ABSTRACT
Most people want to maintain self-control and implement decisions that provide benefits over the long term. Common ways to control the environment are to remove desired objects from the area or avoid situations that are likely to cause self-control problems. People find it psychologically easier to save from a lump-sum payment than from regular income. The investment earning in an Individual Retirement Account (IRA) grow tax deferred because no income or capital gains taxes are paid on the profits each year. A long-standing puzzle in traditional finance has been why individuals have a strong preference for cash dividends. The investor who wishes to maximize wealth and cash flow should seek income through homemade dividends rather than cash dividends. The advice focused on improving portfolio efficiency through better diversification and it was generated from a mean-variance optimizer targeted to the client's level of risk aversion.
