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Our Thinking

Mind over Money

Mind over Money
Key Takeaways

 

“... take a step back and think about your values when it comes to money.”

 

MICHAEL LIERSCH,  PHD

Head of Goals-Based Advice and Strategy at J.P. Morgan

Compounding is confounding: we don’t grasp how money grows

When asked how much $400 monthly investments would grow over 40 years at 10% annual returns, the average person estimated more than $2 million less than actual growth.

Compounding is confounding: we don’t grasp how money grows

Source: Misunderstanding Savings Growth: Implications for Retirement Savings Behavior, Craig R. M. McKenzie and Michael J. Liersch, March 2011

Five Strategies for Managing Your Financial Behaviors
1.
Be the architect of your financial life
2.
Reframe your financial decisions
3.
Align your behaviors—and Investments—with your goals
4.
Find a trusted person to collaborate with
5.
Start with very small, achievable goals
Stay the course
7%

 

The coin flip decision: which would you choose?

Heads you win, tails you lose. Would you take the risk or avoid it?

The coin flip decision: which would you choose?

Source: Risk Tolerance and Decision Making, Michael J. Liersch, PhD, and Riley O. Etheridge, CFA®, CFP®, March/April 2015

You’re Only Human: Do You Recognize Any of These Common Behaviors?
Get a Glimpse Into Our Planning Process
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Check it out for yourself at

chase.com/glimpse

 

Next Steps: Put These Ideas Into Action
Follow three simple steps to get started:
Access our expertise. Talk with a J.P. Morgan Private Client Advisor about creating a Customized Financial Analysis* that reflects your unique needs and behaviors.
Learn more. Read  Start Early, Save Less: The Power of Compounding for practical tips on getting—and staying—invested for the long term.

 

*The Customized Financial Analysis referenced is a tool that provides an additional resource in the evaluation of the potential risks and returns of investment choices. The projections or other information generated by the Customized Financial Analysis regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

 

The information within this document is being provided for informational and educational purposes only. It is not intended to provide specific advice or recommendations for any individual. You should carefully consider your needs and objectives before making any decisions. For specific guidance on how this information should be applied to your situation, you should consult the appropriate financial professional.

 

© 2018 JPMorgan Chase & Co.

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