Even financial experts pay mortgages early, hoard excess cash—just for peace of mind
50 fund managers and advisors confess in a new book: knowing that paying off mortgages early and holding excess cash is mathematically suboptimal, they do it anyway because psychological comfort matters more than theoretical returns.
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A blog post becomes a publishing contract in 72 hours
Josh Brown wrote a blog post in 2019 titled ‘How I Invest My Money’, noting that in his years in the field, no one had ever asked him personally how he invests. Portnoy read it, texted a suggestion to gather friends into a collection, and from contacting publisher Harriman House to securing a publishing contract took just 72 hours. The first volume, collecting 25 contributors, was published in 2020.
— Brian PortnoyThe key isn't investment advice—it's permission
Across both volumes, 50 contributors were solicited; the result was ‘25 for 25’ both times, with no one declining. Portnoy says the operative word was ‘permission’: fund managers and advisors are typically required only to discuss their professional domain; this book was the first time it ‘allowed’ them to talk about their complete household finances—real estate, insurance, charitable giving. He calls it 50 entirely different life stories.
— Brian PortnoyNo one answered with an asset allocation sheet; everyone explained the why
The brief to contributors was a single sentence: explain how you invest your own money, with no word count or structural template. Almost no one answered with an ‘75% stocks, 20% bonds’ checklist; instead, they answered the ‘why’—writing about family, priorities, fears, and hopes.
— Brian PortnoyRisk appetite originates in childhood, not in spreadsheets
Two behaviors recur throughout the book: paying off mortgages early and holding cash reserves far exceeding the theoretical six-month-expenses benchmark. By market returns, investing that money would be mathematically superior, yet multiple contributors including Portnoy himself chose security over theoretical optimality. This risk preference, the book traces back to childhood and adolescence—for example, those who experienced financial hardship tend toward conservatism later.
— Brian PortnoyThe question isn't which option is mathematically better
Faced with questions like ‘should I pay off my mortgage early, how much cash should I hold’, the real question isn't which option is mathematically optimal, but which fits your temperament and risk tolerance and lets you sleep soundly. Portnoy uses himself as an example: redeeming credit card points for cash back is mathematically superior, but he prefers accumulating points because a few dollars in cash returns slip into his account unnoticed, whereas enough points for an expensive espresso machine brings tangible satisfaction.
Spreadsheet optimal and behaviorally optimal are different things
Behavioral finance author Daniel Crosby draws a distinction: the optimal solution calculated on paper and the optimal solution that actually sustains people long-term are often not the same. Portnoy calls the two volumes a master class in applied behavioral finance—experts were asked to reflect on which kind of ‘optimal’ they chose, and nearly all chose behavioral optimality. He also cites a paper by Wes Gray: a deep value plus momentum portfolio has the highest historical returns but with excessive volatility and drawdowns; the paper's title is simply ‘even if God did active management he'd be fired’.
— Brian PortnoyPersonal finance has no single answer; contradictions don't matter
As Tim Maurer puts it, personal finance is more personal than finance itself. Chapters in the book contradict each other on specifics—some aggressive, some conservative—but this isn't a problem, because everyone is answering ‘who am I, what do I want to achieve’, and a professional's advice to clients needn't match his own life constraints of raising children, supporting parents, and participating in his community.
— Brian PortnoyAfter editing two volumes, his philosophy didn't shift
Asked whether editing these two volumes changed how he invests, Portnoy says no. Good financial planning starts with looking in the mirror, he says; he settled long ago on simplicity, diversification, and compound growth as his principles—they are his longtime anchors and won't shift because of 50 other people's stories.
— Brian PortnoyIn their own words · checked verbatim
Well, I'll say from me texting Josh to us having a book contract was about 72 hours.
Brian Portnoy2:06
a word that has surfaced with the publishing of these two volumes that I think is so important to being successful financially, which is permission.
Brian Portnoy3:07
And people tended not to answer the question how I invest my money. They leaned into why I invest my money.
Brian Portnoy7:18
The question is for you and your personality and your risk tolerance and your just sense of well-being.
there's a difference between spreadsheet optimal and behaviorally optimal.
Brian Portnoy17:25
he titled the paper, Even God Would Get Fired as an Active Manager
Brian Portnoy18:25
personal finance is more personal than finance.
Brian Portnoy19:28
No, no, because I think good financial planning starts by looking in the mirror.
Brian Portnoy21:32
Figures
| Time from blog idea to publishing contract | 72 hours | 2:06 |
| Total contributors across both volumes | 50 (25 per volume, zero refusals) | 4:13 |
| First volume publication year | 2020 | 2:06 |
| Portnoy's marriage duration | nearly 35 years | 16:24 |
Glossary
- Spreadsheet optimal
- The theoretically best solution calculated by mathematical models without regard for the user's psychological comfort.
- Behaviorally optimal
- A choice that, though not theoretically optimal, provides psychological comfort and enables long-term adherence.
How to listen
Financial advisors, fund managers, and investors and entrepreneurs curious about how professionals manage their own money privately.
The first few minutes on the book's publication process and details about the list of contributors can be skipped.