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Financial Decoder

Author: Charles Schwab

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Cognitive and emotional biases can have a big impact on your financial life. Each episode of Financial Decoder looks closely at one financial decision--and the biases that might cloud your judgment and cost you money. Host Mark Riepe, head of the Schwab Center for Financial Research, decodes the behavioral and psychological factors at play and shares strategies designed to improve the way you approach financial crossroads. Other experts join Mark to provide their unique perspective on behavioral economics, portfolio management, retirement planning, personal finance and more.

Podcasts are for informational purposes only. This channel is not monitored by Charles Schwab. Please visit schwab.com/contactus for contact options.
18 Episodes
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What are your financial goals? What are your biggest concerns? Do you have a concrete plan to address your concerns and achieve your goals? In this episode, Mark talks with Cynthia Loh, vice president of digital advice and innovation at Schwab. Together they look at some proprietary empirical data involving the goals—and the biggest concerns—of real investors in the hopes that these lists might spur some thinking about your own situation and what matters most to you.You can learn more about the fresh start effect by listening to this episode of Choiceology with Katy Milkman and guest Richard Thaler, winner of the Nobel Prize in Economics.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.  Important Disclosures:Please read the Schwab Intelligent Portfolios Solutions™ disclosure brochures  for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co. Inc. (“Schwab”), a dually registered investment advisor and broker dealer. Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. (“CSIA”). Schwab and CSIA are subsidiaries of The Charles Schwab Corporation.Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are designed to monitor portfolios on a daily basis and will also automatically rebalance as needed to keep the portfolio consistent with the client’s selected risk profile. Trading may not take place daily.Diversification, automatic investing and rebalancing strategies do not ensure a profit and do not protect against losses.The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. Google Podcasts and the Google Podcasts logo are trademarks of Google LLC. Spotify and the Spotify logo are registered trademarks of Spotify AB. (1119-9D60)
How Much Should You Borrow?

How Much Should You Borrow?

2019-10-2800:22:34

In today’s world virtually everyone participates in the economy as either a borrower or a lender, and most people are both. If you’ve ever put money in a bank, then you’re a lender. If you’ve ever used a credit card, then you’re a borrower. In this episode, Mark Riepe talks with Carrie Schwab-Pomerantz about the liability side of your personal balance sheet—debt. Of course, not all debts are the same.Among the topics Mark and Carrie discuss are “good” debt versus “bad” debt, paying off debt before you retire, and a handy rule of thumb for managing your personal debt level.You can read more about the exponential growth bias and personal finance in this study.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.  Important Disclosures: The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request.Examples are hypothetical and provided for illustrative purposes only. They are not intended to represent a specific investment product.Investing involves risk, including loss of principal.This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager. Please consult with your tax advisor on the deductibility of home equity line of credit interest payments for your specific tax situation.This offer is subject to change or withdrawal at any time and without notice. Nothing herein is or should be interpreted as an obligation to lend. Loans are subject to credit and property approval. Other conditions and restrictions may apply. Hazard insurance may be required. Program terms and conditions are subject to change.Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.Spotify and the Spotify logo are registered trademarks of Spotify AB.(1019-95Z8)
Charles Schwab & Co. founder and Chairman of the Board Chuck Schwab discusses the decisions that led him to create a revolutionary business model for the brokerage industry. Chuck talks about his decision to start a business, his difficulties raising capital, and even how he convinced his wife to mortgage the house to support his upstart company. He and Mark also discuss the 1983 sale of the company to Bank of America, how he bought the company back—and how Chuck framed both decisions to his employees and the board of directors.The goal of Financial Decoder is to help listeners make better financial decisions. And while the decisions Chuck describes are in the context of his life, many of us will make decisions that may be smaller in scale but are of the same basic type: when to sell, when to change direction when things aren’t going well, when to ask for help, when to borrow money, and many others. And in the context of our own lives, these can be high-stakes decisions indeed.You can learn more about Chuck’s new memoir, Invested, and the company he built at https://content.schwab.com/Invested.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.  Important Disclosures:The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request.Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.Examples are hypothetical and provided for illustrative purposes only. They are not intended to represent a specific investment product.Investing involves risk, including loss of principalApple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.Spotify and the Spotify logo are registered trademarks of Spotify AB(1019-9Y15)
Which generation is more prone to herding—millennials or Generation X? Should anchoring bias worry Baby Boomers or younger investors more? In this episode, Mark Riepe is joined by Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management and an expert in behavioral finance. Mark and Omar discuss the results of a survey that identified the biases most prevalent among baby boomers, Gen X, and millennials. This study from the Journal of Financial and Quantitative Analysis tests the implications of anchoring bias associated with forecasting earnings per share.Another study from Information Systems Research examined the role of confirmation bias in virtual communities such as stock message boards.You can learn more about nosology and the classification of diseases in this article: https://www.3mhisinsideangle.com/blog-post/the-first-nosologists-classifying-disease-in-16th-century-london/Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.  Important Disclosures:The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Digital currencies, such as bitcoin, are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view Bitcoin as a purely speculative instrument.This is for general informational purposes only and is not intended, nor should it be construed, as tax, investment or legal advice. Consult with your legal counsel and tax advisors about your particular circumstances.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.(0919-9DF0)
The financial services industry is heavily regulated. That means the politicians who write the laws and the regulators who execute those laws shape the environment in which individual investors make their decisions. In this episode, Mark Riepe is joined by Mike Townsend, vice president for legislative and regulatory affairs at Schwab. Townsend is also the host of Schwab’s newest podcast, WashingtonWise Investor. Among other things, Mark and Mike discuss how politicians use certain cognitive and emotional biases to frame policy proposals, win elections, and pass legislation.This study of Facebook users examined how interacting with diverse news and opinions affected exposure to content across the political spectrum.This study from the Journal of Marketing Research showed that taxes are disliked more than their equivalent (or larger) costs.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts. Important Disclosures:The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Past performance is no guarantee of future results.This is for general informational purposes only and is not intended, nor should it be construed, as tax, investment or legal advice. Consult with your legal counsel and tax advisors about your particular circumstances.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.(0919-9J5G)
Trading is a crucible of emotions and analysis. During volatile markets and periods of economic change, it is common for regular investors to ask whether they should be more active with their portfolios. In this episode, Mark Riepe is joined by Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. Mark and Randy review a list of biases that have an impact when you’re making trading decisions, and then they discuss techniques that can blunt the impact of those biases.This study of day traders using real money revealed the link between emotions and trading performance.This study from the Journal of Marketing Research documented the tendency of investors to repurchase stocks they previously sold for a gain rather than ones they previously sold for a loss and repurchase stocks that have lost value subsequent to a prior sale rather than those that have gained value.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.Important Disclosures:The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Past performance is no guarantee of future results.This is for general informational purposes only and is not intended, nor should it be construed, as tax, investment or legal advice. Consult with your legal counsel and tax advisors about your particular circumstances.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.Spotify and the Spotify logo are registered trademarks of Spotify AB.(0619-9406)
Discussing what will happen to your children and your assets after you die might not sound like the most pleasant task. Is that why so many people don’t have wills or estate plans? Mark talks with Colleen O’Brien about what’s actually in an estate plan and how you can get started creating one.You can read more about the number of people without wills in this NBER working paper.The concept of “choice bracketing” is explored in this article from the Journal of Risk and Uncertainty.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.Important Disclosures:The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Past performance is no guarantee of future results. This is for general informational purposes only and is not intended, nor should it be construed, as tax, investment or legal advice. Consult with your legal counsel and tax advisors about your particular circumstances.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc. Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. Google Podcasts and the Google Podcasts logo are trademarks of Google LLC. Spotify and the Spotify logo are registered trademarks of Spotify AB. (0619-9FP2)
When Should You Retire?

When Should You Retire?

2019-05-2000:29:34

After saving up your whole life, is it finally the right time to retire? It’s a complex decision with a lot of variables. In this episode, Mark Riepe examines how affective forecasting and optimism bias could hinder you from making the best decision. Mark talks with Robert Aruldoss, a senior research analyst for financial planning at the Schwab Center for Financial Research, about how much savings you should have, when you should sign up for Medicare, when you should take Social Security, and other factors influencing your decision of when to retire.You can read more about the rising costs of health expenses in retirement from the Employee Benefit Research Institute.Working longer and delaying retirement can be a powerful strategy. Read more about the benefits in this study.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.Important Disclosures: The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Past performance is no guarantee of future results.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.Spotify and the Spotify logo are registered trademarks of Spotify AB.(0519-9YBN)
Saving for retirement can seem overwhelming—especially if you are 50 years old and haven’t saved nearly enough. Fortunately there are some provisions in the tax code that allow you to make additional contributions to tax-advantaged accounts. In this episode, Mark Riepe examines some of those provisions as well as a few biases that might actually help you get back on track.Mark is joined by Hayden Adams, director of tax and financial planning for the Schwab Center for Financial Research. They discuss the catch-up provisions available with employer-sponsored plans as well as individual plans.You can read more about the specifics of each type of catch-up contribution allowed at IRS.gov.The benefits of immediate rewards as they relate to long-term goals are explained in this article from the Personality and Social Psychology Bulletin.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.Important Disclosures:The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk including loss of principal.Past performance is no guarantee of future results.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.Spotify and the Spotify logo are registered trademarks of Spotify AB.0519-91AN
Your willingness and ability to take on risk in your portfolio has a significant effect on how your portfolio performs. However, perceptions of risk can be skewed by overconfidence, affective forecasting errors and other biases.In this episode, Mark Riepe explains how people’s tolerance for risk differs on a cognitive and emotional level, as well as how “risk capacity” is a more objective matter. Tobin McDaniel, Schwab’s SVP of Digital Advice and Innovation, joins Mark to discuss how investors view risk in real-world situations, and how they respond to changing market conditions.You can read more about risk capacity in this article by Season 1 Episode 2 guest Rob Williams.Risk-taking and realized versus paper losses is explained in this article from American Economic Review.Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.Financial Decoder is an original podcast from Charles Schwab.If you enjoy the show, please leave us a ★★★★★ review on Apple Podcasts.Important Disclosures: Please read the Schwab Intelligent Portfolios Solutions™ disclosure brochures for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co. Inc. ("Schwab"), a dually registered investment advisor and broker-dealer. Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. ("CSIA"). Schwab and CSIA are subsidiaries of The Charles Schwab Corporation.The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.Investing involves risk including loss of principal.Hypothetical examples are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment.Past performance is no guarantee of future results.The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries.Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.Spotify and the Spotify logo are registered trademarks of Spotify AB.(0419-96JD)
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Comments (2)

Beryl

I enjoyed listening to this on my BART ride home this evening. Thank you.

Nov 13th
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