Options in Disguise
Sanjib Saha | Jun 28, 2022
DO YOU INVEST IN options? Think twice before saying that you’d rather go to Vegas. My bold claim: Options investing has a lot in common with investing in stocks and corporate bonds. Intrigued? Let’s recap a European style call option. It’s a discretionary contract that allows someone to buy an underlying asset at a set strike price at a future date. Let’s say the buyer of the call, Bob, has an option on a stock with a strike price of $100. Bob will only exercise the contract if it’s profitable. If the stock price rises to $150 by the time the option expires, Bob can acquire the shares for $100 and immediately sell them for a $50 profit. On the other hand, if the stock price drops to $80, Bob has no obligation to exercise the option. His call option will simply expire worthless. Bob’s only chance at profit comes if the underlying asset clears the strike price. That brings us to the option seller, Shelly. She owns the underlying stock and is participating in a covered call, meaning she’s selling a call option on an asset she already owns. In return, Shelly receives a call premium from Bob. Selling covered calls is a popular strategy for generating extra income. In exchange for the income she receives from selling the covered call, Shelly risks having to sell the stock at the strike price. If the shares rise to $150, Shelly must still sell for $100. The covered call limits her payoff. If the asset doesn’t exceed the strike price, Shelly keeps her shares and pockets the income. What if the stock falls? Shelly still has her option premium, but that may be more than offset by the share price decline. Now, let’s consider the positions of stock and bond investors…
Read more » Simply Works
Sanjib Saha | Oct 25, 2021
I THANK MURTHY, a friend at college, for teaching me guitar. Instead of theories, he taught me five easy chords. I could soon play a few songs and that fueled my motivation to learn more. The same strategy can help beginner investors. Novices often find the stock market intimidating and mysterious. Result? Inaction and opportunity cost. Solution? Simple steps. A former coworker comes to my mind. He was uninterested in stocks, including the company shares he received as part of his pay. He sold the shares immediately—often the smart thing to do—but he didn’t know what to do with the cash. For people like him, a simple solution is a fund like Vanguard Total World Stock ETF (symbol: VT). No need to research individual stocks. All my friend had to do was sell his company shares as he received them and then buy this fund. Over time, his interest in investing grew, and he’s no longer ignorant about the stock market. Another example: A friend’s daughter needed help with investing. She learned fast and decided to invest equal amounts in four commission-free index funds. She adopted a shortcut for rebalancing. Whenever she had money to invest, she’d buy the fund with the lowest balance. Was this the best strategy? Maybe not. But it works for her. My last example: A recent acquaintance had a large sum sitting in her bank account for years. She was too afraid to invest and too embarrassed to ask. After we chatted a few times, she realized that—while she was avoiding risk—she was also avoiding return. She decided to start investing in small installments, but invest less if stock prices were high. To keep things simple, she transfers just enough from her bank each month so her investment account reaches a fixed dollar target. If…
Read more » Aging Well
Sanjib Saha | Jul 3, 2023
LIKE MANY IMMIGRANTS living in the U.S., I regularly return to my hometown to visit family and friends. My trips to Kolkata are usually short and jam-packed, seeing not just contemporaries, but also the older generation, including aunts and uncles, my parents’ friends and my friends’ parents. My two recent visits—one last fall and the other this spring—were no exception, but I had mixed feelings this time. Most of the older generation are now in their 70s and early 80s, and two of them had passed away since my last pre-pandemic visit. I was happy to be able to catch up with the rest. But I was also saddened and surprised to find that, since my last visit, a few didn’t seem to be doing well emotionally, as if they’re struggling to find meaning in life. On the surface, health problems and mobility issues are to blame, but that alone doesn’t explain such a change within a few short years. With most of their family members or adult children living elsewhere, these folks have no one to lean on for day-to-day support. They resist getting professional in-home senior care services or moving to retirement communities. This mental block is cultural and emotional, not financial. Meanwhile, the rest of my older acquaintances seem to be having a great time in their golden years. They, too, face health and mobility issues, but these don’t appear to affect their positive outlook on life. The best example is my maternal aunt—my mother’s younger sister—whom I call Mashi. Despite dealing with several family tragedies within the past year, including losing her husband of 50 years after a long period of ill-health, Mashi remains upbeat and full of energy. If you were to guess her age based on appearance and activities, you’d probably be off by…
Read more » Cost of Living
Sanjib Saha | Aug 29, 2019
I TUTOR MY 10-year-old niece once a week in math and science. After the study sessions, we often talk about other things—mostly kid stuff. Recently, her treasured piggybank got a nice boost on her birthday and we discussed what she might do with the money. That’s when my niece asked, “How much money will I need when I grow up?” I guess she was trying to figure out if she did indeed have to study hard and get a job—or whether her current savings would be enough. I laughed and told her that she would definitely need to work, just like the rest of us, because she’d need much more money than her piggybank held. Still, in retrospect, I think her seemingly innocent question can be a good starting point for introducing teenagers and young adults to the topics of money and careers. As children grow, they generally develop a sense for why money is important—but there’s no easy way for them to gauge how much they need. A ballpark estimate can give them perspective and help them to double-check whether a career path will meet their financial needs. It can also force them to learn more about basics of smart money decisions. When I started my career, I knew I needed to work hard, earn a decent wage, avoid overspending and save regularly. But beyond those abstract notions, there was no concrete, holistic target in my mind. A rough roadmap—even one with a large margin of error—would’ve helped me to plan and organize my financial life better. It isn’t too hard to come up with a ballpark estimate. Let’s ignore inflation and instead think about everything in today’s dollars. Let’s also assume a hypothetical couple who start a household at age 30, work for 30 years, raise two kids,…
Read more » Bonding With Bonds
Sanjib Saha | Dec 5, 2019
FOR MANY YEARS, I didn’t own bonds or anything similar, except some bank certificates of deposit. Frankly, I was clueless. My first dilemma: Should I invest in bonds if I have a mortgage? It didn’t make sense to me to borrow from the bank and, at the same time, lend out my money at a lower interest rate to a bond issuer. I felt I should pay off my mortgage first. A few friends and even a financial advisor recommended otherwise. Their objections notwithstanding, I followed my intuition. I was relieved to find out later that my view wasn’t so naïve after all. Fast forward a few years and I had the mortgage paid off. A magical side effect: My entire paycheck no longer disappeared. For the first time in my career, I realized I could take a long break from work if I had to. This feeling of freedom planted the idea of early retirement in my head. I probed my financial readiness and realized that bonds would now play a vital role. For the next few months, I researched bonds, including different kinds, the risks, credit ratings, taxation, liquidity and so on. Alas, I was left with more questions than answers. What percentage should I allocate to bonds? Individual bonds or bond funds? Is credit risk real? Should I worry about duration or convexity? What about inflation? Tax-exempt or taxable? Government or corporate? Overwhelmed and confused, I needed a simpler approach, so I started over, but this time with a basic question in mind: What are the big problems with my retirement finances and can bonds solve them? This gave me much needed clarity. My financial situation posed two challenges. First, my modest nest egg needed a high stock allocation to survive a longer-than-average retirement, and yet I also needed…
Read more » Feelin’ Groovy
Sanjib Saha | Apr 30, 2020
I’VE BEEN WORKING from home for nearly two months. Many friends and coworkers are tired of the lockdown. I seem to be an oddball: I feel happier and less stressed. I’m not oblivious to the reality of today’s pandemic. As I write this, my uncle abroad is facing a hard time getting urgent medical care. Millions of others across the globe are also suffering. Against such a gloomy backdrop, I feel almost guilty in seeing a positive side to the lockdown. Examples? For me, the biggest benefit has been the time and energy saved by not commuting. I also like being able to weave small personal chores in between office work. I can plan my hours better and get more done in a day. I’ve also been better able to manage my health. My weight resembles the growth chart of an inflation-protected Treasury bond fund. Occasional short-term fluctuations in either direction are common, but things creep slowly upward over time. Stuck at home, I figured I could devote extra time to better eating and fitness habits. Though I try to eat a balanced diet, with lots of vegetables, fruits and fish, I wasn’t consistent in my good eating habits. Now that there’s more time to prepare healthier and tastier meals, I have no excuses. I’ve been cooking every other day. Meanwhile, there’s no morning rush to get ready to leave for work. When the weather gods smile, I start my day with a walk. There’s an abundance of blooming trees and songbirds in our area. My cousin, who lives next door, joins me in the evening, when I take a second walk to help me unwind. The good eating and the exercise seem to be working. I feel healthier and more energetic. I’ll miss that sense of wellbeing when things…
Read more »
Investing Fundamentals: A Simple Guide for Beginners
William Housley | Apr 24, 2026
The great COLA debate-maybe not the expected solution.
R Quinn | Apr 26, 2026
How much to provide a college student monthly?
Chris | Apr 25, 2026
Happy 50th!
Rick Connor | Apr 27, 2026
Live a little
greg_j_tomamichel | Apr 25, 2026
Around the Obstacles
ArticleDan Smith | Apr 25, 2026
- My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
- I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
- I had acquired bookkeeping, payroll, and tax prep skills through my involvement with my local union, though I never pictured myself as the type to sit behind a desk, in a dimly lit office, crunching numbers beneath the glow of one of those green shade banker’s lamps.
- As a last resort, I could fall back on my truck driving skills, using my commercial drivers license to get a job hauling ‘no-touch’ freight of some sort.
- Last but not least, I needed a place to live. “Hello, mom and dad, I need my room back”. Sleeping on the twin mattress I gave up 25 years earlier, was not part of my plan.
- I was determined not to let my occupation as a beer truck driver dictate my future job prospects.
Where did I want to be?- Where to live? Living with the folks was never meant to be a long term thing. After three months of that, I signed my first ever apartment lease as a lessee, as opposed to a lessor. That lasted two years, until a very large increase in the rent caused me to buy a duplex, and become a lessor again.
- Where to work? I continued my work as a delivery driver for three more years. My position as the local union president, and my five paid weeks of vacation actually kept me off of the truck much of the time. That enabled me to tolerate the maladies that would eventually force me out of that job. Having absolutely no desire to spend the balance of my life languishing on SSDI and a minimal IRA balance, I set off on the path to becoming a financial services guy. That did not work out, and if you want more information on that, here’s a link.
- To make ends meet, I turned to my last resort; driving a truck. Piloting an 18-wheeler was not how I envisioned my remaining working days. And although the freight was ‘no touch’, driving 600 miles every day in a Kenworth tractor is still pretty hard on your vertebrae. But sometimes you have to do what you have to do to survive and to keep your eye on your finish line. My heart goes out to full time drivers, that job is no walk in the park.
- And what about love? My preference was to be in a relationship, but not any relationship. I wanted a good partner, I wanted to be a good partner as well. What qualities would I look for in a new partner? Independent, established, confident, and nice. Was I asking too much?
Making it All Work Finally, preparation collided with opportunity. In other words, I got lucky. Remember when I told you I didn’t picture myself as ever being a bean-counter? Two established financial services guys set me up with free office space and began funneling tax prep clients to me. What began with me preparing taxes for about three dozen of my union brothers, instantly turned into over 100 clients. There I was, a bean counter of sorts. I kept that truck driving job for several more years. And remember that duplex I bought after the rent spiked at my apartment? Well, there was this girl living next door. Enter Chrissy. We became best friends. She is no longer my neighbor. She is now my spouse. Of course, at the time we met, aside from being a nice guy, I wasn’t much of a catch. Man, she took a chance on me. As my client count went up, my days driving the big-rig went down. When the client count got to about 400, I retired forever from driving. No more trips to Chicago, Des Moines, Snow Shoe PA, or Jersey City. Chrissy and I began pounding 40% of our gross pay into savings. It would take until I was 70, but working together, we got to a place each of us only dreamed we would be. By living within our means, and keeping lifestyle creep to a minimum, we surpassed our goals. Chris retired at 64 and helped me during my final three years as a tax preparer. Lucky for me, Federal Wage and Hour never found out that I violated the minimum wage laws by never paying her in the first place. I sold the practice at age 70. I prepared 650 tax returns in my final year. It’s important to note that during our journey, we did not starve ourselves of food nor fun. We counted 27 trips during our first ten years together. Chris was great at finding great deals to various destinations in the Caribbean, and we turned several of her business trips into mini vacations as well. It’s important to prepare for the future, but have some fun along the way as well. I hope this piece inspires someone who is still on the road, dealing with similar obstacles, and wondering if there was a way around them.Hidden Surcharge
DAN SMITH | Apr 21, 2026
A Life You Build
Jeff Peck | Apr 19, 2026
Rethinking the “Right” Time for Social Security
Andrew Clements | Apr 23, 2026
Lonely Island (Correct Edit)
Mark Crothers | Apr 22, 2026
Why I use a Donor-Advised Fund
David S | Feb 21, 2026
Tax Free Income Trap, Dealing With MAGI
DAN SMITH | Apr 21, 2026
Driving Prices
ArticleAdam M. Grossman | Apr 25, 2026