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New Face, old scam

Jim Wasserman  |  May 2, 2026

"Thanks Jim. This is an interesting angle for a scam. Who knows what the pitch would be, but you gave your wife some excellent advice."
- Jerry Pinkard
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How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

DrLefty  |  Apr 22, 2026

"Even with decades of consistent saving and careful planning, the transition from saver to spender is such a psychological challenge when we retire. 🤞🏻"
- Andy Morrison
Read more »

Ageing and the Open Road

ArticleMark Crothers  |  May 2, 2026

RECENTLY I TOOK a free ride on a driverless bus trialling its proposed route, part of my local administration's ten-year rollout plan for self-driving public transport and taxis. I see real potential in this technology, and I'm hoping the infrastructure and implementation stay on schedule. That hope is mostly selfish, I'll admit. In fifteen years I'll be in my mid-seventies, and I'd love to ditch my car and rely on cheap, dependable robo-taxis instead. It would give me freedom precisely in that decade of life when driving starts to become genuinely problematic. I'm planning to change my car in 2027 for a modern hybrid, but in the back of my mind is the thought that it could be my last. If the self-driving rollout hits its targets, I can see the case for never buying another. The advantages for someone in my demographic at that stage of life would be hard to argue with. Think about what car ownership actually costs. There's the purchase price, insurance, road tax, fuel, servicing, tyres, and the occasional bill that arrives like a punch to the stomach. For most people, a car is the second most expensive thing they own after their home. In retirement, when income typically drops and budgets tighten, that ongoing drain becomes harder to justify. This is especially true when the car spends the vast majority of its time sitting on a driveway looking pretty. A robo-taxi model, where you pay only for the journeys you actually take, could represent a dramatic shift in how much personal transport really costs. The numbers, I suspect, will be compelling — with current estimates from real world operations suggesting an 80% reduction in the cost of fares being achievable. Then there's the question of independence. This is the one that matters most to me personally, and I'd imagine it resonates with anyone approaching or already in their later years. Giving up your car keys is one of those milestones that nobody really talks about, but everyone in that demographic understands. It represents a loss of spontaneity and self-sufficiency that can genuinely affect quality of life. The difference with autonomous vehicles is that surrendering the wheel doesn't have to mean surrendering the freedom. A reliable, affordable self-driving taxi available on demand restores something that previous generations simply had to go without once driving became difficult. This could be a trip to the supermarket on a weekday morning or a late evening visit to family. The safety dimension is also worth considering. Reaction times slow as we age. Night vision deteriorates. Concentration over long distances becomes harder. Most older drivers are aware of this and manage it carefully, but there comes a point for everyone where the road becomes a source of anxiety rather than freedom. Autonomous vehicles remove that calculation entirely. You get in, state your destination, and arrive, without the cognitive load of navigating, anticipating other drivers, or worrying whether your responses are still sharp enough. That peace of mind shouldn't be underestimated. There are wider social benefits too. Older people who can no longer drive are disproportionately affected by isolation. Poor rural transport links, infrequent bus services, and the general assumption that everyone has access to a car all contribute to a situation where many retired people find their world gradually shrinking. Autonomous vehicles, particularly if integrated intelligently with existing public transport, have the potential to reverse that. A robo-taxi that can be summoned by a smartphone, or even a simple voice command, could keep people connected to their communities, their families, and their routines far longer than is currently possible. There are, of course, reasons to be cautious. Technology rollouts rarely go entirely to plan. The ten-year schedule my local administration is working to is ambitious, and a lot can change in funding priorities, in public appetite, and in the regulatory environment. The early trials are promising, but promising trials and full-scale dependable infrastructure are very different things. It's worth keeping in mind, with a groan inducing pun: your mileage will vary — literally. Dense urban and suburban areas will almost certainly see reliable services first, and I'm fortunate that describes my situation. For those in more rural communities, the very people for whom isolation is already the sharpest problem, the wait could be considerably longer. I'm hopeful, but I'm not banking on it entirely. Which is why the 2027 hybrid still makes sense. It's a practical hedge, a good, modern, efficient car that will serve me well through the transition years, whatever pace that transition takes. But the fact that I'm already thinking of it as potentially my last car feels significant. A decade ago that thought wouldn't have crossed my mind. The technology has moved from science fiction to credible near-future fast enough to genuinely reshape how I'm thinking about retirement planning. If it delivers, the generation hitting their seventies in the late 2030s could be the first in history for whom ageing and mobility don't have to be in conflict. That's not a small thing. That might turn out to be one of the most personally transformative shifts of the entire autonomous vehicle revolution. It is not about the flashy early adopters or the logistics industry efficiencies. Instead, it is the simple dignity of an older person getting where they need to go, independently, on their own terms. I'm hopeful I'll be taking that ride and certain my children and grandchildren definitely will.
Mark Crothers is a retired small business owner from the UK with a keen interest in personal finance and simple living. Married to his high school sweetheart, with daughters and grandchildren, he knows the importance of building a secure financial future. With an aversion to social media, he prefers to spend his time on his main passions: reading, scratch cooking, racket sports, and hiking.
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Saving for Grandchildren

ArticleJohn Yeigh  |  May 2, 2026

OUR FIRST GRANDCHILD recently arrived, which naturally has us thinking about the smartest ways to build a strong financial foundation for her future. In 2019, I wrote Take a Break, which outlined saving strategies on behalf of children. Since then, the landscape has changed with the introduction of Trump accounts and Roth-conversion pathways for 529 accounts.  Families have four tax-advantaged savings approaches on behalf of young children plus the Roth IRA option once the child has earned income – 529 education savings account, a Uniform Gift to Minor (UGM) custodial account, a Coverdell account, and the new Trump account. Each option offers a different mix of tax benefits, contribution requirements and withdrawal rules. 529 Accounts Pros
  • Tax-free growth when used for qualified education expenses
  • High gift-tax contribution limits: $19K per contributor per year (indexed)
  • New ability to convert up to $35K into a Roth IRA for the beneficiary
Cons
  • Relatively complex with penalties and taxes on non-qualified withdrawals
  • Limited, state-approved investment options
  • Risk of underutilization if the child does not pursue qualifying education
Caveats
  • Technology and AI could significantly reduce education’s cost structure in the future
  • Roth conversions are capped at $35K lifetime
  • The 529 must be open 15 years, and contributions must age 5 years before conversion
  • Conversions require the beneficiary to have earned income (i.e. they could Roth anyway)
  • Annual Roth contribution limits still apply (e.g., $7.5K in 2026), so completing the full $35K conversion would take five years
UGM Custodial Accounts Pros
  • Brokerage account where up to $2.7K of unearned income can be tax-free each year
  • High gift-tax contribution limits: $19K per contributor per year (indexed)
  • Broad investment flexibility — stocks, bonds, funds, etc.
  • Few restrictions on how funds may be used for the child’s benefit
  • Potential for low taxes on capital gains, but subject to marginal “kiddie tax” at parent’s rates until tax-independency or age 24 
Cons
  • Higher income or capital gains could trigger the kiddie tax at the parents’ marginal rate
  • Assets count as the child’s for financial-aid purposes
Caveats
  • Custodians have some ability to spend down the account for legitimate child expenses if the child is a wild-child in the later teen years
Coverdell Accounts Pros
  • Tax-free growth for qualified education expenses
  • More flexible investment choices than most 529 plans
Cons
  • Low contribution limit: $2K per year plus income limits restrict who can contribute
  • Essentially irrelevant today given the expanded options within 529 plans
Trump Accounts Pros
  • $1K government seed deposit for children born 2025–2028
  • Contribution limit of $5K per year in 2026, indexed to inflation
  • Parent employers may contribute up to $2.5K per year (also indexed)
  • Tax-deferred growth with Roth-conversion opportunities beginning at age 18
  • No earned-income requirement for Roth conversions 
  • Roth conversions are ideal in low-income years starting after age 18 once the child has transitioned to tax-independency of parents or at age 24 when “kiddie taxation” ends. Early tax independence could even be a combined Roth plus student financial-aid strategy
  • Potential to convert large account values over several years at relatively low tax rates (potentially marginal 10-12% tax-rates, but averaging less due to the standard deduction).
Cons
  • Investment options limited to low-cost indexed stock funds (not necessarily a drawback)
  • Penalty-free withdrawals must wait until age 59½, but the accounts could be advantageous even including penalties
  • Limited custodian control and intervention possibilities if the teen is a wild-child
Caveats
  • If Roth conversions are not undertaken during the child’s low-income years, a UGMA invested to capture long-term capital gains tax-rates may outperform a Trump Account taxed at ordinary income tax-rates
  • Watch this space as future adjustments or eligibility changes are possible
  In effect, the 529 is a two-decade college savings program having some complexity and withdrawal limitations; the UGM is a reasonably flexible, 18-30-year college or house downpayment savings program; and the Trump account is a somewhat inflexible, sixty-year retirement accelerator.    Resulting Playbook Here is our family’s intended playbook for tax-advantaged accounts in the grandchild's name:
  • Parents’ retirement account fundings remain their top priority - 401K’s at a minimum up to the match, HSAs with their triple tax advantages, and Roths as long as eligible within income limits.
  • A Trump account has already been initiated to secure the free $1K government seed contribution – grows to potentially $2.6K at age 18 after penalties and taxes.
  • Limited 529 funding has also been initiated to start the 15-year clock for potential later Roth conversions. 
  • The family’s next priority is to fund the Trump account which starts at $5K later this year. Maximizing the Roth conversion opportunity will require ~$116K of contributions (at 3% inflation) over 18 years which we grandparents intend to help fund. I estimate the Roth converted Trump account could grow to ~$2 million of tax-free money at age 60 (6% growth) assuming early-age Roth conversions, and the Wall Street Journal projects as much as $3 million (link likely paywalled).
  • The subsequent priorities are to start UGM taxable account and 529 account contributions in parallel to perhaps initial levels of about $35K each. This may take our family some years depending upon available resources for contributions.
For the UGM account, a balance of $35K should capture a sizeable chunk of the annual $2.7K tax-free income limit by investing in high-yield income alternatives. For the 529 account, $35K aligns with the Roth conversion limit. On a personal note, we had extremely positive UGM outcomes with our children. We saved taxes for two decades, and each child used the ~$60K balance as down payments on their first house shortly after college. Due to the 529’s withdrawal rigidities and potential technology impacts, we are unlikely to fund the 529 to the max. 
  • We will skip Coverdells as the alternatives offer ample savings opportunity in the child’s name ($200K+). 
  • Depending upon spare resources available for gifting, we can always reassess future contributions. 
That’s our plan, and we’re sticking to it…. until something changes.    John Yeigh is an author, coach and youth sports advocate. His book “Win the Youth Sports Game” was published in 2021. John retired in 2017 from the oil industry, where he negotiated financial details for multi-billion-dollar international projects. Check out his earlier articles.  
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Shopping around – you versus the grocery store

R Quinn  |  Apr 30, 2026

"Yes, I have certainly seen such gentlemen, sometimes the same ones from previous visits to the store. 😊"
- Linda Grady
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How much to provide a college student monthly?

Chris  |  Apr 25, 2026

"I've financed 4 children at college (my 3 and a niece). My first advice is tell the child to develop a budget what they need each month. Itemize line by line: gas, clothes, books, socializing,... and then discuss it together. I found my kids to be realistic and reasonable. Then a couple of months into the semester I asked them to reassess their numbers after living in the environment. We upwardly adjusted as needed. And sometimes they requested additional funds for a special need like an expensive book or a new dress for a club social. College is also a financial education and your child learning to manage life away from home. They will make mistakes and that's expected and a learning opportunity. Recommend a monthly allowance rather than weekly. Weekly micromanages the 18 year-21 year old too much. Show trust and have high expectations for mature behavior. You want your child to have a fun college experience as well as get a wonderful education."
- moonwalkerdaughter
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California, Here They Came

D.J.  |  Apr 29, 2026

"Thanks, Jeff. Interesting coincidence that your grandmother and her six sisters all came to California as six of my grandma’s sisters came as well. Big families back in the day!"
- D.J.
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Investing Fundamentals: A Simple Guide for Beginners

W.D. Housley  |  Apr 24, 2026

"WDH, one of the best summaries of Investing discussions where, time, diversifying and compounding are on your side. Stick with the best brokerage houses like Vanguard & Fidelity & Schwab, and pick indices that are low in cost. Spread the wealth, one of the best is the S&P 500 index, these include the biggest and most successful industrial stocks in the market. Save regularly, try to get all matching of money you can from your employer for your 401k, because you will need it in retirement. Good investing to all."
- William Dorner
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One World, One Kind of Work

Andrew Clements  |  Apr 30, 2026

"Thank you Mike, I know I'm straying from the normal HD articles but I am not a financial writer."
- Andrew Clements
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Wall Street Trap

ArticleAdam M. Grossman  |  May 2, 2026

IN THE INVESTMENT world, May 1st is a notable day. It was on May 1, 1975 that the Securities and Exchange Commission deregulated the brokerage industry. For the 183 years prior to that, trading commissions on the New York Stock Exchange had been fixed at uniformly high rates. But when deregulation arrived, competition got going. That’s when discount brokers like Charles Schwab got rolling, and over time, May Day, as it’s now referred to, has delivered enormous savings to consumers. More than 50 years later, though, Wall Street still operates in ways that are often at odds with consumer interests. As an individual investor, what are the obstacles to be aware of? At the top of the list is Wall Street’s fixation with individual stocks. For almost 100 years, the data has been clear that stock-picking is counterproductive. Probably the first to uncover this was a fellow named Alfred Cowles. Cowles came from a wealthy family and wondered whether the investment advice his family had been receiving was worthwhile. He set about answering that question and in 1933, published a paper titled “Can Stock Market Forecasters Forecast?” Cowles’s conclusion: They can’t. More recently, research by finance professors Brad Barber and Terrance Odean came to a similar conclusion. The title of their most well known paper is self-explanatory: “Trading Is Hazardous to Your Wealth.”  Along the same lines, Standard & Poor’s regularly examines actively-managed mutual funds to see how many are able to outperform the overall market. The most recent finding: Over the past 10 years, fewer than 15% of funds benchmarked to the S&P 500 managed to beat the index. Research by Jeff Ptak at Morningstar has found that the more active a fund is, the worse it performs. So-called tactical funds, which shift among different asset classes in response to economic forecasts have, in Ptak’s words, “incinerated” shareholder dollars. This data is fairly well known. The problem, though, is that trading activity generates revenue for the brokerage industry, so it has an interest in keeping investors engaged with the market. That’s why brokerage analysts are on TV every day, offering their forecasts for individual stocks, for the overall market and for the broader economy. To be sure, this makes for interesting television. The problem, though, is that it’s been shown to carry almost no value. According to research by Joachim Klement, the accuracy of Wall Street prognosticators is approximately zero. Why are they so poor at forecasting? For starters, there’s the simple fact that no one has a crystal ball. No one can know what a company—or its competitors—will do a month or a year from now, and how that will translate into stock price gains or losses. Sociologist Ezra Zuckerman Sivan uncovered a more subtle explanation. In research published after the technology selloff in 2000, Sivan found that Wall Street analysts are constrained by two obstacles. The first is that they’re dependent on access to companies’ management teams to help in their research. For that reason, it’s in their interest to maintain positive relationships with the companies that they follow. Investment banks that take a positive view on a company may also be rewarded with profitable mergers or acquisitions work when the need arises. Those factors bias stock recommendations overwhelmingly in the direction of “buy” ratings. Another reason analysts tend to avoid negative comments about the companies they cover: Sivan found that there is a community effect that tends to form among the analysts assigned to a given company, and thus an incentive develops to not “rock the boat” in saying anything too critical. People generally want to get along, and that results in a sort of self-censorship. This research is well understood, and yet Wall Street continues to generate forecasts day after day, year after year. Why? There are two explanations, I believe. The first is that it’s entertaining. I’ll be the first to acknowledge that index funds aren’t terribly interesting to talk about. It’s far more interesting to talk about smartphones or AI and the companies behind them. That makes Wall Street analysts invaluable to the media, who need to fill airtime.  And as long as they’re granted that airtime, forecasters are of great value to the brokerage industry. Since trading activity is profitable for Wall Street, it’s in brokers’ interest to generate continued interest in stocks. That brings in commission dollars for brokers. And even though commissions have shrunk in recent years, brokers benefit in other ways from active trading, including the “bid-ask spread” on each trade. That’s the difference between what buyers pay and what sellers receive, and though these spreads are tiny, they add up for the brokers who collect them. For good reason, then, Wall Street continues to promote stock-picking. At the same time, the investment industry is always busy developing new funds. In the first half of last year, for example, fund companies rolled out more than 640 new funds. Among them: funds that hold single stocks with varying degrees of leverage and other seemingly unnecessary new formulations. The result: There are now many more funds than there are stocks trading on U.S. exchanges.  Many of these new funds follow ever more esoteric strategies. They’re often opaque. And almost invariably, they carry higher fees. In a 2011 study titled “The Dark Side of Financial Innovation,” finance professor Brian Henderson and a colleague looked at one popular category of fund known as a structured product. Their conclusion: These funds were overpriced to the point that their expected return was actually a bit below zero. How were they able to market such an inferior product? Henderson’s hypothesis was that the fund companies designed them to be intentionally as complex as possible in order to exploit individual investors. The bottom line: To a great degree, Wall Street is upside down. But as an individual investor, you don’t have to be. My rule of thumb: In building a portfolio, investors should do more or less the opposite of what Wall Street recommends. That, I believe, is a reliable formula for success.   Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
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Is saving really that hard? Nope, not for the great majority of Americans. 

R Quinn  |  Apr 28, 2026

"Great article R Quinn. You can spreadsheet, or AI it any way you like. The POINT is compounding is your friend. Being an Engineer and taking Engineering Economics allowed me in 1968 to understand I had to save something, so one day we could look to a comfortable retirement. Inflation of course is your enemy, and you must be balanced and reasonable in your estimates. Because of our discipline along with 3 children, we still found a way to save. When IRA's came, we somehow managed to always save so we could maximize our FREE money put in by the company. Yes, if you relied only on Social Security then, you will have to skimp in your retirement. It turns out our saving discipline has paid off handsomely, and at 76 we changed from saving and earning to spending, and if you are like us living in a CCRC, you will spend more than when you owned a home. At 80, we are fortunate to having a smooth road ahead. You need balance, saving, discipline and some good fortune to make it all work. If you spend, spend and pay 25% on your credit card balance, you will not be able to retire and enjoy it."
- William Dorner
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First Place

Jonathan Clements  |  Sep 6, 2024

"I was just speaking with good friends who are leaving soon for a tour of Devon and Cornwall. Talking about their trip made me think of this article Jonathan wrote almost 2 years ago. It was a pleasant memory. I hope I get to Hope Cove someday."
- Rick Connor
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New Face, old scam

Jim Wasserman  |  May 2, 2026

"Thanks Jim. This is an interesting angle for a scam. Who knows what the pitch would be, but you gave your wife some excellent advice."
- Jerry Pinkard
Read more »

How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

DrLefty  |  Apr 22, 2026

"Even with decades of consistent saving and careful planning, the transition from saver to spender is such a psychological challenge when we retire. 🤞🏻"
- Andy Morrison
Read more »

Ageing and the Open Road

ArticleMark Crothers  |  May 2, 2026

RECENTLY I TOOK a free ride on a driverless bus trialling its proposed route, part of my local administration's ten-year rollout plan for self-driving public transport and taxis. I see real potential in this technology, and I'm hoping the infrastructure and implementation stay on schedule. That hope is mostly selfish, I'll admit. In fifteen years I'll be in my mid-seventies, and I'd love to ditch my car and rely on cheap, dependable robo-taxis instead. It would give me freedom precisely in that decade of life when driving starts to become genuinely problematic. I'm planning to change my car in 2027 for a modern hybrid, but in the back of my mind is the thought that it could be my last. If the self-driving rollout hits its targets, I can see the case for never buying another. The advantages for someone in my demographic at that stage of life would be hard to argue with. Think about what car ownership actually costs. There's the purchase price, insurance, road tax, fuel, servicing, tyres, and the occasional bill that arrives like a punch to the stomach. For most people, a car is the second most expensive thing they own after their home. In retirement, when income typically drops and budgets tighten, that ongoing drain becomes harder to justify. This is especially true when the car spends the vast majority of its time sitting on a driveway looking pretty. A robo-taxi model, where you pay only for the journeys you actually take, could represent a dramatic shift in how much personal transport really costs. The numbers, I suspect, will be compelling — with current estimates from real world operations suggesting an 80% reduction in the cost of fares being achievable. Then there's the question of independence. This is the one that matters most to me personally, and I'd imagine it resonates with anyone approaching or already in their later years. Giving up your car keys is one of those milestones that nobody really talks about, but everyone in that demographic understands. It represents a loss of spontaneity and self-sufficiency that can genuinely affect quality of life. The difference with autonomous vehicles is that surrendering the wheel doesn't have to mean surrendering the freedom. A reliable, affordable self-driving taxi available on demand restores something that previous generations simply had to go without once driving became difficult. This could be a trip to the supermarket on a weekday morning or a late evening visit to family. The safety dimension is also worth considering. Reaction times slow as we age. Night vision deteriorates. Concentration over long distances becomes harder. Most older drivers are aware of this and manage it carefully, but there comes a point for everyone where the road becomes a source of anxiety rather than freedom. Autonomous vehicles remove that calculation entirely. You get in, state your destination, and arrive, without the cognitive load of navigating, anticipating other drivers, or worrying whether your responses are still sharp enough. That peace of mind shouldn't be underestimated. There are wider social benefits too. Older people who can no longer drive are disproportionately affected by isolation. Poor rural transport links, infrequent bus services, and the general assumption that everyone has access to a car all contribute to a situation where many retired people find their world gradually shrinking. Autonomous vehicles, particularly if integrated intelligently with existing public transport, have the potential to reverse that. A robo-taxi that can be summoned by a smartphone, or even a simple voice command, could keep people connected to their communities, their families, and their routines far longer than is currently possible. There are, of course, reasons to be cautious. Technology rollouts rarely go entirely to plan. The ten-year schedule my local administration is working to is ambitious, and a lot can change in funding priorities, in public appetite, and in the regulatory environment. The early trials are promising, but promising trials and full-scale dependable infrastructure are very different things. It's worth keeping in mind, with a groan inducing pun: your mileage will vary — literally. Dense urban and suburban areas will almost certainly see reliable services first, and I'm fortunate that describes my situation. For those in more rural communities, the very people for whom isolation is already the sharpest problem, the wait could be considerably longer. I'm hopeful, but I'm not banking on it entirely. Which is why the 2027 hybrid still makes sense. It's a practical hedge, a good, modern, efficient car that will serve me well through the transition years, whatever pace that transition takes. But the fact that I'm already thinking of it as potentially my last car feels significant. A decade ago that thought wouldn't have crossed my mind. The technology has moved from science fiction to credible near-future fast enough to genuinely reshape how I'm thinking about retirement planning. If it delivers, the generation hitting their seventies in the late 2030s could be the first in history for whom ageing and mobility don't have to be in conflict. That's not a small thing. That might turn out to be one of the most personally transformative shifts of the entire autonomous vehicle revolution. It is not about the flashy early adopters or the logistics industry efficiencies. Instead, it is the simple dignity of an older person getting where they need to go, independently, on their own terms. I'm hopeful I'll be taking that ride and certain my children and grandchildren definitely will.
Mark Crothers is a retired small business owner from the UK with a keen interest in personal finance and simple living. Married to his high school sweetheart, with daughters and grandchildren, he knows the importance of building a secure financial future. With an aversion to social media, he prefers to spend his time on his main passions: reading, scratch cooking, racket sports, and hiking.
Read more »

Saving for Grandchildren

ArticleJohn Yeigh  |  May 2, 2026

OUR FIRST GRANDCHILD recently arrived, which naturally has us thinking about the smartest ways to build a strong financial foundation for her future. In 2019, I wrote Take a Break, which outlined saving strategies on behalf of children. Since then, the landscape has changed with the introduction of Trump accounts and Roth-conversion pathways for 529 accounts.  Families have four tax-advantaged savings approaches on behalf of young children plus the Roth IRA option once the child has earned income – 529 education savings account, a Uniform Gift to Minor (UGM) custodial account, a Coverdell account, and the new Trump account. Each option offers a different mix of tax benefits, contribution requirements and withdrawal rules. 529 Accounts Pros
  • Tax-free growth when used for qualified education expenses
  • High gift-tax contribution limits: $19K per contributor per year (indexed)
  • New ability to convert up to $35K into a Roth IRA for the beneficiary
Cons
  • Relatively complex with penalties and taxes on non-qualified withdrawals
  • Limited, state-approved investment options
  • Risk of underutilization if the child does not pursue qualifying education
Caveats
  • Technology and AI could significantly reduce education’s cost structure in the future
  • Roth conversions are capped at $35K lifetime
  • The 529 must be open 15 years, and contributions must age 5 years before conversion
  • Conversions require the beneficiary to have earned income (i.e. they could Roth anyway)
  • Annual Roth contribution limits still apply (e.g., $7.5K in 2026), so completing the full $35K conversion would take five years
UGM Custodial Accounts Pros
  • Brokerage account where up to $2.7K of unearned income can be tax-free each year
  • High gift-tax contribution limits: $19K per contributor per year (indexed)
  • Broad investment flexibility — stocks, bonds, funds, etc.
  • Few restrictions on how funds may be used for the child’s benefit
  • Potential for low taxes on capital gains, but subject to marginal “kiddie tax” at parent’s rates until tax-independency or age 24 
Cons
  • Higher income or capital gains could trigger the kiddie tax at the parents’ marginal rate
  • Assets count as the child’s for financial-aid purposes
Caveats
  • Custodians have some ability to spend down the account for legitimate child expenses if the child is a wild-child in the later teen years
Coverdell Accounts Pros
  • Tax-free growth for qualified education expenses
  • More flexible investment choices than most 529 plans
Cons
  • Low contribution limit: $2K per year plus income limits restrict who can contribute
  • Essentially irrelevant today given the expanded options within 529 plans
Trump Accounts Pros
  • $1K government seed deposit for children born 2025–2028
  • Contribution limit of $5K per year in 2026, indexed to inflation
  • Parent employers may contribute up to $2.5K per year (also indexed)
  • Tax-deferred growth with Roth-conversion opportunities beginning at age 18
  • No earned-income requirement for Roth conversions 
  • Roth conversions are ideal in low-income years starting after age 18 once the child has transitioned to tax-independency of parents or at age 24 when “kiddie taxation” ends. Early tax independence could even be a combined Roth plus student financial-aid strategy
  • Potential to convert large account values over several years at relatively low tax rates (potentially marginal 10-12% tax-rates, but averaging less due to the standard deduction).
Cons
  • Investment options limited to low-cost indexed stock funds (not necessarily a drawback)
  • Penalty-free withdrawals must wait until age 59½, but the accounts could be advantageous even including penalties
  • Limited custodian control and intervention possibilities if the teen is a wild-child
Caveats
  • If Roth conversions are not undertaken during the child’s low-income years, a UGMA invested to capture long-term capital gains tax-rates may outperform a Trump Account taxed at ordinary income tax-rates
  • Watch this space as future adjustments or eligibility changes are possible
  In effect, the 529 is a two-decade college savings program having some complexity and withdrawal limitations; the UGM is a reasonably flexible, 18-30-year college or house downpayment savings program; and the Trump account is a somewhat inflexible, sixty-year retirement accelerator.    Resulting Playbook Here is our family’s intended playbook for tax-advantaged accounts in the grandchild's name:
  • Parents’ retirement account fundings remain their top priority - 401K’s at a minimum up to the match, HSAs with their triple tax advantages, and Roths as long as eligible within income limits.
  • A Trump account has already been initiated to secure the free $1K government seed contribution – grows to potentially $2.6K at age 18 after penalties and taxes.
  • Limited 529 funding has also been initiated to start the 15-year clock for potential later Roth conversions. 
  • The family’s next priority is to fund the Trump account which starts at $5K later this year. Maximizing the Roth conversion opportunity will require ~$116K of contributions (at 3% inflation) over 18 years which we grandparents intend to help fund. I estimate the Roth converted Trump account could grow to ~$2 million of tax-free money at age 60 (6% growth) assuming early-age Roth conversions, and the Wall Street Journal projects as much as $3 million (link likely paywalled).
  • The subsequent priorities are to start UGM taxable account and 529 account contributions in parallel to perhaps initial levels of about $35K each. This may take our family some years depending upon available resources for contributions.
For the UGM account, a balance of $35K should capture a sizeable chunk of the annual $2.7K tax-free income limit by investing in high-yield income alternatives. For the 529 account, $35K aligns with the Roth conversion limit. On a personal note, we had extremely positive UGM outcomes with our children. We saved taxes for two decades, and each child used the ~$60K balance as down payments on their first house shortly after college. Due to the 529’s withdrawal rigidities and potential technology impacts, we are unlikely to fund the 529 to the max. 
  • We will skip Coverdells as the alternatives offer ample savings opportunity in the child’s name ($200K+). 
  • Depending upon spare resources available for gifting, we can always reassess future contributions. 
That’s our plan, and we’re sticking to it…. until something changes.    John Yeigh is an author, coach and youth sports advocate. His book “Win the Youth Sports Game” was published in 2021. John retired in 2017 from the oil industry, where he negotiated financial details for multi-billion-dollar international projects. Check out his earlier articles.  
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Shopping around – you versus the grocery store

R Quinn  |  Apr 30, 2026

"Yes, I have certainly seen such gentlemen, sometimes the same ones from previous visits to the store. 😊"
- Linda Grady
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How much to provide a college student monthly?

Chris  |  Apr 25, 2026

"I've financed 4 children at college (my 3 and a niece). My first advice is tell the child to develop a budget what they need each month. Itemize line by line: gas, clothes, books, socializing,... and then discuss it together. I found my kids to be realistic and reasonable. Then a couple of months into the semester I asked them to reassess their numbers after living in the environment. We upwardly adjusted as needed. And sometimes they requested additional funds for a special need like an expensive book or a new dress for a club social. College is also a financial education and your child learning to manage life away from home. They will make mistakes and that's expected and a learning opportunity. Recommend a monthly allowance rather than weekly. Weekly micromanages the 18 year-21 year old too much. Show trust and have high expectations for mature behavior. You want your child to have a fun college experience as well as get a wonderful education."
- moonwalkerdaughter
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California, Here They Came

D.J.  |  Apr 29, 2026

"Thanks, Jeff. Interesting coincidence that your grandmother and her six sisters all came to California as six of my grandma’s sisters came as well. Big families back in the day!"
- D.J.
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Investing Fundamentals: A Simple Guide for Beginners

W.D. Housley  |  Apr 24, 2026

"WDH, one of the best summaries of Investing discussions where, time, diversifying and compounding are on your side. Stick with the best brokerage houses like Vanguard & Fidelity & Schwab, and pick indices that are low in cost. Spread the wealth, one of the best is the S&P 500 index, these include the biggest and most successful industrial stocks in the market. Save regularly, try to get all matching of money you can from your employer for your 401k, because you will need it in retirement. Good investing to all."
- William Dorner
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One World, One Kind of Work

Andrew Clements  |  Apr 30, 2026

"Thank you Mike, I know I'm straying from the normal HD articles but I am not a financial writer."
- Andrew Clements
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Wall Street Trap

ArticleAdam M. Grossman  |  May 2, 2026

IN THE INVESTMENT world, May 1st is a notable day. It was on May 1, 1975 that the Securities and Exchange Commission deregulated the brokerage industry. For the 183 years prior to that, trading commissions on the New York Stock Exchange had been fixed at uniformly high rates. But when deregulation arrived, competition got going. That’s when discount brokers like Charles Schwab got rolling, and over time, May Day, as it’s now referred to, has delivered enormous savings to consumers. More than 50 years later, though, Wall Street still operates in ways that are often at odds with consumer interests. As an individual investor, what are the obstacles to be aware of? At the top of the list is Wall Street’s fixation with individual stocks. For almost 100 years, the data has been clear that stock-picking is counterproductive. Probably the first to uncover this was a fellow named Alfred Cowles. Cowles came from a wealthy family and wondered whether the investment advice his family had been receiving was worthwhile. He set about answering that question and in 1933, published a paper titled “Can Stock Market Forecasters Forecast?” Cowles’s conclusion: They can’t. More recently, research by finance professors Brad Barber and Terrance Odean came to a similar conclusion. The title of their most well known paper is self-explanatory: “Trading Is Hazardous to Your Wealth.”  Along the same lines, Standard & Poor’s regularly examines actively-managed mutual funds to see how many are able to outperform the overall market. The most recent finding: Over the past 10 years, fewer than 15% of funds benchmarked to the S&P 500 managed to beat the index. Research by Jeff Ptak at Morningstar has found that the more active a fund is, the worse it performs. So-called tactical funds, which shift among different asset classes in response to economic forecasts have, in Ptak’s words, “incinerated” shareholder dollars. This data is fairly well known. The problem, though, is that trading activity generates revenue for the brokerage industry, so it has an interest in keeping investors engaged with the market. That’s why brokerage analysts are on TV every day, offering their forecasts for individual stocks, for the overall market and for the broader economy. To be sure, this makes for interesting television. The problem, though, is that it’s been shown to carry almost no value. According to research by Joachim Klement, the accuracy of Wall Street prognosticators is approximately zero. Why are they so poor at forecasting? For starters, there’s the simple fact that no one has a crystal ball. No one can know what a company—or its competitors—will do a month or a year from now, and how that will translate into stock price gains or losses. Sociologist Ezra Zuckerman Sivan uncovered a more subtle explanation. In research published after the technology selloff in 2000, Sivan found that Wall Street analysts are constrained by two obstacles. The first is that they’re dependent on access to companies’ management teams to help in their research. For that reason, it’s in their interest to maintain positive relationships with the companies that they follow. Investment banks that take a positive view on a company may also be rewarded with profitable mergers or acquisitions work when the need arises. Those factors bias stock recommendations overwhelmingly in the direction of “buy” ratings. Another reason analysts tend to avoid negative comments about the companies they cover: Sivan found that there is a community effect that tends to form among the analysts assigned to a given company, and thus an incentive develops to not “rock the boat” in saying anything too critical. People generally want to get along, and that results in a sort of self-censorship. This research is well understood, and yet Wall Street continues to generate forecasts day after day, year after year. Why? There are two explanations, I believe. The first is that it’s entertaining. I’ll be the first to acknowledge that index funds aren’t terribly interesting to talk about. It’s far more interesting to talk about smartphones or AI and the companies behind them. That makes Wall Street analysts invaluable to the media, who need to fill airtime.  And as long as they’re granted that airtime, forecasters are of great value to the brokerage industry. Since trading activity is profitable for Wall Street, it’s in brokers’ interest to generate continued interest in stocks. That brings in commission dollars for brokers. And even though commissions have shrunk in recent years, brokers benefit in other ways from active trading, including the “bid-ask spread” on each trade. That’s the difference between what buyers pay and what sellers receive, and though these spreads are tiny, they add up for the brokers who collect them. For good reason, then, Wall Street continues to promote stock-picking. At the same time, the investment industry is always busy developing new funds. In the first half of last year, for example, fund companies rolled out more than 640 new funds. Among them: funds that hold single stocks with varying degrees of leverage and other seemingly unnecessary new formulations. The result: There are now many more funds than there are stocks trading on U.S. exchanges.  Many of these new funds follow ever more esoteric strategies. They’re often opaque. And almost invariably, they carry higher fees. In a 2011 study titled “The Dark Side of Financial Innovation,” finance professor Brian Henderson and a colleague looked at one popular category of fund known as a structured product. Their conclusion: These funds were overpriced to the point that their expected return was actually a bit below zero. How were they able to market such an inferior product? Henderson’s hypothesis was that the fund companies designed them to be intentionally as complex as possible in order to exploit individual investors. The bottom line: To a great degree, Wall Street is upside down. But as an individual investor, you don’t have to be. My rule of thumb: In building a portfolio, investors should do more or less the opposite of what Wall Street recommends. That, I believe, is a reliable formula for success.   Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
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Manifesto

May 3, 2026

NO. 52: WE SHOULD aim to become homeowners—not because homes deliver handsome capital gains, but because owning locks in our housing costs and, with every mortgage payment, forces us to save.

humans

May 3, 2026

NO. 29: WE SUFFER from recency bias, meaning we’re overly influenced by current events. Today’s investment dramas loom large, triggering fear or greed and prompting foolish portfolio changes. Meanwhile, we lose sight of market history—the crises that were overcome, the hot stocks that turned cold, and the broad market’s impressive march higher.

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May 2, 2026

SEE IF ESTATE taxes are an issue.  Very few Americans need worry about federal estate taxes, given today's high federal exemption. State estate taxes are an issue in just a third of states, and exemptions are typically far below the federal level. But for most Americans, the biggest “death tax” will be the income taxes owed on inherited retirement accounts.

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May 1, 2026

NO. 67: MOST MUTUAL funds are sector bets. Funds often aim for style purity, sticking with just one stock or bond market niche. To gauge whether a fund is any good, compare it to others in the same category. But to build a diversified portfolio, buy just one or two funds from any given category—and diversify with funds from other categories.

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Manifesto

May 3, 2026

NO. 52: WE SHOULD aim to become homeowners—not because homes deliver handsome capital gains, but because owning locks in our housing costs and, with every mortgage payment, forces us to save.

Spotlight: Cars

Driving Me Happy

Howard Rohleder   |  Dec 6, 2021

MY CAR EMAILED ME to say its tire pressure was low. Perhaps it’s more accurate to say it this way: An email from Subaru was triggered by data uploaded from my 2020 Forester, all part of the automatic safety and maintenance technology built into the vehicle. The email confirmed the dashboard light indicating the same problem.
My frugal friends and I have had friendly debates about car buying. Is it better to buy a used car and avoid the instant depreciation when you drive off the dealer’s lot?

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The Wheel Deal

Bogdan Sheremeta   |  Sep 6, 2025

THE OBBBA CREATED A NEW tax deduction for “qualified passenger vehicle loan interest” effective 2025 through 2028. 
It comes with a lot of rules and nuances, so I wanted to cover this topic a bit more in depth in case you are planning to acquire a vehicle soon.
So, what is “qualified passenger vehicle loan interest”?
It means any interest that was paid during the taxable year (e.g 2025) on a loan started after Dec.

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Car Trouble

Ron Wayne   |  May 12, 2023

I WAS HAPPY TO receive this year’s boost to my Social Security benefit—but I’m regularly reminded that it doesn’t match the endless inflation.
A case in point: The same oil change at the same gas station for my 2020 Honda Fit cost me 28% more last week than it did nine months earlier. With detailed invoices, I could compare the reasons for the jump. Surprisingly, it wasn’t the cost of four quarts of full synthetic oil,

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Taking Back the Wheel

Michael Perry   |  Nov 11, 2023

WE FLEW BACK TO the U.S. last week from Madrid, and were reunited with our car of 12 years. After selling our house in late 2022 and going nomadic, we had headed to Europe six months ago, opting to have our 2008 Lexus SUV professionally stored.
In an earlier article, I recounted the thought process behind this decision. Suffice it to say, we chose this option largely because we had no firm plans for when we’d need our car again,

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Another HD Post About Cars

Jeff Bond   |  May 27, 2025

Here’s another car-themed Forum post. Last June I wrote a Humble Dollar article about vehicle ownership and longevity. I ended that article with a description of the most recent major repair required for my 2011 Subaru Forester when the clutch assembly failed and required replacement. Those of you wishing to revisit that article can view it here.
I mentioned at the end of that article it might be time to search for another Subaru. At the end of 2024 I read about the introduction of a Subaru Forester option in the new model year –

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Ride of a Lifetime

Ron Wayne   |  Apr 13, 2022

SAVED A BUNCH of money so you could retire and buy that sporty car you always wanted? My advice: Do it.
In almost 50 years of owning vehicles, I have bought just one car that was almost fully impractical. It had a shallow shelf of a trunk. My wife couldn’t drive it because it had a stick shift. More than a few times, I had to start it by pushing it down a hill,

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Spotlight: Wasserman

Living for Less

Jiab Wasserman   |  Jun 12, 2019

JIM AND I GOT married 16 years ago in our modest home. We spent just $500 and only invited immediate family members. Back then, we didn’t have any clue where life would take us. Neither of us planned to retire early, let alone retire abroad. Still, how we got married was a sign of how we wanted to live—in a financially prudent manner. We set out to keep our living costs under control, and that set us on a path to financial independence, culminating with our retirement last year. In particular, we focused on four key expenses: 1. Debt. I’ve always disliked being in debt. When we merged our finances, Jim came with credit card debt, while I had an auto loan. We realized it would take many years to pay off the mortgage on the home we just bought together. We could, however, reduce our other debts. Since credit cards were the most expensive debt, we aggressively tackled those first. We both had excellent credit scores, so we opened credit card accounts that offered an introductory 0% promo rate, using either my name or Jim’s. We’d transfer old, interest-accruing balances to the new cards and then—before the 0% promo rate ended—transfer the balances again to new cards that offered 0% promo rates. During this time, we lived frugally and managed to pay off the credit cards within a few years. We were also able to pay off my auto loan in two years. After that, our only debt was the mortgage. We sent in at least one extra payment per year. Based on my calculation, we were on track to pay off the mortgage in 22 years. 2. Transportation. For most people, their biggest expense—after housing—is their car or cars. Living in Dallas, a city with poor public transportation, we both needed good,…
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Cutting Corners

Jiab Wasserman   |  Jul 5, 2019

THE EARLY RETIREMENT movement has many naysayers and outright haters. My husband Jim and I can sympathize: We sometimes get strong pushback when we share our strategies for living frugally. “That seems like a lot of work,” some people respond. “It sounds like you don’t have much fun,” others say. Some even accuse us of lying. I readily admit it takes effort to be frugal. But then again, it takes work and sacrifice to exercise regularly, stick to a diet and get an education. Ditto for anything else worth achieving. What about the “no fun” comments? I’d say that’s a misconception. We choose to live frugally, but that hasn’t meant depriving ourselves. Rather, we choose to spend on the things that matter most to us. Here are five ways we cut corners: 1. Entertainment. Early on, we subscribed to Netflix and satellite TV. For satellite, we switched between DirecTV and Dish, depending on the promotion. But over the years, it became more and more expensive after the promo period ended, and we could no longer justify paying $80 to $100 a month to watch a few channels. We definitely didn’t need 200-plus channels, so we cancelled the satellite TV but kept Netflix. We also used alternatives to the movie theater, like Blockbuster and Redbox, so we could rent newly released DVDs. In addition, we’d stream movies at home, sometimes with vigorous debates and multiple votes over what to watch. 2. Recreation. Many people forget that our tax dollars already pay for entertainment—in the form of public parks and libraries. We always played tennis at the public courts. Not only was it free, but also we got the sense of community that comes with seeing the neighbors walk their dog, youth teams practicing soccer, or families holding a birthday party or a cookout.…
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Show Me the Cash

Jiab Wasserman   |  Jun 4, 2021

THERE ARE A GREAT many terrible problems. Having too much cash typically isn’t seen as one of them. Yet that’s where we are. Following our move back to the U.S. from Spain, we found ourselves with an abundance of cash sitting in our brokerage account. And these days, with interest rates the way they are, that cash doesn’t do much more than sit. The upshot: We decided to purchase some rental properties. We have one rental unit already—our former home—but we plan to make it our home once again. With the help of our property manager, Jeannette, who is also a realtor, we searched for and found one property we liked, and with a price that was already reasonable but which we hoped to negotiate lower. We thought we could jump to the front of the buyer’s queue by offering cash. Jeannette said we would need to show the seller proof of sufficient cash on hand. That’s when the problems arose. We didn’t want to just show our Vanguard Group brokerage statement, because that would tip the seller as to how much cash we had available, likely making her hold firm on the price and reject our request to pay for improvements in the heating and air conditioning system. Jiab called Vanguard to inquire if the folks there would issue a “line of credit” letter for the amount we wished to offer. We had more than enough cash to buy the property three times over and we could have borrowed the necessary sum using a margin loan—and yet they declined. They didn’t want to take the risk of backing us, despite the cash they were so graciously holding for us. Not to be thwarted, Jiab called around to see if we could quickly qualify for an investment loan for the…
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Less Is More

Jiab Wasserman   |  Aug 20, 2021

I RECENTLY INJURED my lower back playing tennis. I rested for a day and then decided I was well enough to resume my usual activities. But my haste worsened the pain, extending my recuperation to more than a week. Every move—even sneezing—hurt. Putting on my pants was a major struggle. I was forced to do nothing except rest. Doing nothing was the one of the hardest things I’ve ever done. Ironically, at the time of my injury, I was working with Jim on writing a book on Daoism, and I happened to be focusing on the idea of wu wei or “nonaction.” The notion: We shouldn’t act unnecessarily and instead do so only when we absolutely have to. In the Dao De Ching, Lao Tzu cautions against interfering with the state of things. He sees the world as one of precious balance, where an action that isn’t carefully considered might easily lead to an avalanche of unwanted effects before balance is eventually restored. This got me thinking about the financial world—and about how much better off we’d be if we adopted this kind of cautionary thinking by investing in index funds, keeping costs low and interfering with our portfolio's natural growth as little as possible. History has shown it’s extremely difficult to beat the market averages year in and year out. Sometimes, a rush to action hurts us. As Warren Buffett once observed, "The stock market is a device to transfer money from the impatient to the patient."
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Buen Camino

Jiab Wasserman   |  Apr 30, 2019

ON APRIL 3, MY HUSBAND Jim and I were among 262 pilgrims who made our way into Santiago de Compostela to receive an official pilgrim’s certificate for completing the required distance along one of the famous El Camino’s several routes—the most popular of which is some 500 miles. We were now certified peregrinos, or pilgrims. Because it was early in the season, ours was one of the slow days for Camino completion. Last August, 2,000 certificates per day were issued. Walking El Camino is gaining in popularity not just with Spaniards, but also with folks from around the world. In 2018, there were 327,328 certificates issued, compared to just 2,491 in 1986. This begs the question: Why do people commit themselves to such an arduous walk, which can take weeks to complete? In an age that provides convenience, comfort, speed and efficiency, thousands from around the globe walk hundreds of miles, enduring considerable physical demands, long periods of solitude, and deprivation from most modern comforts and conveniences. I can’t answer that question for all pilgrims. But I can honestly say that it was one of the most memorable experiences of my life. The certificate at the end was, of course, nice to receive, but that was the least of it. In The Pilgrimage, Paulo Coelho wrote, “It is the road that teaches us the best way to get there, and the road enriches us as we walk its length.” El Camino enriched me in three ways: I had the feeling of being fully present. I recently retired after working more than 25 years in the business world, where I had to be simultaneously mindful of the past, the current situation and the future. The simple act of walking, putting one foot in front of the other for mile after mile, hour after hour, brought…
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Grab the Wheel

Jiab Wasserman   |  Mar 13, 2020

WHILE JIM AND I cooked dinner the other night, we talked about the old cars we drove when we were younger—and how they tended to pull to one side if we took our hands off the steering wheel. We humans have a similar tendency: We head in one direction unless we make a conscious effort to be more rational. That brings me to the coronavirus and accompanying stock market plunge. We all have gut reactions to news like this. Many of us drift toward fear and even panic. If you find that happening, try these three steps: 1. Have a roadmap. Instead of reacting to the news, each of us needs a plan that’ll keep us on course. As we go from childhood to adult life to retirement, we all have financial goals along the way, things like funding college, building an emergency fund, paying off debt, amassing wealth, starting a business and more. Once we’ve developed a financial plan to take us from here to where we want to be, we need to stick with it, no matter how great the temptation to stray. For instance, three of my top priorities were saving for my children’s college, paying off the mortgage and retirement. The 2008-09 Great Recession was perhaps the scariest financial time since the Second World War. But at that juncture, my goals were still many years away, so I stuck with my plan. I continued to fund college and retirement accounts, while also sending in extra mortgage payments as often as I could. I had to cut back on luxuries, including vacations, but I kept my priorities dead center. 2. Know your risk tolerance. We need to be aware of how we react during times of stress and then plan for it. For example, when stressed, do…
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