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From Computer Scientist to Finance Educator
- 10-K Diver came to investing with no finance background, starting as a computer scientist.
- He struggled with jargon and complex concepts, inspiring him to simplify finance for others.
Understanding Volatility Tax
- The volatility tax explains why highly volatile investments can yield lower long-term returns than expected.
- Arithmetic returns overestimate gains; the geometric average shows compounding effect reducing actual growth.
Apply Mental Models Habitually
- Use mental models like probability, base rates, and conditional thinking to improve decision-making.
- Think habitually using these models rather than picking them actively for each decision.