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4 Must-Have Legal Documents, The "Focusing Illusion" Explained, and More

The F.I.R.E. movement: "This is my biggest regret..."

Author

Benjamin Daniel, CFP®
August 16, 2025

Read Time: 4-minutes

Happy Saturday,

Here is this week’s edition of 6-Point Saturday — financial insights to help you make smarter money decisions.

Table of Contents*

*Clickable in the online version. 

Point #1 — Common Misstep: The “Focusing Illusion”

“In his iPhone notes, the comedian Kevin Hart records random thoughts and observations that later develop into the material for his comedy. ‘If I show you my notes on my iPhone,’ he told Jerry Seinfeld, ‘you wouldn’t understand it.’

It’ll go, ‘Expensive purchase, no response.’ In my head, I know what that means.”

“‘Expensive purchase, no response’—that was when I was buying expensive things because I thought that an immediate response from the world comes with expensive stuff.

Nobody noticed my expensive stuff when I got it.

Nobody said anything.

That’s a true story. That was about a watch. I bought this…watch. I took it back.”

Seinfeld replied, ‘That’s the stuff I like: taking something small and making it big. That is a really small, little, funny human thing. You think when you buy something expensive, that everyone’s going to notice. Nobody notices.’”

“Nobody notices.”

Wow.

Think about how much we buy to impress other people…who may barely even notice.

“Our research suggests a moral, and a warning: Nothing that you focus on will make as much difference as you think.”

Kahneman coined the term the “Focusing Illusion” to describe this common cognitive bias that places too much emphasis on one factor in a decision.

This shows up everywhere in our finances & career:

  • Taking a new position because of salary or prestige

  • Trying to reach FIRE (Financial Independence Retire Early) too quickly at the expense of enjoying the moment

  • Buying a vehicle or home because we think it'll make our lives so much better

The key is to consider the whole picture, including the pros and the cons, when making these significant decisions.

Another thought exercise we can use is what’s called conducting a Pre-Mortem analysis.

In a Pre-Mortem analysis, we imagine that the option that we’re enamored with ultimately ends up disappointing or failing entirely.

Then, we list the most likely causes.

Framing it this way helps identify potential pitfalls and drawbacks of an option that we tend to overlook.

That way, we can ultimately make better, more fully-informed decisions and minimize regret.

One of the best ways to minimize regret?

Get these 4 legal documents prepared:

  1. Will: directs your belongings to beneficiaries after death (overriding your state’s default rules)

  2. Health Care Power of Attorney: authorizes a trusted individual to make healthcare decisions on your behalf, should you become incapacitated

  3. Living Will: allows you to specify in advance, your preferences for important health decisions (like artificial respiration, feeding tubes, etc.)

  4. Financial Power of Attorney: authorizes a trusted individual to make financial decisions on your behalf

Technically, these documents are part of what’s called “Estate Planning.” But most people hear the word “Estate” and automatically tune out, assuming it’s only for the ultra-wealthy.

But these are foundational documents that every person needs.

A few other related tips if you’re married or have a partner, as I mentioned in this Kiplinger article this week:

“If you're the one managing the household finances, simplifying the number of accounts can make a world of difference for your spouse later on,” says Benjamin Daniel, CFP® and financial planner…

Daniel urges documenting where assets are held, how bills are paid, key contacts and account passwords.

He also recommends survivorship-friendly tools, such as joint accounts, transfer-on-death designations and updated beneficiaries."

Point #3 — Biggest “F.I.R.E.” Regrets

If you’re unfamiliar with the term FIRE, it stands for “Financial Independence Retire Early.” It’s a strategy and movement for accelerating the time it takes to become financially independent.

One of the biggest challenges with this strategy is finding balance, or not going overboard, so that you enjoy today while saving for tomorrow.

“For me, I regret some of the friendships I should have nurtured more as I was too busy trying to maximize earnings, with taking high pay jobs and relocating, to try to hit my numbers.”

And missed moments:

“I probably would have taken a few more vacations. We were invited to go on some trips with friends but turned them down. One was a Disney cruise which would have cost about $10K that we didn’t do. After reading Die With Zero, I realized we missed our opportunity to do that with our kids when they were the right age to appreciate it.”

These can be the result of the “Focusing Illusion” in action: overly focusing on maximizing earnings while undervaluing life experiences that have a limited window.

The result can be extra money in the bank, but opportunities you can’t get back.

If you’re considering FIRE, try the Pre-Mortem exercise in Point #1 above: Imagine you’ve reached your goal, but feel regret. What did you miss along the way?

That single question can help you reach your financial goals without missing the experiences you’ll treasure most.

Point #4 — Stock Buybacks Explained

So, what are stock buybacks exactly, and how can they be beneficial to you?

Buybacks are when a company buys back its own shares, lowering the number of shares outstanding.

While controversial (if companies purchase their shares when overvalued), buybacks can be another way for a company to distribute capital to shareholders, similar to issuing dividends.

Except dividends are taxed, whereas buybacks increase your share(s) value, without an immediate related tax.

So, you can think of buybacks as an indirect way to receive value, without the immediate tax bill.

Point #5 — Quotes of the Week

Continuing the “don’t overvalue one decision factor” theme, which of these is your favorite?

“People who are right a lot listen a lot, and they change their mind a lot.”

— Jeff Bezos

“The first principle is that you must not fool yourself and you are the easiest person to fool.”

— Richard Feynman

“Instead of wondering when your next vacation is, maybe you should set up a life you don’t need to escape from.”

— Seth Godin

Point #6 — My Question of the Week

What's one of the better financial or career decisions you've made in the past? Is there a decision you're considering today (E.g., a job offer, relocation, big purchase, etc.) that could be susceptible to the “Focusing Illusion,” or overly valuing one attractive factor while overlooking others?

Reply to let me know! I read every response.

Thanks for reading — I hope you found a helpful idea or two.

I’ll see you next Saturday with more.

Have a great weekend,

Benjamin Daniel, CFP®

Founder, Money Wisdom

P.S. Want to take control of your money (and stop stressing)? Here are 2 ways I can help:

  1. Financial Health Check: Get your biggest money questions answered, understand where you stand financially, and get a personalized action plan from a CFP® professional. Book a free Intro Call here (or purchase today) to see if you’re a good fit.

  2. Financial Coaching: If you’d like some accountability in getting your finances into shape, engage in financial coaching. Build the habits & systems to help you start building wealth, pay off debt, and feel confident about achieving your goals. Reply to this email and say “Coaching” to join the waitlist.

Disclaimer:

This material is not investment or tax advice. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading this material can be accepted by the publisher.

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