WHILE JIM AND I cooked dinner the other night, we talked about the old cars we drove when we were younger—and how they tended to pull to one side if we took our hands off the steering wheel. We humans have a similar tendency: We head in one direction unless we make a conscious effort to be more rational.
That brings me to the coronavirus and accompanying stock market plunge. We all have gut reactions to news like this.

HERE’S THE LEAST surprising thing you’ll read this week: You can’t control the financial markets. They’re driven by news—and we simply don’t know what news we’ll get in the weeks and months ahead, whether it’s about the spread of the coronavirus, its impact on the global economy or something else entirely.
But don’t despair: There’s also much that we can control, including how much we save and spend, the amount of investment risk we take,

I’M WRITING THIS just before 6 a.m., following a few days during which world stock markets caught their own version of the flu. Frankly, I can’t sleep thinking about what’s happened—and especially about the investors who panicked and locked in their losses, just like so many folks did in late 2008 and early 2009.
It took me a few minutes to muster the courage to look at my 401(k). When I did,

HOW OFTEN DO YOU think about money? Hey, you just did. Seriously, we think about money every day and sometimes every hour. Some studies say we ponder financial matters even more often than the old standby: sex.
We’ve been thinking about the stuff for a long time. Money goes back about 3,000 years. Paper currency can be traced to China in 700 BC. They didn’t fool around: Their currency stated that all counterfeiters would be decapitated.

ONE OF MY FAVORITE movies of recent years was Hidden Figures. There’s a pivotal scene where the hero, Katherine Johnson, realizes they need to use an ancient numerical technique known as Euler’s Method to solve the trajectory equations for John Glenn’s mission. This involves breaking a complex problem into very small pieces, solving each part, and then summing them to get the solution.
Over my engineering career, I used various numerical integration techniques to solve complicated problems.

FROM AN EARLY AGE, I was amazed at the power of mathematics to model our world and solve real world problems. In engineering school, we studied a host of mathematical techniques that did just that. But I wish we’d spent more time on probability and statistics.
In 1989, I read a book that gave me a broader view of how probabilistic our world is and, at the same time, made me aware of how ill-prepared the general population is to understand these concepts.

BEATING THE STOCK market over the long term is no mean feat. Only a tiny proportion of investors—professional or otherwise—manage to do it. So why do so many people think they can?
Meir Statman, a finance professor at Santa Clara University, cites eight key reasons. In a new monograph titled Behavioral Finance: The Second Generation, he slots these reasons into two broad categories—five cognitive and emotional errors, followed by three expressive and emotional benefits:
1.

I USED TO THINK anybody could be taught to manage money sensibly. I no longer believe that.
When I was in my 20s and scraping by on a junior reporter’s salary, I had some sense for the financial stress suffered by everyday Americans. But after a handful of years of diligently saving, I was able to escape those daily worries. Many Americans, alas, never do.
This was hammered home when I recently took the financial well-being questionnaire offered by the Consumer Financial Protection Bureau (CFPB).

WHY DON’T WE SPEND our time and energy on financial issues that have the greatest impact? We’ll drive to a more distant gas station to save 10 cents a gallon, but fail to do all the maintenance needed to extend the life of our car. What lies behind this sort of behavior? The savings from getting the best price per gallon is concrete and immediate, while maintaining our car is long term and abstract.

MONEY HAS ALWAYS caused me stress. As a child, I worried my parents didn’t have enough, even though I had no idea what sum would have been considered enough for our family of six. In college, I worried about accumulating debt. I ended up living so frugally that I managed to save nearly all of the Pell grant that the government awarded me. I not only graduated debt-free, but also had a sizable emergency fund in place as I moved into adulthood.

“RESOLUTE” IS THE wrong adjective to describe most of us at the start of a new year. We know what we should be doing for our future self. But within weeks, days and sometimes hours, we forget about the person we’ll become.
What can we do to improve our odds of success in 2020? As Stephen Covey taught us years ago in The Seven Habits of Highly Effective People,

“DON’T STOP THINKING about tomorrow,” sang Fleetwood Mac. It’s a shame they weren’t financial advisors.
We save money today so that we—or our heirs—can spend at some point in the future. A good tradeoff? I strongly believe that it is, and you wouldn’t be a HumbleDollar reader if you disagreed. Still, during this season of holiday shopping joy, it’s worth reminding ourselves that, yes, we should indeed think about tomorrow.
Living for Today.

WE HAVE A HARDWIRED biological incentive to promote the wellbeing of our kids, so that the family line will continue. This is the selfish gene in action. Yet modern human behavior suggests that the wiring may be at least a little faulty—for three key reasons.
Environmental. Our domination of natural resources continues to create tremendous improvements in global wealth, but it sometimes comes at the expense of the only confirmed habitable space that’s practical for our species.

WE ALL DO THINGS that make us feel good right now, but which aren’t so good for us over the long haul. Yes, even me. Yes, even you.
Some of this behavior stems from hardwired instincts passed down to us from our hunter-gatherer ancestors, like our tendency to consume whenever we can and to focus too much on today, while giving short shrift to tomorrow. Other damaging behavior is the result of habits we’ve developed,

MY GREAT-UNCLE, Jerry Kelly, was an American pilot in the Second World War. On Oct. 20, 1944, he was flying a close-support mission over Germany when his P-47 Thunderbolt was hit by anti-aircraft fire. After he radioed that he had smoke in the cockpit, his plane began losing altitude and was last seen disappearing into a cloud. Jerry was 20 years old.
More than 71 years later, a UPS carrier delivered a blue box to my home.