NWP Monthly Digest | January 2026

Jan 1

You’re Crushing It! Now What?

After three straight years of double-digit gains in the stock market, there's a weird moment that happens right about now.

You look back and think, "I handled that." I made good decisions. I stayed invested. I kept my spending in check. I didn't panic. I did the smart tax stuff. I'm getting better at this.

And you might be right.

But the real danger in these strong tailwinds is what they can tempt you to believe about yourself.

The Lemon Juice Problem

Enter the Dunning-Kruger effect: the idea that when people are new or underskilled in a specific area, they tend to overestimate how good they are at it. Not because they're arrogant. Because they don't yet know what "good" actually looks like, so they can't accurately measure themselves.

The most famous illustration is a real guy named McArthur Wheeler, who robbed banks after smearing lemon juice on his face. He thought it would make him invisible to security cameras. When police arrested him later that day and showed him the footage, he reportedly said, "But I wore the juice!"

That line is funny until you realize how human it is.

He wasn't trying to get caught. He wasn't trying to be ridiculous. He genuinely believed he'd discovered a "hack." He felt confident because he lacked the knowledge required to know how wrong he was.

It's a perfect metaphor for personal finance, because money has a way of giving us confidence right when we should be adding humility.

And if you did crush it last year, this is the moment to decide what kind of win it was: Was it skill, discipline, and a repeatable process? Or was it lemon juice?

Knowledge Is Power... and Humility

I can relate to the roller coaster ride of overconfidence. Coming out of the financial crisis at JP Morgan, I had nothing but confidence. Then I studied for the CFA exams—a grueling process that revealed just how little I actually knew. A year or two later, navigating high net worth clients through complex financial plans and stock option strategies, I hit a moment of genuine humility. There was so much more to learn.

Malcolm Gladwell talks about the 10,000-hour rule for mastery—roughly five years of dedication. Wealth management covers at least three fields: financial planning, investment management, and tax planning. That's 15 years to real expertise. During my JP Morgan years, I was maybe at 6,000 hours. Today I'm closing in on 36,000 hours, plus hundreds more on licenses and certifications. Looking back, it's easy to see how much I didn't know at each stage. And here's the strange part: my confidence is actually lower now than when I was an ambitious professional in my 20s. The Dunning-Kruger effect in action.

Here's what makes investing especially dangerous: if you want to become a neurosurgeon and someone hands you a scalpel and asks you to remove a brain tumor, you know immediately you're unqualified. But if your IRA is sitting in cash and you decide to buy Google, Nvidia, Microsoft, and an S&P 500 ETF? That feels reasonable. It's your account. This isn't life or death. Worst case, maybe you work five extra years.

Did you make a mistake? Are you overexposed? Are these investments aligned with your actual goals? You may not know—but it probably looks fine to you. That's the problem. You don't know what you don't know.

So when someone says, "I'm pretty good at managing my investments," I believe them. But "pretty good" is not the same as "prepared for the complexity you can't see yet."

This is what humility does for you:

It keeps you open to the possibility that you're missing something important
It keeps you curious instead of defensive
It makes you build systems, not stories

In the realm of financial planning, humility shows up as:

Not mistaking familiarity for diversification
Not assuming last year's refund means you "nailed it"
Not assuming ‘I’ll work longer’ is a plan without doing the math

Some of the most expensive sentences in personal finance sound completely reasonable:

"I'll just figure it out when the time comes"
"It worked last time"
"My friend does it this way"
"I read a thread about it"
"How complicated can it be?"
"I don't want to pay someone when I can do it myself"

Sometimes you can do it yourself. Many people should. But the real question is whether you're doing it with a process that catches your blind spots—or just the hollow assurance of lemon juice.

Here's the tricky part: blind spots rarely show up when markets are calm and life is smooth. They show up under pressure—when a big decision has a deadline, when emotions run high, or when multiple parts of your plan collide at once. That's why the value of a good advisor isn't picking the next winner. It's building a system that holds up when conditions change.

Even Titans Implode

Stockton Rush, CEO of OceanGate, ignored repeated warnings about his Titan submersible. When his director of marine operations delivered a safety report outlining serious concerns, Rush fired him on the spot. He dismissed skepticism, brushed off standards, and treated challenge as disloyalty.

The result? In summer 2023, the vessel imploded at ocean depths, killing all five people on board.

When a system isn't challenged, it doesn't just stay the same. It gets weaker. Not because anyone is careless on purpose, but because humans normalize risk. We get comfortable. We take shortcuts. We stop asking hard questions because nothing bad happened last time. When you remove independent challenge and treat standards as optional, a single point of failure turns catastrophic.

In wealth management, the stakes aren't life-or-death in the same way—it's important to say that plainly. But the principle still matters: Unchallenged confidence is fragile.

In wealth management, "pressure" takes the form of:

A bear market
A job change
A business sale
A concentrated stock position that finally cracks
A health event
A divorce
A parent or children needing more support than expected

If your financial plan only works when life is smooth, it's not a plan. It's a fair-weather story.

Surround Yourself with Those Who Challenge You

A while back, I wrote about Federer and the idea that, for stretches, dominance can quietly reduce the urgency to evolve. But when Rafael Nadal emerged, suddenly Federer's game wasn't enough anymore.

When you're not challenged, you don't get sharper by accident. And when you are challenged, you either adapt or you get exposed.

At age 33, Federer changed rackets for the first time in his career—switching to a larger frame capable of producing more power. He worked on driving through his backhand and getting off the defensive. After the change, he dominated Nadal 7-2 in their head-to-head matchups, despite being five years older.

That's what healthy challenge does in any domain. It forces you to work harder, become an expert, and master your game instead of relying on naive confidence.

The same applies to your wealth. Good years lull you into believing your current approach is fine. Hard years remind you it's not.

This is why the best financial outcomes usually come from some form of constructive friction:

A spouse who asks, "Are you sure?
An advisor who will tell you "no" (and explain why)
A financial plan that forces trade-offs

You don't want yes-people around your money. You want truth-tellers.

If you're self-reliant by nature, I get it. Letting someone challenge you can feel like losing control. It's the opposite. It's how you keep control when your brain is most tempted to wing it.

The Point of Winning Is to Earn the Right to Get Better

If last year was strong for you, enjoy that. Let it count. Take the win.

But don't let the win convince you the game is solved.

The people who build real wealth over decades aren't the ones who never make mistakes. They're the ones who keep upgrading their decision-making before the next test shows up.

Confidence is valuable. Humility is protective. Challenge is the engine.

Market strategists are forecasting another strong year for stocks. That's the exact moment when complacency becomes most dangerous—when everything feels dialed in and the lemon juice starts to look like wisdom.

The question isn't whether you crushed it last year.

It's whether you're building something that can crush it for the next twenty.

Noble Wealth Pro Tip of the Month

Your 2026 Financial Planning Checklist

The new year is an ideal time to review and strengthen your financial foundation. Here's a practical guide to help you navigate your 2026 financial planning.

Assess Your Financial Foundation
- Start by understanding the relationship between your income, assets, expenses, and debts. Compare your projected after-tax income to your actual expenses—and be realistic. Your financial plan should reflect reality, not wishful thinking.
- Ask yourself: Can you save 20% or more of your income? If you're falling short of your savings goals, now is the time to identify areas where you can cut back. Subscriptions are often the easiest place to start trimming unnecessary expenses.
Eliminate High-Interest Debt
- Tackle any debts with interest rates above 6%. While it's hard to watch your bank balance drop as you pay these off, high-interest debt will undermine your entire financial plan. If you're considering investing instead of paying down these debts, remember that the prospects for higher investment returns look significantly different today than they did three years ago.
Build an Adequate Emergency Fund
- Establish a dedicated emergency fund that matches your personality and circumstances. If you tend toward extreme optimism, add a bit more to this fund than feels comfortable. Conversely, if you're prone to financial anxiety, resist the urge to overfund this account beyond what's absolutely necessary—too much sitting in emergency savings can also weigh down your financial progress.
Review Your Investment Strategy
- Take time to review your asset allocation and ensure it aligns with your financial goals. You'll hear countless predictions about what the stock market will do in 2026—ignore all of them. The stock market cannot be reliably predicted over short time horizons.
Check Your Retirement Planning
- Evaluate whether you're on track to retire when you want to. Are you saving in the most tax-efficient accounts available to you? Make adjustments now if you're falling behind on your retirement goals.
Optimize Your Tax Strategy
- Reflect on any tax challenges you faced in 2025. What steps can you take in 2026 to reduce your future tax liability? Strategic tax planning throughout the year can make a meaningful difference.
Update Your Estate Planning
- Review your trust and will, and verify that all your beneficiaries are current. While this rarely tops anyone's priority list, having these documents in order can save your loved ones from dealing with courts and complications during an already difficult time of loss.

Taking these steps now will help you build a stronger, more intentional financial future for the year ahead.

Things We’re Reading and Enjoying

The 60/40 Portfolio: A 150-Year Markets Stress Test | Morningstar-Emilia Fredlick

The 60–40 portfolio, with 60% stocks and 40% bonds, has been tested time and time again. After extended periods of market strength, investors naturally question diversification. After the recent bear market, which started in 2022 and happened to be the only time the 60–40 portfolio hasn’t done better than the stock market, this question has been brought back into the spotlight. Morningstar reviewed 150 years of data analyzing how this portfolio has fared in various market environments, including the one that began during the tech bubble.