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A globally diversified stock portfolio will richly reward you—provided you have the courage to do nothing.
WHO’S YOUR FINANCIAL hero? This should be someone whose qualities and character lend themselves to emulation in your own financial life.
Let’s set some ground rules here for picking a financial hero. First, your hero probably shouldn’t be the usual suspect: Warren Buffett. While Buffett is certainly a very successful investor, the investment game that he’s playing is very different from the one most of the rest of us are.
The same goes for folks like Elon Musk,
I WAS FORTUNATE to find enough time during my working years to pursue various hobbies and other personal interests. My part-time work arrangement allowed me to have four-day weekends. I’d hoped that, after retirement, I would have even more time to take on personal projects.
But surprisingly, I found myself with less free time. Not only was I failing to start new projects, such as writing software for the website of the nonprofit I cofounded,
MOTIVATIONAL SPEAKER Jim Rohn said, “You are the average of the five people you spend the most time with.” His contention: We should carefully pick the folks who surround us because, over time, we’ll become more like them.
Recent research offers some support for this idea. For instance, if we have a close friend who becomes obese, one study found we’re 57% more likely to become obese as well. If that’s so, we might also want to cozy up to skinny friends who count exercise as fun recreation.
BENJAMIN GRAHAM was Warren Buffett’s teacher and mentor. He also ran an investment fund that specialized in uncovering demonstrably undervalued stocks.
One day in 1926, Graham was at his desk, reading through a government report on railroads, when he noticed a potentially important footnote. It referenced assets held by a number of oil pipeline companies. But there wasn’t a lot of detail, so Graham boarded a train to Washington and found his way to the Interstate Commerce Commission (ICC),
AT A FAMILY DINNER in the early 1980s, I remember one of my brothers—probably then age 20 or so—saying, “But isn’t the economy built on sand?”
My economist stepfather offered one of his trademark droll responses: “The economy’s always built on sand.”
The same could be said for the stock market. In the minds of many investors, it’s always teetering on the verge of collapse. After two years of rising share prices, and amid concerns about high stock valuations,
MANY FOLKS CLAIM TO be ready for retirement, both financially and psychologically. But they’re often surprised to discover that the reality is different from what they expected.
I started planning well in advance of my 2023 retirement. I read dozens of books on the subject, and talked to many classmates and friends who’d already retired. Of all the books and videos that I reviewed, one talk on YouTube stood out: a TEDx Talk by Dr.
NO. 10: WE ALL HAVE tasks that we dislike. Research suggests hiring others to do chores we don’t enjoy, like mowing the lawn or cleaning the house, is a great way to use money to buy happiness. In fact, paying others to do chores we dislike is a double win. Not only do we avoid the distasteful task, but also we free up time for things that we truly enjoy.
DON'T RUSH to roll over your Roth 401(k) to an IRA. Once you’re in your 70s, you used to be required to take distributions from a Roth 401(k)—but not a Roth IRA—but that requirement went away in 2024. Result? Now that a key incentive to roll over Roth 401(k)s is gone, you might opt to leave money at your old employer, especially if the plan offers low-cost funds.
NO. 121: HOME PRICES should, over the long run, rise at roughly the same rate as per-capita economic growth. Why? That’s a gauge of our ability to pay. If home prices rose significantly faster, they would become increasingly unaffordable for many folks, who would choose to rent instead—and that waning demand would likely depress property prices.
NO. 61: WHEN in doubt, we should invest long-term investment money in a target-date index fund. Most of us will struggle to design and maintain a portfolio that performs any better.
I NEVER REALLY LIKED the vehicles that I owned. They were an unimpressive lot, including a Volkswagen Beetle, Mercury Capri, Toyota SR5 pickup, Toyota Camry and Ford Fusion. I would like to say they got me where I needed to go, but that wasn’t always the case. All the cars, except for the Camry, were unreliable, which would sometimes make my life stressful and difficult. Of course, keeping those cars for many years didn’t help.
FOR CHRISTMAS, I bought Rachel a saucepan and a universal travel charger for her smartphone. The previous year, I bought her a pair of gloves and socks. She likes gifts that are practical and good value. During December, we prefer to spend our Christmas money on weekend trips. We live in Los Angeles county and this year we went to La Jolla and Las Vegas.
We like to collect pictures of our adventures. We not only store them on the cloud,
I’M STILL WAITING. Along with many others, I have spent much of my investing career expecting five key financial trends to play themselves out—and yet they’ve stubbornly refused to do so.
Sure, these predictions could still come true. But I have my doubts. Maybe these five financial forecasts aren’t the slam dunk they appear:
1. Stocks will revert to average historical valuations. Whether you look at price-earnings ratios, cyclically adjusted price-earnings ratios,
A FEW WEEKS BACK, I discussed the notion of “the four horsemen of the investor apocalypse.” A concept proposed by Morningstar Managing Director Don Phillips, these are the factors that—in his experience—tend to lead investors off course. But what about success? What are the factors that contribute to success for investors?
“Investing,” says legendary investor Warren Buffett, “is not a game where the guy with the 160 IQ beats the guy with a 130 IQ… You need to be smart,
HOW DO SOME INVESTORS end up in places they don’t belong? Where do they turn for information and guidance? Who do they talk to before making important financial decisions?
What follows are the results of my unscientific research, which was conducted in some of the finest and most respected centers of advanced learning anywhere.
Barroom seminars, your window on the world. Are we talking politics, investing, religion, world peace or other topics of paramount importance,
NO. 61: WHEN in doubt, we should invest long-term investment money in a target-date index fund. Most of us will struggle to design and maintain a portfolio that performs any better.
NO. 10: WE ALL HAVE tasks that we dislike. Research suggests hiring others to do chores we don’t enjoy, like mowing the lawn or cleaning the house, is a great way to use money to buy happiness. In fact, paying others to do chores we dislike is a double win. Not only do we avoid the distasteful task, but also we free up time for things that we truly enjoy.
DON'T RUSH to roll over your Roth 401(k) to an IRA. Once you’re in your 70s, you used to be required to take distributions from a Roth 401(k)—but not a Roth IRA—but that requirement went away in 2024. Result? Now that a key incentive to roll over Roth 401(k)s is gone, you might opt to leave money at your old employer, especially if the plan offers low-cost funds.
NO. 121: HOME PRICES should, over the long run, rise at roughly the same rate as per-capita economic growth. Why? That’s a gauge of our ability to pay. If home prices rose significantly faster, they would become increasingly unaffordable for many folks, who would choose to rent instead—and that waning demand would likely depress property prices.
I NEVER REALLY LIKED the vehicles that I owned. They were an unimpressive lot, including a Volkswagen Beetle, Mercury Capri, Toyota SR5 pickup, Toyota Camry and Ford Fusion. I would like to say they got me where I needed to go, but that wasn’t always the case. All the cars, except for the Camry, were unreliable, which would sometimes make my life stressful and difficult. Of course, keeping those cars for many years didn’t help.
FOR CHRISTMAS, I bought Rachel a saucepan and a universal travel charger for her smartphone. The previous year, I bought her a pair of gloves and socks. She likes gifts that are practical and good value. During December, we prefer to spend our Christmas money on weekend trips. We live in Los Angeles county and this year we went to La Jolla and Las Vegas.
We like to collect pictures of our adventures. We not only store them on the cloud,
I’M STILL WAITING. Along with many others, I have spent much of my investing career expecting five key financial trends to play themselves out—and yet they’ve stubbornly refused to do so.
Sure, these predictions could still come true. But I have my doubts. Maybe these five financial forecasts aren’t the slam dunk they appear:
1. Stocks will revert to average historical valuations. Whether you look at price-earnings ratios, cyclically adjusted price-earnings ratios,
A FEW WEEKS BACK, I discussed the notion of “the four horsemen of the investor apocalypse.” A concept proposed by Morningstar Managing Director Don Phillips, these are the factors that—in his experience—tend to lead investors off course. But what about success? What are the factors that contribute to success for investors?
“Investing,” says legendary investor Warren Buffett, “is not a game where the guy with the 160 IQ beats the guy with a 130 IQ… You need to be smart,
HOW DO SOME INVESTORS end up in places they don’t belong? Where do they turn for information and guidance? Who do they talk to before making important financial decisions?
What follows are the results of my unscientific research, which was conducted in some of the finest and most respected centers of advanced learning anywhere.
Barroom seminars, your window on the world. Are we talking politics, investing, religion, world peace or other topics of paramount importance,
I have been challenged by Jonathan. Will he like my response? By RDQ
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