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No matter how good the sale, you always walk out the store with less money.

Paradox of choice. What to do, what to do?

"I had similar experiences as a manager. Y employer also moved to 3 health identical plans with different premiums, deductible, and maximum out of pocket costs. I developed a technique to show minimum and maximum yearly costs based on the data for that year. One thing that was a notice able change was the outsourcing of benefits. Our HR te moved more towards workforce development and became less knowledgeable about benefits. This was especially true of retirement plans - the newer HR staff was not eligible for the pension and had no incentive to learn it. Employees turned toward management to fill in the knowledge gap. In 2014 they switched to a cash balance plan and added a lump sum option. This was never explained well, and I leaned on one my son’s college roommate who was an actuary and worked in the field. I was able to bring some clarity to the choices. I was glad I was able to help, and enjoyed the learning part."
- Rick Connor
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Home Maintenance Choices, Options, & Decisions

"Rick - sounds like we've had parallel experiences with gutters and steep roof slopes. I considered rigging a belay line and using my old climbing harness as a fall arrestor. After thinking about it I didn't bother proposing it to my wife - I knew she would nix it. And yes, conquering the legacy installation of items that predate our ownership of this house is always fun. I was happy that no trips to the hardware store were required, but as I mentioned, I made numerous trips to the garage to gather additional tools. :)"
- Jeff Bond
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Dealing With Tech Changes

"My 12-year-old grandson says we are not technologically up-to-date because we don't have all the gaming platforms he has at home, we have "old" smartphones, and our Smart TV is old. I reminded him that our generation is responsible for many of the technological advances that allow him to play games, watch streamed TV content, and keep up with a friend 6,000 miles away. I received an eye-roll in reply."
- Jeff Bond
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Dream Retirement – Is it fading away?

"American dream is defined in many ways. If defined as "if you work hard you'll get ahead," just 27% in a new ABC News/Ipsos poll say the American dream still holds, down sharply from 50% when the question first was asked in 2010. See link https://abcnews.go.com/Politics/american-dream-reality-people-poll/story?id=106339566"
- smr1082
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WSJ Article by Jonathan

"Rick, Thanks for sharing the article. I continue to be amazed at Jonathan’s strength to persue his life’s passion (that of sharing his financial wisdom with others). For that we are all grateful. Jonathan, may you be given strength to continue doing so!"
- Jeff
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Those Who Follow by Jonathan Clements

"A non-abusive single parent is not worse than an abusive parent, single or otherwise. However, children in single-parent families are more likely to experience poor outcomes. Yes, there are exceptions. The Annie E. Casey Foundation is a good source for relevant data. Brooks's piece is not without flaws. Two rebuttals: https://www.psychologytoday.com/us/blog/sliding-vs-deciding/202002/the-nuclear-family-was-no-mistake-a-response-to-david-brooks https://ifstudies.org/blog/number-2-in-2020-yes-david-brooks-the-nuclear-family-is-the-worst-family-form-except-for-all-others"
- Charlie Flagg
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New ArticlesAll Articles »

Special Care Needed

FATHERHOOD WASN’T one of my life goals. I didn’t feel like I had a wonderful childhood, so I didn’t think I had much to offer my offspring that would help them to lead a wonderful life. If children happened, okay, but it was never a goal.
My first marriage ended because I placed money over fatherhood. I thought not having kids would speed my path to wealth. My wife disagreed—and walked out.
When I met my current wife,

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Don’t Place That Call

AN ANCIENT FINANCIAL concept is gaining newfound popularity.
In his book Politics, Aristotle related a story about a fellow philosopher named Thales, who lived about 2,600 years ago. One winter, Thales made a prediction about the coming olive harvest. He felt that it was going to be a strong year. But because recent harvests had been weak, most people disagreed with him. To Thales, this meant opportunity. He approached the owners of olive presses in his town with a proposition.

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Second Guessing

I’VE BEEN HAVING DOUBTS about some of the financial decisions I’ve made. I don’t know if it has to do with age. They say you tend to lose confidence as you grow older. Life-altering events, such as the death of loved ones, health issues and retirement, can weigh heavily and sow doubt.
For instance, I’ve been thinking about whether I should have sold my condo in 2020, during the pandemic. If I’d kept it, it would be worth quite a bit today.

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Tracking My Progress

THOMAS JEFFERSON once said that eternal vigilance is the price of liberty, and the philosopher Socrates opined that the unexamined life isn’t worth living.
Although they were talking about political freedom and personal philosophy, respectively, Jefferson and Socrates could well have been discussing personal finance. One of the best ways to engage in financial vigilance and self-examination is to keep a daily financial journal.
I’ve kept a personal journal since I was 14 years old,

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That Final Payment

IT’S IMPORTANT TO BE familiar with what happens with Social Security benefits when someone dies. Otherwise, you may find yourself in a long, painstaking battle to get the payment to which your loved one was entitled. I found this out the hard way.
My father-in-law Bernard died in September 2015. My wife was his executor and the agent under his power of attorney (POA). But I’d earlier served as POA and executor for my mother,

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The Hard Way

I RECENTLY MENTIONED to my wife’s cousin that I’m taking required minimum distributions from my IRA. He won’t have to—because he doesn’t have an IRA. Instead, he keeps his car trunk full of cash.
He’s in the car business. He buys and fixes cars, all out of his mother’s two-car garage. He keeps cash to buy used cars at rock-bottom prices. People are willing to sell a car cheaper if they can get the cash immediately.

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Get Educated

think

LAND VS. DWELLING. As you ponder real-estate returns, it helps to distinguish the dwelling from the land underneath. You can be fairly confident the land will appreciate over time. By contrast, the dwelling will deteriorate, requiring maintenance and occasional upgrades. But the dwelling also provides shelter—the key reason to own a home.

act

CHECK YOUR LIFE insurance coverage. Do you need more because you recently got married, had children or took out a mortgage? Could you ditch coverage because the kids have left home, the mortgage is paid off or you now have substantial savings? Many folks need heaps of coverage in their 30s but none in their 60s—a reason to favor term insurance.

Truths

NO. 53: BIG LOSSES devastate investment compounding. To grow wealthy over time, we should diversify broadly, including owning uncorrelated assets, so we earn healthy gains most years—and avoid big losses. The math of investment losses is brutal: Lose 25% and we need a 33% rebound to get back to even. Lose 50%? Now, we need a 100% gain to recover.

Money Guide

Withdrawal Rate?

AS BOND YIELDS have fallen in recent decades and stock market valuations have climbed, some experts have suggested that the standard 4% portfolio withdrawal rate may be too high—and that retirees who spend that much risk running out of money.

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Manifesto

NO. 70: AS WE decide how much debt to take on and how much money to save, we should ask ourselves a key question: Will our future self be happy with the choices we make today?

Second LookAll Articles »

Retirement

Wedding Gift

ON THE SURFACE, Social Security seems straightforward: During our working years, we pay into the system. Then, when we’re older, the government sends a check every month for life.
But scratch the surface and you’ll find that Social Security offers a number of additional benefits. Among them: a benefit for spouses. This can be highly valuable, but the rules around it are complex and very specific. Consider, for example, the late talk show host Johnny Carson.

Read more »

Family Finance

Think of the Children

WE PUT OUR TWO KIDS through college using 529 plans—and I estimate the accounts easily added 10% to the value of our college savings, compared to what we would have accumulated if we’d invested through a regular taxable account. Yet only 37% of families use 529s to help pay for college, according to a 2021 survey by Sallie Mae.
Like an IRA, a 529 plan gives you a tax break for saving for a specific goal—but,

Read more »

Investing

Improving the Odds

WE HEAR ABOUT highflying stocks and hotshot money managers, and it’s easy to imagine the streets of lower Manhattan are paved with gold. But the truth is a tad more mundane.
Want some reasonable assurance of investment success? We should shun the excitement of trying to pick winners and instead focus on more prosaic portfolio tweaks. The overriding goal: ensure the compounding of our investment dollars encounters as little friction as possible.
Minimizing this friction will,

Read more »

Lists

Get Rich Slow

THE FINANCIAL WORLD generates a lot of noise. As a financial planner, I see that every day. Being in my 20s, it’s fun to learn about new alternative investments or imagine getting rich quick thanks to one stock or following the advice of one social media post.
But I know that’s all it is—fun. Instead of imagining my way to wealth, I take control of my finances by creating rules to live by. Rules are driven by values.

Read more »
How to think about money

Mindset

The S Word

SOCIALISM. IT’S A WORD that can make people on the far left swoon, as they imagine an egalitarian utopia, even while inciting those on the far right to mumble protective oaths like a medieval citizen seeing a sign of the devil. It’s also a word that Google Trends reports has had a surge in search-related interest since last December.
As competing visions of how to protect and enhance the American economic system vie for political popularity,

Read more »

Free Newsletter

Get Educated

Manifesto

NO. 70: AS WE decide how much debt to take on and how much money to save, we should ask ourselves a key question: Will our future self be happy with the choices we make today?

think

LAND VS. DWELLING. As you ponder real-estate returns, it helps to distinguish the dwelling from the land underneath. You can be fairly confident the land will appreciate over time. By contrast, the dwelling will deteriorate, requiring maintenance and occasional upgrades. But the dwelling also provides shelter—the key reason to own a home.

act

CHECK YOUR LIFE insurance coverage. Do you need more because you recently got married, had children or took out a mortgage? Could you ditch coverage because the kids have left home, the mortgage is paid off or you now have substantial savings? Many folks need heaps of coverage in their 30s but none in their 60s—a reason to favor term insurance.

Truths

NO. 53: BIG LOSSES devastate investment compounding. To grow wealthy over time, we should diversify broadly, including owning uncorrelated assets, so we earn healthy gains most years—and avoid big losses. The math of investment losses is brutal: Lose 25% and we need a 33% rebound to get back to even. Lose 50%? Now, we need a 100% gain to recover.

Money Guide

Start Here

Withdrawal Rate?

AS BOND YIELDS have fallen in recent decades and stock market valuations have climbed, some experts have suggested that the standard 4% portfolio withdrawal rate may be too high—and that retirees who spend that much risk running out of money.

Read more »
Second LookAll Articles »

Retirement

Wedding Gift

ON THE SURFACE, Social Security seems straightforward: During our working years, we pay into the system. Then, when we’re older, the government sends a check every month for life.
But scratch the surface and you’ll find that Social Security offers a number of additional benefits. Among them: a benefit for spouses. This can be highly valuable, but the rules around it are complex and very specific. Consider, for example, the late talk show host Johnny Carson.

Read more »

Family Finance

Think of the Children

WE PUT OUR TWO KIDS through college using 529 plans—and I estimate the accounts easily added 10% to the value of our college savings, compared to what we would have accumulated if we’d invested through a regular taxable account. Yet only 37% of families use 529s to help pay for college, according to a 2021 survey by Sallie Mae.
Like an IRA, a 529 plan gives you a tax break for saving for a specific goal—but,

Read more »

Investing

Improving the Odds

WE HEAR ABOUT highflying stocks and hotshot money managers, and it’s easy to imagine the streets of lower Manhattan are paved with gold. But the truth is a tad more mundane.
Want some reasonable assurance of investment success? We should shun the excitement of trying to pick winners and instead focus on more prosaic portfolio tweaks. The overriding goal: ensure the compounding of our investment dollars encounters as little friction as possible.
Minimizing this friction will,

Read more »
How to think about money

Lists

Get Rich Slow

THE FINANCIAL WORLD generates a lot of noise. As a financial planner, I see that every day. Being in my 20s, it’s fun to learn about new alternative investments or imagine getting rich quick thanks to one stock or following the advice of one social media post.
But I know that’s all it is—fun. Instead of imagining my way to wealth, I take control of my finances by creating rules to live by. Rules are driven by values.

Read more »

Mindset

The S Word

SOCIALISM. IT’S A WORD that can make people on the far left swoon, as they imagine an egalitarian utopia, even while inciting those on the far right to mumble protective oaths like a medieval citizen seeing a sign of the devil. It’s also a word that Google Trends reports has had a surge in search-related interest since last December.
As competing visions of how to protect and enhance the American economic system vie for political popularity,

Read more »