One of the toughest parts of writing Your Money: The Missing Manual (and writing Get Rich Slowly every day) has been the constant feeling that I don’t know what I’m doing. I’m an accidental personal finance “expert”. I have no formal training in this stuff; instead, I’ve just read tons of books, blogs, and magazines, and have listened to other people’s stories. I know the things I’ve done worked for me, but how can I be sure they’ll work for other people?
As I wrote recently at my personal site, I’m filled with doubt every day. Every day, I expect to fail. I feel like a fraud. And yet the feedback on both the book and the blog is nearly always positive. Every week, I get e-mail from folks who thank me for helping them turn their financial lives around. How can this be?
I haven’t been able to reconcile these two things — my self-doubt and the actual good my writing seems to be doing — until today. At The Blog of Steve Schwartz, the author recently wrote that he, too, has felt like a fraud. So has his girlfriend:
I recently had a conversation with my girlfriend (going to school for her nursing degree) when she expressed her confusion with some praise she had received from her professor. Her professor had told her that she was the best nursing student she had had in years. “But how the hell could that be true?” she asked me.
See, she sometimes struggles studying, is often worried about doing poorly on exams, and stresses about all of the things she doesn’t quite understand or can’t quite remember. At the same time, she sees other people stroll into test-time confident and carefree. She sees others never asking questions and always seeming to just “get it”. By comparison, how could she possibly be any professor’s “best student in years?”
Schwartz says the secret is nobody knows what they’re doing — it’s just that some people don’t know they don’t know. And when you don’t know that you don’t know, it’s easy to become over-confident, and that’s dangerous. Schwartz says there are three types of knowledge:
- Stuff you know. For me, this includes why index funds are good for most investors, where to open a savings account, and how to open a Roth IRA. This slice of knowledge is by far the smallest for everyone.
- Stuff you know you don’t know. For me, this includes how the commodity market works, the math behind index funds (I know it’s there, but I can’t explain it very well), and just about anything related to student loans. This size of this slice varies depending on the person and the subject. In most cases, the more you stuff you know, the more you realize you don’t know.
- Stuff you don’t know you don’t know. By definition, you can’t possibly know what’s sitting in this category. You may eventually learn it (less than four years ago, I’d never heard of an index fund), but for now, you don’t even know the knowledge exists. This is by far the biggest category of knowledge for all of us.
Schwartz argues that if you feel like you don’t know anything, if you feel like a fraud, it’s not because your “stuff you know” slice is small; it’s because your “stuff you know you don’t know” slice is large. And that’s a good thing.
And so that’s the issue I’ve been facing for years: The more I read about money, the more I know I don’t know, and the less confident I feel. I find blind spots I never knew I had! The more I wrote Your Money: The Missing Manual, the more distressed I was at the stuff I had to leave out. I wanted the book to be a complete guide to personal finance — and it wasn’t.
I’ve come to peace with that now. Not even Get Rich Slowly is a complete guide to personal finance, and this site probably contains more than a million words on the subject (and millions more in the comments from you folks). How could a book of 100,000 words possible contain all the answers? It can’t. So, I’ve done my best to point readers to places they can get more information.
What’s the bottom line here?
- First, it’s okay to feel like a fraud; it means you recognize there’s more to learn.
- Second, don’t be afraid to ask questions. I preach this all the time, and it’s important: If you don’t know, ask.
- Finally, it’s more important to move knowledge from the “stuff you don’t know you don’t know” category than to move knowledge into the “stuff you know” category.
This last point is most important. There’s no harm in knowing you don’t know stuff; at least you know you’re lacking the knowledge, and you can look it up if needed. But when you’re completely ignorant, the stuff you don’t know you don’t know can really hurt you (and others).
[The Blog of Steve Schwartz: No one knows what they're doing, and an excellent follow-up discussion at Hacker News]
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What an awesome post. This is one of those big secrets of life. It’s even got an academic name: Impostor Syndrome. People study it.
“Schwartz says the secret is nobody knows what they’re doing.” That is so right. I was able to finish (and stop worrying and learn to love) graduate school because someone told me to go to where they keep all the old dissertations from years past. I read through them. They were all terrible. Even dissertations from people who are famous now. If they could graduate with a crappy dissertation, well, then so could I. And I did. That’s the way of the world.
The other thing I learned in graduate school was that people who work hard and ask help to fill in those knowledge gaps end up succeeding in ways that those who are afraid to say anything never do. It’s much better to be asking the dumb questions early when everybody is expecting them than to wait until you should already know, and the longer you put it off, the dumber you’ll seem.
One of my friends did her undergraduate thesis testing people’s knowledge and correlating it with how sure they were of that knowledge (it’s a big published paper now coauthored with a couple of professors at UIUC). People who were most confident generally knew the least. Or as NPR put it, the dumbest people don’t realize they’re dumb.
All we can do is keep putting stuff out there and keep learning and trying again and again. We’ll move forward as we do it.
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It’s hard when you’re painfully aware of what you’re lacking, but that means you’re in a good place to grow.
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Its so funny that Nicole (#1) wrote about grad school, becauyse the first thing that I thought about in reading this post was my own dissertation and grad school life. I’m currently trying to finish my diss – I have 2 more months basically to get it done – and the longer I work on it, the more I worry about how much I am not doing in it. I try to remember that its not supposed to contain everything on my subject, and that that’s actually impossible, but the stress of 7 years of PhD work and the politics of grad school and the difficulty of research and writing and money and all of that pile up and makes every sentence seem so damn important.
Every once in a while, and with help from friends and posts such as this one by JD, I remember that I am the expert in my own little topic and that no matter what it looks lke in the end, if the diss gets me my degree and lets me walk away from this grad school process, then that’s all that matters.
After having read Nicole’s post about dissertations and grad school, I’m reminded that grad school in large part is a testing grounds for would-be academics more than anything else. Students are put through various gruelling tests mostly because tehir professors had the same thing happen to them, and on and on. This is helpful to remember as well, as after my graduation I’m likely to leave academia (at least in this mode) behind, because I don’t want to perpetuate this cycle of pain on future generations.
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I think those of us who have chosen the burden, (and great privilege) to try to help people with their money, should be grateful for our immense feelings of self-doubt.
I know, when answering questions, that self-doubt drives me not to be flippant-but do my homework. (sometimes, I admit, I am still flippant-but I am working on it!)
When writing, knowing the pages I have written in my book, or blog, may last forever, is awe inspiring.
You should be humbled by the power of the written word. Knowing the effect your writing can have on people, should make you double and triple check your work.
I think the moment we run out of self-doubt, is the day we should quit.
Thanks for a thought provoking post.
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Wow… I felt exactly like the writer and his girlfriend. While I am in some sense an expert in my professional field, there is still SO much I don’t know! This article really explained it perfectly; better than I ever have been able to.
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This is a great post because I deal with this all the time. I have recently been trying to live by the “fake it until you make it” saying because I feel like I know nothing at work! No matter what cool thing I do or how hard I work, I always feel like I’m about to be “discovered” as the idiot in the lab while everyone else is a true expert. I try to read journal articles of people I respect because I’m always surprised at how they get things wrong also at times.
It’s been years now and I’m still employed so they must not think I’m as much of an idiot as I do! I keep hoping the imposture feeling will pass, but until then, it’s nice to know I’m not alone.
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ha, another PhD here totally identifying with this post. i am known to say things like, “remember, nobody knows what we’re doing. we’re all just making this up as we go along.” i think this principle applies to far more than personal finance- in fact, it may apply to everything. really nice one, J.D.
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Most of us at some point feel like a fraud – I think this has to do with learning early life that we must always “be more” than we are. I am a financial expert, trained, educated and helping people everyday. Your blog is the only one I read with any consistency primarily because we have the same basic philosophy; while some of the concepts are difficult, this is not rocket science and people can become their own financial experts. Do we need to seek knowledge from professionals? sometimes…other times the thing we need most is to reflect on how we want to live with our money and take the steps we know are in OUR best interest. Keep up the good work J.D. – I will buy the book.
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Just re-reading the comments at Hacker News again, and totally love this one: “Sometimes, in conversations with others, I hear them say with complete confidence stuff that I know is total crap. It’s like I just can’t get over how absolutely wrong they are and yet how absolutely right they believe they are. So I start wondering how many times I do exactly the same thing. I mean, how can I know what I don’t know? How much is there? How do I even know if something I really believe is true or not?”
This is such a brilliant summation of my own philosophy. I used to be so damn confident about everything in life. Everything. I was sure I was right. Now, though, that’s not the case. So much of what I think I know comes from my culture — family culture, city culture, regional culture, national culture. This is going to sound crazy, but when Kris and I watch The Amazing Race and they’re in India, we both think it’s like another planet. Here’s a huge population that sees the world in completely different ways than I do. And who is to say they’re wrong and I’m right? No one.
There’s a reason that my personal motto is “Do what works for you.” I truly believe there are few universal right answers. In most cases, there are just subtle shades of grey.
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I was told once that you leave high school thinking you know it all and university thinking you don’t know a thing…and I think that is exactly right.
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Thank-you for this post JD. I am delighted to learn I’m not the only nervous Impostor out there. I do believe what you and others have said – a sign of wisdom is understanding how very little you do know in proportion to how much knowledge is out there in the universe. But the good news is – this means there’s always something new to learn.
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There are actually four types of knowledge:
Things you know that you know.
Things you know that you don’t know.
Things that you don’t know that you know.
Things that you don’t know that you don’t know.
Socrates specialized in showing people that they didn’t know what they thought they knew. That’s one of the reasons they killed him.
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It is very liberating to learn that so many share a similar self-perspective! Thanks for this post…
Professionally I routinely conduct seminars. Years ago when I began and was feel particularly nervous about the quality of my presentation, my mentor told me that even if I get up there and do something completely wrong or miss a major point to never highlight it. He said the audience doesn’t know what they don’t know.
I wonder if he knew how right he was or if he secretly doubted what he was saying?
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JD, this could not have come at a better time for me personally. I really needed to hear this. I am grateful for all of comments, and your opening up this discussion.
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oh, do I know this feeling. I’m in a position at work where everyone seems to think I know what I’m doing and asks me for advice. I have no clue! I feel like my entire degree is a lie.
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JD, for not knowing anything, I’ve sure learned a lot from you. In fact, there is no other source where I have gotten consistently very good information.
I want to thank you too for creating such a successful blog. You have certainly made my life richer through your wisdom.
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The problem is that there are a lot of people out there who are so confident in what they are saying (even if it is complete nonsense) that the rest of us feel insecure even if we know more than the confident people.
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@JD, #9:
I hear you! My problem is this: I know what I don’t know. I’m learning more all the time. But I am completely paralyzed with self-doubt at what I don’t know yet. There are literally times when I don’t want to do things because I say “well, I know I don’t know as much as I want to, so I probably shouldn’t get into it.”
I didn’t used to be this way. I’ve always known there was plenty I didn’t know, but I was confident in what I did know. Then, I went to grad school (man, you’ve got a lot of grad readers) and got the snot kicked out of me. I left with an MS instead of finishing a PhD, and sometimes I feel like I’m still licking my wounds. There was so much I didn’t know, and it got me into a whole world of hurt.
The funny thing is this: I would sometimes get in discussions with postdocs/profs/other grad students, and we’d come to a stalemate where they’d assert something, I’d disagree, and they’d refuse to consider my point of view. I would later go home, look the subject up, and be completely right. This went as far as super basic things, like people who said a specific quote or names of certain hypotheses. It did remind me that even “smart” people don’t know everything, but I still can’t shake that self-doubt that arose from these sorts of interactions.
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I like the frame.
I use a similar one — what you know, don’t know, and need to know next. It helps turn ambiguity into action.
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One of my university lecturers compared this to a balloon: everything inside the balloon is what you know, everything outside is what you don’t know, and the surface of the balloon is what you can see that you don’t know. As you learn more, the balloon inflates, and therefore the surface gets bigger. So, the more you know, the more you realise how little you know.
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I think it is okay to not always know what you are doing. That way it forces you to be cautious and take your moves seriously.
Also, I think its obvious that even our leaders in banking and politics don’t always know what they are doing – if they did, would we be in this mess.
Seems normal to me.
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I also think that the more we ‘know we don’t know’, the more we get a sense of how much we probably ‘don’t know we don’t know’.
That’s also a good sign that we really -care- about whatever subject it is we’re dealing with.
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I agree with poster #17 – some people are so supremely, aggressively, and confidently ignorant and humble people cower in their wake. JD’s right few truths are universal. It’s important to not deny your own inner truth. I’m in grad school to, in class when the prof. asks a question, I often refuse to raise my hand because I’m so afraid of being wrong and most times I’m right.
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JD, IMO a lot of your success comes not from empirical data ( i.e the info you are sharing) but from your approach. You are accessible and people feel comfortable learning *with* you. You come across as very genuine.
The raw data that you share can be obtained in many other places. But those places lack something and apparently those sources are not as helpful to people. Ever tell a friend/family member something and they refuse to believe it, but another person comes along and says the same exact thing and they immediately believe it. It’s sort of like that.
I started reading GRS probably in 2007, along with several other PF blogs. All of them pretty much said the same thing, but I only read 2 on a regular basis now. It’s all about the approach.
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Steve’s girlfriend sounds like one of my favorite students! I teach statistics at a university and work pretty hard to create an open environment where everyone feels comfortable asking questions. Occasionally, there is that one class where the social pressure to look like you’ve got it down takes precedence over learning. UGH!!! I’m here to tell you that professors struggle with these types of classes.
One of my friends, with a masters in interpersonal communication, gave me a tip: have a “plant,” a student you know from a previous semester, sit in your class and ask questions that you know students should be asking. She says it warms up the group. I haven’t had to try this yet, but it’s in my toolbox.
PLEASE ask questions!
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These 3 ideas of what you know (and don’t know), were explained to me in a clever way during my time in the Army. Imagine a circle. Everything you know is inside the circle, and everything you don’t know is outside of the circle. The fine line that defines the circle is what you know you don’t know. By increasing your knowledge (expanding your circle), you are also expanding your knowledge of what you know you don’t know.
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Wonderful post, JD! And the comments are illuminating, as well. The first thing I thought of when reading this was the saying (I believe attributed to good ol’ Ben Franklin, but correct me if I am wrong!) that “The beginning of wisdom is the knowledge of your own ignorance.”
It is always good to remember, in all things, from the environment, to health (Physicians, attend this!) to interpersonal relationships: what we don’t know outweighs what we do know, to such a degree that what we do know appears to be infinitesimal by comparison! There is a humility in this that is worth striving for.
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As someone who worked for a large financial co for a few yrs, I can tell you that banks use your self-doubt to get you to buy “products” you don’t understand. Things that are highly profitable for them and usually bad investments for you. That’s why they say don’t buy any investment you don’t understand. The banks are always inventing new products to deliberately confuse you and get you to rely on them so they can take your money. Insurance biz also does this. In Michael moore’s last movie I think he told how they hire ivy league grad mathematicians to design products an average person couldn’t possibly understand.
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I love this post! I suffer from Impostor Syndrome everyday and at every job, every employer I’ve had over the years: HP, Microsoft…the current employer. I keep expecting someone to call me out because I feel my knowledge and skills are insufficient for my roles (I’ve even publicly stated this on more than one occasion), but I keep getting raises instead. I guess I’m doing something right.
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@25 Georgette– My husband has those classes write questions down on anonymous index cards. I like the plant idea!
I cannot tell you how many times I’ve had students in office hours saying how much they love the person brave enough to ask the “dumb” questions. Because they’re not dumb questions, just questions other people are too scared to ask. My classes that do best are the ones that ask the most questions. They seem to get a much deeper understanding of the material, rather than just a mechanical understanding.
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I’ve seen this described (mathematically) as “The Academic’s Dilemma”.
Let A(t) denote the amount you know at time t.
Let B(t) denote the amount you know you don’t know at time t.
lim A(t)/B(t) = 0
If you’ve never had calculus, this is just a math expression that says as time passes, the amount you know you don’t know dwarfs the amount you know (and presumably you are learning all the time, so that’s saying something).
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JD, keep up the good work. It IS very valuable for people to ‘know what they don’t know’ and recognize there are things they ‘don’t know they don’t know’. Helps keep your writing focused on what you do know. And you’re smart enough to recognize and point out what you aren’t an expert on.
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Excellent philisophical thoughts, J.D,
Imperfection is a natural part of being human. Even our “experts” are not absolute. We tend to seek out those who are “most” knowledgable in a certain topic/ field of expertise, but must always leave room for a “margin of error.”
Confidence is about believing that you are affluent in something, and humility is being able to accept what we do not know, yet being dertemined to gain that knowledge to better oneself.
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This reminded me of a favorite quote from Mark Twain:
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
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JD – This post is a CLASSIC. The next time I get an “impostor attack”… and, sigh, they pop up more often than I’d like, I will whip this right out and marinate on it. The lines that really hit home with me were:
“Schwartz argues that if you feel like you don’t know anything, if you feel like a fraud, it’s not because your “stuff you know” slice is small; it’s because your “stuff you know you don’t know” slice is large. And that’s a good thing.”
This beautiful post of yours also clarified for me why I’ve always felt so uncomfortable around people with infinite, boundless, unfettered confidence (“ie – why can’t I just honor their complete fearlessness, am I jealous of that ability??”). However I’m now thinking it’s a healthy discomfort, for as you wisely say, “But when you’re completely ignorant, the stuff you don’t know you don’t know can really hurt you (and others).”
Lastly – as a staunch feminist, it strikes me how strongly this post is resonating with those of us who are your female fans… not sure if we are just more willing to write about the impostor syndrome or if we truly suffer from it more than men, but it’s an interesting trend to note in the comments.
Thanks again for this incredible piece & all the great work you are doing. I for one, can’t wait to read YOUR MONEY: THE MISSING MANUAL as I know that you know… a lot!
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I think there is a lot of confirmation bias when you claim an ability. I think that’s how faith healers, homeopathy, reiki, chiropractors, acupuncture, spirit guides and all the rest come about. I think most people are likely to say “Yes, that’s much better, thank you!”, and get out quick, rather than say “What the hell?!”. And as the ‘expert’ can be easy to say “Well, all these other people thought I was helpful, so those that didn’t must be crazy, or didn’t do it right, or it doesn’t work for everybody etc…”
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Quite an introspective piece.
But good food for thought for all of us
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I think a little self-doubt is good and keeps us grounded. I know there are things I don’t know about taxes, but I do know where to find the answers (I’ve been doing this 10+ years). Sometimes that is 90% of being an “expert” in the field – knowing the resources available and getting a quick, yet comprehensive answer.
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Ah the five orders of ignorance (Commonly refered to in computer science/engineering classes) are what you are refering to and I just thought I would post them for reflection:
* 0th Order Ignorance: Lack of Ignorance
I know something
* 1st Order Ignorance: Lack of Knowledge
I do not know something
* 2nd Order Ignorance: Lack of Awareness
I do not know that I do not know something
* 3rd Order Ignorance: Lack of Process
I do not know a (suitably effective) way to find out that I don’t know something
* 4th Order Ignorance: Meta-Ignorance
I do not know about the 5 Orders of Ignorance
Remember that in computers we start counting at 0 not 1, never quite figured out why they teach you to count from 1 to 10 instead of 0 to 9.
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I’m a 27 year old that knows enough to know that I don’t know it all…it makes things difficult sometimes since I have to battle natural ignorance and keep an open mind around the ignorance of others.
I love it when people are obviously BS’ing, but if you call them on it, they will argue with you for 2 solid hours and then think you are just being bitchy.
I love those moments of clarity when something just makes sense.
I like knowing that I don’t know it all…life would be boring, wouldn’t it?
I think everybody just needs to keep an open mind and try to BS less.
Oh, and take advantage of the experience of others. I truly learned a bunch from other people’s mistakes, so I don’t have to make them to understand. That has put me ahead financially by at least 5 years.
I share my mistakes with everybody, so hopefully they won’t have to make them too.
For example, I only learned about Roth IRA’s in 2007 (age 24)…my little sisters now know about them at ages 14 and 19…
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My academic friends (all college professors with 5-15 years teaching and research experience, many with tenure) have talked about the same thing. They feel like frauds and keep waiting for someone to find out. As one puts it, “They must know that I’m really just a waitress.”
I think this is a natural feeling that capable, self-aware people have. Because we realize we don’t know everything, we worry that we missed something.
I would worry if you didn’t doubt yourself.
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Hi, Nicole! I’m at UIUC! And yes, other people’s “awesome” papers often suck… I think that says more about the culture of “publish as many things as possible” rather than waiting until you actually have something quality to say, but yeah. No need to be a perfectionist; everyone else sucks!
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JD,
You should check out the book Wild At Heart.
It is a Christian book about what being a man is, but one whole section of the book is devoted to the concept you talked about here, the fear that people will find out you are a fraud.
Also, I recommend No Plot No Problem when it comes to writing. For me it is basically a motivational book about keep on writing and telling that voice inside you to be quiet.
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Great article, JD.
I think this topic is actually crucially important, specifically with respect to money. The things you “don’t know you don’t know” about money can end up being extremely costly, and set you back years. For instance, I didn’t know how “financial advisors” were compensated, and ended up putting too much trust in the salesman. The result was we spent almost a decade buying expensive, actively-managed mutual funds with MERs of 3.75%! We thought we were doing the right thing, being smart, “paying ourselves first” and all of that, but we were getting robbed and didn’t even know it. We could be so much further ahead if we’d only known that we should have learned about MERs.
I could list several other examples, but the end result is the same. We went in with insufficient knowledge (but thought we had all the information), and it cost us dearly (financially) in the end. Now, I’m sure there are still many hazards out there I don’t know about, but I’ve got a much more cynical attitude when it comes to protecting my money. But that attitude came as the result of some very costly lessons in things I didn’t even know I didn’t know.
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Wow. I really identify with this post, and the comments. I didn’t realize other people feel like this too.
Another quote I heard while in grad school, self-esteem decreases every every year you are in graduate school, while self-esteem increases every year you are in medical school.
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Wow. Talk about a timely post — thanks for sharing…and reminding me that its okay for me to not have ALL the answers ALL the time.
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@44 My husband wants to know what happens with MD/PhDs.
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It’s great to hear there are so many others who feel the same way, especially professionally. I’m still relatively new to my field, and unlike many of my colleagues, I studied a totally different subject at school…which makes me feel horribly behind!
Ignorance can always be overcome, and this post helps me put that a bit more into perspective. =)
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I was just reading about this this morning – apparently it’s called the Dunning-Kruger effect.
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