Articles by Oakleigh Wealth
The Dunning-Kruger Effect (in investing (and life)
Dunning & Kruger’s study demonstrated something we all know to be true from experience: people with low levels of knowledge, skill, or competence tend to overestimate their own abilities. Their findings have broad implications for personal finance and investing, but it also raises broader questions about the human experience more generally. We are all prone to over confidence. Mastery, in any arena of life, requires that we overcome the despair of failure through dilligence and humility. But is that all there is?
Invest or pay off debt?
No one likes the feeling of being indebted, whether it’s actual debt (student loans, mortgages, credit card…), or more generally in the sense of feeling an obligation to return some favor. And as this opening observation demonstrates, the decision of whether to pay down debt is often as much one of emotion as it is cold financial math. Therefore, answering the question of whether I should pay down my mortgage early or try to invest the savings in the market requires looking at both the math and the emotion of debt.