The Laws of Wealth: Psychology and the Secret to Investing Success by Daniel Crosby

PART ONE. THE RULES OF
 BEHAVIORAL SELF
MANAGEMENT

PARADOX OF PRIMATES &
 FORMALWEAR
 Have you ever seen a monkey in a tuxedo? I certainly hope so, but
 on the off chance that you have not, please put down this book
 momentarily, access your preferred search engine and see that this
 travesty is remedied post-haste.
 Seen it now? All better then!
 In witnessing the transcendent splendor of a monkey in a tuxedo,
 you probably experienced a number of conflicting responses. Your
 first response was likely to laugh or smile, but as you looked on,
 you may have been overcome with a slight unease. For as funny as
 a monkey in a tuxedo (M.I.A.T., henceforth) may be, there’s
 something not quite right about a wild animal wearing a
 cummerbund.
 As alien as a primate in eveningwear may look, you are at least as
 out of place when investing in stocks. The sad paradox is this:
 1. You must invest in risk assets if you are to survive.
 2. You are psychologically ill-equipped to invest in risk assets.
 First, let us examine the reasons why you must invest in risk assets
 if you are to eat anything but cat food in your Golden Years. As of
 the writing of this book, the median wage in the US is $26,695 and
 the median household income is $50,500.
 Let us suppose for illustrative purposes, however, that you are four
 times as clever as average and have managed to secure a
 comfortable salary of $100,000 per annum. Let us further suppose
 you are a disciple of anti-debt guru Dave Ramsey and religiously
 set aside 10% of your gross income each year into a piggy bank
 whose innards will not see daylight until the first day of your
 retirement. Assuming you begin saving at age 25 and retire at age

The Laws of Wealth: Psychology and the Secret to Investing Success by Daniel Crosby