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July 29, 2021By Erin @ Team Afford Anything

#329: Challenging Your Confirmation Bias, with Economist Larry Kotlikoff

Laurence Kotkiloff in a suit in front of a white boardHave you ever thought about how an economist views financial planning?

Would you guess that it’s vastly different from how some financial planners approach this work?

Today’s guest, Laurence Kotlikoff, is a Professor of Economics at Boston University. The Economist named him one of the world’s 25 most influential economists in 2014. And he’s here to tell us this:

“What we, as economists, are saying with respect to personal financial matters — in terms of our advice — is almost a complete right-angle as to what conventional advice is providing on every topic. How to invest, how to think about investment risk, how to do basic planning for retirement, everything – every single thing – is quite different.”

Professor Kotlikoff has written 19 books and hundreds of professional articles and Op-Eds. He is a New York Times best-selling author, and his columns have appeared in The New York Times, The Wall Street Journal, The Financial Times, The Boston Globe, Bloomberg, Forbes, and other major publications.

Beyond becoming familiar with the four central tenets of economics-based financial planning, Laurence also shares his perspective on:

  • Why prices are rising and the impact we might see from inflation
  • What the best investments are in this market
  • How paying off debt puts you in a stronger position
  • Why you might not want to invest until you pay off that debt
  • Paying off your mortgage vs. investing in the market
  • Why stocks aren’t safer in the long-run

For a nuanced discussion on the thoughts he shared with us during the interview, make sure you stick around for our key takeaways.

You’ll enjoy this episode if you’re curious about…

  • how the economic landscape changed in the last year, and what might be ahead
  • how economists make financial decisions and how their methodology differs from that of financial planners
  • which investments an economist prefers in this environment

Resources Mentioned:

  • Kotlikoff.net | Laurence’s Website
  • MaxiFi | Financial Planning Software
  • Irving Fisher | Wikipedia Article

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#330: Ask Paula: How Do I Know If I’m Ready to Retire?
Next Newer Episode »
#328: Ask Paula: I’m on the Verge of Retirement and My Taxes are Rising … Help!
Next Older Episode »

Posted in: Episodes, InvestingTagged in: behavioral finance

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Afford Anything

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