Most life decisions have financial implications and involve both logic as well as emotion. Our empirical observations, within the context of three decades of experience, tell us that emotions comprise the grand majority of this decision making formula. Trying to control the emotional aspect so that it doesn't overwhelm logic is a necessity in making real financial progress.

One of the main components of microeconomics concerns itself with Rational Choice Theory or Choice Economics. In essence this theory says rational people balance costs against benefits when making decisions. Our applied experience demonstrates clearly that otherwise rational people often behave emotionally when making decisions. They want more of the "good" without any consideration of the "bad" (cost). Our major theme this year in our firm is to engage clients to understand "costs, including both direct and opportunity costs when making decisions.

One of the characteristics of emotion based decisions is a narrow and short term focus. One of our roles is to help clients make smart decisions by bringing context and a long term perspective which necessarily layers on more rationality. There are a host of emotional or behavioral biases that can have a detrimental impact to making good decisions. Among the most prevalent (and damaging) is what we term "familiarity bias". This basically means you like what you know. This often manifests itself by way of concentrated stock positions and "bubble" asset purchases. Familiarity can provide a false sense of security by rendering the impression of control.

Our unique process is centered around providing a rational perspective on important life issues that carry financial costs. Previous experiences, worries and feelings about money all are all wrapped up in decisions. Many clients have difficulty articulating what it is they want but usually know what they don't want. Our job is to help identify the cost of each.