performing. Using knowledge from behavioral and social science about decision - making under uncertainty, the information in this book will help you do a better job of avoiding bad choices that may cause you to lose money. It will also help you build good practices that can decrease the likelihood of financial loss, even in volatile times.

If youve found yourself feeling insecure about getting started with investing, then this book is for you. If youre a seasoned investor feeling shaky about your portfolio, or you have a funny feeling that you could do better, then this book is also for you. If you feel good about your investment decisions but just want to cover your bases, then you should also read this book.

If you want to learn what an annuity or money market account is, then read another book. That kind of information exists pretty much everywhere else. Here, youll learn how to think about the information you have , and how to adjust your mindset so that your decision - making is more confident and lucrative.

And in the end, with the market being what it is, real confidence is what matters the most.