A Wealth of Common Sense book club questions

1. 1.

   Carlson argues that investors' biggest enemy is their own behavior. What is the most expensive investing mistake you've personally made, and what drove it?

2. 2.

   He advocates a written investment policy statement. Have you written one? If not, what has stopped you — and what would happen if you did it this week?

3. 3.

   The book distinguishes between what you know and what you do. Where in your financial life is the gap between knowledge and action largest?

4. 4.

   Carlson says simplicity beats complexity for most investors. What sophisticated investment strategies have you been tempted by that in retrospect you're glad you avoided — or wish you had avoided?

5. 5.

   How do you typically respond to a significant market drop — say, 20% in a month? What would you actually do versus what you know you should do?

6. 6.

   The 1% fee example shows costs eroding terminal wealth significantly. What are the actual total costs on your current investment accounts?

7. 7.

   Rebalancing forces you to sell high and buy low mechanically. Have you ever rebalanced into a downturn? How did it feel?

8. 8.

   Carlson notes that an interesting portfolio — one you have strong views on and enjoy thinking about — is often a more expensive portfolio. How much does the entertainment value of investing cost you?

9. 9.

   Who in your life has the best long-term investment track record? How much of that do you attribute to strategy versus behavior versus luck?

10. 10.

    The book argues diversification's primary purpose is error reduction, not return maximization. Does that framing change how you think about your own diversification?

11. 11.

    If your entire financial life were simplified to three decisions — asset allocation, savings rate, and cost control — which of the three would you most need to improve?

How to run the discussion

• Pick six to eight, not all of them. An hour of real discussion covers fewer questions than anyone expects, and racing the list is what makes a book club feel like homework.
• Open with what people noticed, not what they concluded. Asking for a verdict first hardens opinions before anyone has heard each other.
• Let the disagreement run. The questions below that split a room are the ones worth the time; the ones everyone answers the same way can be skipped.
• Ask the quiet person a specific question. A direct, narrow question is far easier to answer than an open invitation to contribute.