Of the nine investing nuggets from Nobel-Prize winning economist, Daniel Kahneman, here were a few that stood out for beginning investors (from Time):

• An argument for investing in index funds instead of picking individual stocks:  “There is general agreement among researchers that nearly all stock pickers, whether they know it or not – and few of them do – are playing a game of chance.”

• Turn off CNBC and avoid following daily fluctuations of your investments:  “Closely following daily fluctuations is a losing proposition, because the pain of the frequent small losses exceeds the pleasure of the equally frequent small gains. Once a quarter is enough for individual investors. In addition to improving the emotional quality of life, the deliberate avoidance of exposure to short-term outcomes improves the quality of both decisions and outcomes.”

• Don’t discount the impact of luck in investing:  “Success = talent + luck; Great Success = a little more talent + a lot of luck.”

• Beyond $75,000 in earnings, we don’t derive much happiness:  “The satiation level beyond which experienced well-being no longer increases was a household income of about $75,000 in high-cost areas…The average increase of experienced well-being associated with incomes beyond that level was precisely zero.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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