The School of Greatness 518 Become a Master of Finance with Harvard Professor Mihir Desai
Aug 2, 2017
Mihir Desai, a Harvard finance professor, dives into the complexities of financial literacy and its crucial role in decision-making. He discusses the balance between debt, skill, and luck, while emphasizing the need for improved financial education from childhood. Desai also sheds light on the importance of empathy in teaching, encouraging listeners to embrace failure as a learning tool. Additionally, he underscores the power of storytelling in finance, illustrating how narratives can foster greater accessibility and connection in the financial world.
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Use Debt To Access Opportunity, Not Trap You
- Borrowing is liberating when it finances opportunities like education or housing.
- Avoid debt overhang because excessive debt can block your best future options.
Don’t Confuse Short-Term Wins With Skill
- Don't assume short-term outperformance proves skill; distinguish luck from skill over long runs.
- Favor low-cost indexation because persistent outperformance is rare.
Save Early, Use Tax Shelters, And Keep Fees Low
- Save as much as you reasonably can from your early earnings and taper risk as you age.
- Use tax-advantaged accounts and avoid high-fee managers; index funds plus bonds work for most.