Despite [the “talking heads” we revere] inability to outperform a dartboard, we continue to look to them and pay them exorbitant salaries. Why? Because they are bold. Surety is baseball, red meat, and the pioneer spirit. Doubt seems wimpy and “Continental.

There are at least three significant reasons we resist contemplating our personal financial goals: it can be stress-inducing, we dislike numbers, it is socially taboo, and we are slaves to “right now.

Pop quiz: What is the best predictor of the size of a retirement nest egg? What’s that you say, performance? Wrong! I’m sorry but the correct answer was “deferral rate,” but thanks for playing. The way that goals-based investing increases deferral rates (and thus, wallet share) is by couching investment in terms of personal meaning… Rather than speaking in sterile terms that rob wealth of its holistic meaning, use your goals as the benchmark and see how much easier saving becomes.

If irrational exuberance can bring about financial calamity, then it stands to reason that rational adherence to a set of rules can save our financial lives. It’s not a complex idea, but it’s one that can have profound implications for the personal and financial wellbeing of our families and even our nations. And it all begins with a focus on-you guessed it-ourselves.

We are neither robotically systematic nor wholly idiotic when making investment decisions. To be sure, we do our best to remain objective and make good decisions, but we are strongly influenced by our cognitive limitations and the cloudy lens through which we see the world. But behavioral approaches, which showcased the limitations of our mental computers, simultaneously gave us the notion that what we consumed mattered greatly.

Equity markets provide an exception to the heuristic that social coherence trumps logic. You were born to fit in, but investing requires you to stand out. You are wired to protect your ego, but success in markets demand that you subvert it. You are programmed to ask, “Why?”, but must learn to ask, “Why not?

So much of human behavior - political, religious, financial - can be explained by the fact that we want to think the best of ourselves and don’t want to work very hard to do it.

Far from seamlessly assimilating new ideas into our existing belief framework, research shows that we actually tend to get more firm in our cherished beliefs when those beliefs become challenged.

But the paradox in owning our personal mediocrity is that it makes us, in the strictest sense of the word, exceptional. It is not about believing in yourself - in fact, it’s quite the opposite. It’s about realizing that the less you need to be special, the more special you’ll become… Exceptional investment outcomes are attainable by all of us, if we just stop trying so hard.

One of the things that makes adhering to probabilities so difficult (and profitable) for an investor is that emotion has a pronounced impact on how we assess probability. Predictably, positive emotion leads us to overstate the likelihood of positive occurrences and negative emotion does just the opposite. This coloring of probability leads us to misapprehend risk… All too often we confuse the intensity of our longing with the probability of our winning.