Does anyone else remember the Matthew McConaughey Lincoln commercials, littered with pithy one-liners? I, for one, will never forget this marketing campaign. For those who haven't seen these precious gems, I'd describe them as a blend of a luxury car commercial, a famous actor, and the movie Fear and Loathing in Las Vegas. Perhaps that description doesn't make sense, but in a lot of ways, neither do the commercials😉. One line from McConaughey that really resonated with me was, “Sometimes you gotta go back to actually move forward.” Surprisingly, this idea connects well with my daily work as a financial planner

Going Backward to Move Forward

Investors had plenty to celebrate in 2024. The economy proved stronger than many had anticipated, with the stock market reaching 57 new highs and surging another 25% over the year. But sometimes you gotta go back…and in mid-December, the stock market changed direction. The Dow Jones Industrial Average faced ten consecutive days of losses—the longest streak since 1974. This downturn was exacerbated by the Federal Reserve’s meeting on December 18, which caught the market by surprise when the Fed delivered a “hawkish cut,” meaning that although they loosened policy rates, they signaled a more aggressive stance moving forward.

Nonetheless, much of this decline was healthy, as it removed excess post-election speculation, thereby reducing the risk of a crash and providing the market with a stronger foundation to actually move forward.

How You Got Here

The field of behavioral finance is compelling because it underscores a universal truth: no one is immune to the psychological influences that shape our financial decisions. Our "money scripts"—deeply ingrained beliefs about money—profoundly impact how we save, invest, and view wealth. These scripts are often rooted in early childhood experiences and family dynamics.

Philosopher René Girard referred to this phenomenon as "mimetic behavior." According to Girard, we shape our identities by observing and imitating others, often driven by a desire for acceptance. This influence extends to our financial behaviors, many of which trace back to the patterns we observed in childhood—how our parents approached spending, saving, and debt.

In my experience, these learned behaviors can become significant barriers to achieving financial goals. Negative associations with money, an aversion to saving, fear of a stock market collapse, or biases that cloud judgment during critical financial decisions often stem from these early influences. To overcome these hurdles, we must first recognize their origins.

As the commercial suggests, understanding "where you came from, where you’ve been, and how you got here" is essential. Awareness of how your attitudes and beliefs about money were shaped allows you to break free from unproductive cycles of imitation. This reflective process helps distinguish between goals that are genuinely your own and those driven by external influences. Armed with this clarity, you can move forward intentionally, aligning your financial decisions with your authentic values and aspirations.

Don’t Drive a Lincoln Because It’s Cool

Fortunately, much of what we learn is positive and socially appropriate. However, some implications of mimetic behavior can have negative effects on our financial success. Observing and imitating others often leads to comparisons—between ourselves, our family, friends, and even our neighbors.

"Comparison is the thief of joy." – Teddy Roosevelt

Comparisons often lead to an unhealthy fixation on the possessions and achievements of others, fostering feelings of envy, inferiority, or jealousy. These emotions can derail financial progress and diminish life satisfaction. In extreme cases, this mindset evolves into rivalry or competition, pushing individuals to sacrifice their well-being in an attempt to "keep up with the Joneses."

This darker side of mimetic behavior can drive decisions that erode long-term happiness. For instance, seeing a coworker buy a new car with their bonus or watching neighbors renovate their home may spark a desire to follow suit, prioritizing immediate gratification over meaningful financial goals. Even when people recognize this tendency, many still struggle to resist its pull.

The truth is, we rarely have insight into someone else’s financial situation. This is something I see firsthand in my work. We don’t know how their wealth was built—or whether they’re even truly wealthy.

Take the coworker with the new Porsche, for example. They might have received a sizable inheritance. The neighbors who remodeled their home could have spent years living below their means, allowing their wealth to grow and making the renovation a well-earned milestone. Alternatively, they may have simply benefited from fortunate circumstances and face little need for financial discipline—potentially leading to unsustainable spending habits.

The lesson here is straightforward: since we can’t see the full picture of someone else’s finances, modeling our behavior after theirs is misguided at best.

Many people prioritize displaying their wealth over making sound financial choices, such as investing excess cash into productive assets. While most would agree the latter approach better supports long-term financial success, the urge to "keep up" often leads to decisions that jeopardize financial health. Recognizing this tendency and staying focused on your own goals is critical to building a sustainable and fulfilling financial future.

Investment Choices

This mimicry also applies to investing. For instance, when we observe someone becoming wealthy from Bitcoin or Tesla, it can be tempting to follow their lead. Because their success seems so effortless, many people want to imitate their actions in order to achieve similar results. However, just like we lack insight into their financial situations, we also don't understand their underlying money beliefs, attitudes towards finances, or levels of risk tolerance.

How were they raised? Do they view money as an endless resource, leading them to invest recklessly? What aspects of their psychology influenced those decisions? Was it brilliance—or sheer luck?

I've previously discussed the "headwind-tailwind" analogy. People who achieve financial success rarely credit their accomplishments to the "wind at their back." Instead, hindsight bias convinces them—and sometimes us—that the outcome was inevitable. They may claim they "knew it all along" and can replicate their decisions in the future.

But don’t be misled. Often, their success stems from an extraordinarily risky bet that just happened to pay off. If you are considering their financial advice, ensure that you can trace their wealth back to a series of savvy decisions they’ve made. Let’s face it: financial advice from someone who won the lottery shouldn’t carry the same weight as that from someone like Warren Buffett, who built his wealth through discipline, strategic investments, and the patience to let his money work for him—rather than the other way around. It’s a philosophy that values the journey, much like McConaughey’s metaphor of taking the long way home in his Lincoln, which can sometimes be the most rewarding.

See Where You’re Going

Before making any significant decision regarding your wealth, Mcconaughey would tell you to pull over to see where you’re going:

• Is this helping you achieve your long-term financial goals?

• Are you making a purchase out of envy or necessity?

At first, you might not change your course and continue with your original intention. However, by asking the right questions, you can identify the motivations behind your decisions. By reflecting on the origin of these motivations, you can consciously override them and set yourself on a path that truly aligns with your goals.

Find Your Path

For those of you who haven't seen Jim Carrey’s parodies of the Lincoln commercials, you need to take a second and watch them. They're pure gold. There’s a scene where the kids in the back of the car say, “Dad, you’re going 5 mph,” and his response is, “Not bad for a Lincoln.” Aside from being absolutely hilarious, it carries a deeper message: it’s not about what other drivers are doing—all that matters is taking the best path for yourself.

I hear countless stories of people chasing quick wealth or searching for a silver bullet. While some are extraordinarily fortunate—whether through inheritance, starting a business at just the right time, or benefiting from stock-based compensation that skyrockets in value—these instances are rare exceptions, not the norm. For most, building wealth takes a practical mindset and consistent effort.

Resist the urge to overextend yourself or take on unnecessary risks. There’s no magic shortcut here. Stick with strategies that are proven to work. Slow and steady often wins the race—a principle we’ll refer to in this newsletter as the “Lincoln approach.”

It’s not sexy or cool, but it’s effective. And don’t stress if you like to travel at 5 mph—I promise you’ll reach your financial goals on time. Not bad for a Lincoln….

Noble Pro Tip of the Month

Financial Lessons to Pass Down

Continuing the theme from the newsletter, since the majority of our attitudes and beliefs about money are formed at a young age, many states have recognized this and made significant progress. In fact, 45 states now require some form of personal finance education. However, this still falls well short of what individuals need to succeed in the real world. For you parents out there reading this, instilling financial lessons will help guide your children throughout their lives and pass down a legacy of financial responsibility and family values. Here are a few tips on how you can accomplish this at various ages:

For Children:

Focus on needs versus wants: A foundational understanding of this difference can shape lifelong spending habits. Take your child to the grocery store and ask them to point out which items are needs—like rice, bread, potatoes, etc.—and which items are wants, such as soda or cookies. You could also share an experience of when you chose a need over a want and how it led to a better long-term outcome.

Experiences over comparison: Everyone has different experiences, and comparing those experiences can deprive you of the joy they bring. We all know about "keeping up with the Joneses" or how a rookie player in the NFL may feel inadequate when they "only" make a million a year while teammates sign contracts worth hundreds of millions. Help children focus on the fun they had and what they learned during experiences, reinforcing that happiness comes from those moments, not from comparison.

The concept of value: Explain what value means—money is simply a tool to exchange for something of value. To illustrate this, engage in a game where they can trade toys or other possessions they enjoy. This helps them understand the idea of value in a hands-on way.

For Adolescents:

Own your decisions: Involve your teenagers in financial decisions to help them build ownership and responsibility. Teach them about trade-offs in financial choices to prepare them for future responsibilities, emphasizing that they are accountable for saving toward their financial goals.

Use money as a tool to achieve your goals: Help your teens see money as a tool to achieve their ambitions. Teach them how to use their money effectively by setting financial goals, such as saving for a trip or a significant purchase. Emphasize that money should serve their ambitions—not the other way around.

Social media doesn’t tell the whole story: These technologies amplify pressure to "keep up" and mimic others. Teach them early that social media only shows people's best moments, not the full story. Encourage them to focus on their own goals instead of comparing themselves to others. Suggest reducing screen time to prioritize real-life interactions and encourage celebrating personal achievements rather than fixating on what others are doing.

For Young Adults:

Financial independence: Before choosing an education path or embarking on a career, teach young adults about the importance of financial independence and the power of compounding returns. This encourages them to save early and introduces them to different savings vehicles and simple investment strategies.

The power of human capital: Once they understand time and compounding returns, teach them how investing in education and skills can lead to long-term financial success. By prioritizing investments in education or career development, they’ll see how these choices pay off in the future.

Time is the most valuable asset: Achieving financial success is a marathon, not a sprint. Help young adults set financial goals, review their progress regularly, and focus on personal growth rather than comparisons. Teach them to see time as their most valuable resource and to use it wisely in achieving their financial objectives.

Fun Facts of the Month

• 4th Out of 46: The average year-to-date (YTD) total returns across 46 US-listed ETFs that track country stock markets stood at +8.2% as of 12/11/24. Of the 46, the US (SPY) ranked as the fourth best, with a YTD gain of 29%, behind only Argentina (ARGT), Israel (EIS), and Peru (EPU) (Bespoke).

• Small Business Surge: The first post-election release of the NFIB’s Small Business Optimism gauge saw its biggest monthly jump since 1980 in November. The most cited reason by small businesses for the increased optimism was an improved political climate (National Federation of Independent Business).

• Weak Household Survey: The BLS estimate of employment, produced by surveying households, fell 0.2% year-over-year (y/y) in November. Outside of the COVID shock, it was the slowest employment growth rate for the household survey since July 2010, and y/y job growth readings have been negative in four of the past five months (Bureau of Labor Statistics).

• Egg-flation: November’s Producer Price Index increased 0.4% month-over-month, surprising economists who were expecting an increase of just 0.2%. A quarter of the 0.4% increase was solely due to a 54.6% increase in the cost of chicken eggs (BLS).

• Data Center Boom: Spending on the construction of data centers hit a $30B annualized rate in October, up from an average of $10B as recently as 2021. US technology companies’ net property, plant, and equipment assets rose 14.2% y/y, or $120B, through Q3, reflecting their data center investments (Census, Bespoke).

• Commercial Electricity Demand: Residential electricity demand grew just 1.1% in the three years ending August 2024, but demand from commercial customers, which includes data centers, grew 10.9%. PJM, which manages the power grid across 13 mid-Atlantic states and DC, expects to see its load growth increase by 33% through the mid-2030s… entirely driven by data centers (PJM, Federal Reserve).

• Bitcoin Ownership: Ownership of cryptocurrencies has increased to 6.9% of the entire global population in 2024. The crypto ownership rate in the US is more than twice that at 15.5% and the highest of any G8 country, exceeding the next closest — Canada (10.2%) — by over five percentage points (Triple A).

• Hard to Plan: 13% of US adults say they “don’t know much” or “know nothing at all” about personal finances, and only 27% are confident that they could create an investment plan. When it comes to learning about personal finances, nearly half (49%) turn to family and friends, and a third (33%) get information from the internet (Pew Research).

• Record Contract: Assuming the New York Mets sell out all 41,800 seats across the team’s 81 home games in 2025 (they sold out only four games in 2024), the first $13.59 of every ticket sold for Citi Field would go toward paying Juan Soto’s record $46 million per year contract (Bespoke).

• Losing Streak: December 18th, 2024, marked the tenth straight day the Dow Jones Industrial Average fell, the longest string of losses since 1974. The 30-stock index is down 6.1% over that stretch. Since 1928, the S&P 500 has averaged about one 10%+ correction per year (one every 346 days), but so far there have been no 10%+ corrections in 2024. 2021 was the last year to not see a 10%+ correction, and half of all years since 2000 haven’t had one (Bespoke).

• Brimming Bulls: In November, a record 56.4% of US consumers expected the stock market to trade higher over the next year. Since 1987, November was only the fourth month that a majority of consumers expected higher stock prices. Three have occurred this year, and the other was in January 2018 (Conference Board).

• The Best of the Best: NVIDIA (NVDA) and Netflix (NFLX) have been the two best-performing S&P 500 stocks over the last 20 years. A $1,000 investment in NFLX 20 years ago would now be worth more than $500K, while a $1,000 investment in NVDA would be worth roughly $900K (Bespoke).

• Feeling the Pinch: Credit delinquencies in October 2024 have increased relative to the start of 2023, and the largest percentage increases have been among higher-income consumers. While middle-income consumers have seen a 63% increase in the percentage of accounts that are 60 to 89 days past due, the same category has more than doubled (+106%) for consumers with incomes greater than $150K (Vantage Score).

• Gen “High Expectations:” Gen Z adults (age 18 to 27) say it takes an average annual salary of $587,797 and a net worth of $9.5 million to be considered “financially successful,” compared to an average annual salary of just $99,874 and a net worth of $1 million for baby boomers (age 60 to 78) (Empower, CNBC).

• No Promotion, No Problem: A recent LinkedIn survey found that only 45% of US employees expect to receive a pay raise in the next six months, while just 22% expect to be promoted in the next year. A separate survey from consulting firm Randstad found, however, that 42% of US employees would decline a promotion if offered one (LinkedIn).

• Start Early: 92% of parents with children in grades K through 12 agree that it is critical for their children to learn how to invest to prepare for their financial future, and 74% said that they “probably” or “definitely” would enroll their child in a different school if it offered financial literacy and investment courses (SIFMA Foundation).

What We're Reading

Global Diversification is Still Working | Cullen Roche

“Why shouldn’t I be 100% stocks AND 100% US stocks?”

This short article sheds light on the key arguments for diversification and provides valuable perspective on the subject. In any extended bull market, where returns are ubiquitous, investors tend to habituate toward greed and forget the simple lessons they've learned throughout their lives. Whether this greed takes the form of abandoning basic tenets of investing, like diversification, or concentrating hard-earned savings into a single asset class that has been outperforming, it can lead to costly mistakes.

While it’s true that diversification reduces your odds of achieving the very best outcomes by spreading out your wealth, it also reduces the chances of the worst outcomes. In other words, diversification sacrifices the optimal outcome in order to achieve a good outcome.