Will vs. Living Trust - From a Stockholder's Standpoint

Numerous articles have been published regarding the differences between wills and living trusts - I'm not going to recap that here.  However, unfortunately, I have had to learn a thing or two about trusts in the aftermath of the passing of a relative.  The trust does not involve me, but I have been privy to some of the details of the settlement of the trust and, as I am intrigued by anything markets/investing/stock trading, I picked up a few gems that could save a bundle of cash (for you or your heirs) if handled correctly.  Keep in mind, I am not advocating that you set up one over the other; I am simply going to dissect the difference from a very specific perspective:  the giving of stock to relatives in the event of a death.

A trust is set up by a living person who wants to place stipulations on how their estate is handled.  For example, a trust can define the terms under which a child takes control of an asset - possibly stating that the child must turn 18 or earn a college degree.  A trust does not require settlement through "probate", meaning it basically stays out of the courts.  A will does enter probate (of course, there are some exceptions to the rule).  Also, a trust is worthless until it is funded with assets.  The trust and the assets may remain in control of the trustee until he/she passes away, then the beneficiary can take control of the assets.  Those are basic differences - many more specific technical differences can be researched here.

Investing in Others' Dreams

I recently have had the opportunity to invest in a small startup restaurant in my home town, the owner being a high school friend/acquaintance from years ago.  He is only looking for a little startup capital - rent and labor in our town is so cheap; the downtown building he wants to lease/purchase will cost something like $700/month and it is in the heart of our town of 20,000 people.  Our downtown used to be more vibrant.  Or, at least, that's how I remember it growing up.  We have an old courthouse in the center of town that gives the town character and a welcoming feel, our Fourth of July parade is packed every year, we have nice clean lakes that are great for boating and fishing, and the downtown area has potential if the right people were involved.  The compassionate, nostalgic part of me wants to give him his money and hope he succeeds.  The logical, business side of me says, "Restaurants fail.  Bad investment" - even if it is a relatively small sum.

Entity and Incremental Learning

From Business Insider

I've been on a bit of a psychological kick lately digging into books like "Bounce" and "Thinking Fast and Slow" - which is quickly becoming one of my favorites and, by far, one of the most informative I've ever come across.  "Bounce" mentions some of the work of Carol Dweck, who was the author of "Mindset", which contains some mind blowing information on how our minds work and how we can condition them to focus on success.

While her book was a great read, I had forgotten - or, more likely, didn't yet understand - how enlightening her concepts really were.  That was until a couple of months ago.  Not only did her writing continue to pop up in a number of books I had been reading, but my son was born.  After seeing how fast little babies pick up new habits and how quickly they learn, I began to think about the best way to raise him from a psychological standpoint to empower him to live the best life he possibly can.  I remembered Dweck and gave myself a refresher of her teachings, which took on an entirely different meaning than the first time I plowed through "Mindset". 

One of the tenets of "Mindset" was the distinction between entity and incremental learning.  Entity learning was the belief that brainpower and intelligence were innate and could not be improved.  It gave the individual a sense of entitlement.  On the opposite end of the spectrum was incremental learning:  the belief that "the novice can become the master" (quoted from "The Art of Learning").  Empowering! 

Deliberate Practice in Pursuit of Goals

For years now, I've been enthused and passionate about investigating the role of talent in shaping the person we become in our lives.  Books like "Talent is Overrated" by Geoff Colvin, "Outliers" by Malcolm Gladwell, and "Mindset" by Carol Dweck had huge impacts on shaping my perspective about innate abilities and showing evidence that we all truly have much more control over our lives than we initially assume.  I have recently read "Bounce" by Matthew Syed, who was an Olympic table tennis player for Great Britain.  He had won numerous European table tennis championships as well as Commonwealth Championships - but readily admits to choking in the 2000 Sydney Olympics.  At that point, he began to investigate the intricacies of success, why some experts choke, and the role of genetics in shaping our talent.  The book was phenomenal (I hope to do a write up on it soon).  Syed knows a thing or two about success in athletics at the highest levels, which gives the book some validity over the others, who were written by psychologists and journalists.  "Bounc" is like "Talent is Overrated", "Outliers", and "Mindset" on steroids (in fact, Syed even talks about steroid use in sports!).

Anyway, it was another eye opener into what we are truly capable of accomplishing with, as Colvin defines it, "deliberate practice".  Deliberate practice can be thought of as hours of focused practice - not going to the driving range to hit golf balls, but going to the driving range, focusing on the grip for hundreds of swings, then focusing on the backswing for hundreds of swings, etc.  Ideally, you'd be able to film yourself or receive immediate feedback so you can make minor adjustments.  Watch this talk from Colvin.  While this task is much different than perfecting a golf swing, the message remains unchanged: