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To add to your wealth, focus on minimizing the subtractions: taxes, investment costs and foolish financial bets.

What life lessons would you like to pass on to the next generation?

"Some more life lessons to ponder: To make sure opportunity knocks on the door, put in more doors. Be nice to people on the way up. You will need their help on the way down. Surround yourself with friends who are better than yourself. Invest in meaningful experiences and not material possessions Forgive and forget. Life is too short to harbor resentment for long. Never regret major decisions. Learn from it, make it work and deal with it. Remember when things go so badly for you, you still have things that others can only dream about. Be thankful for what you have. Identify role models and follow in their footsteps till you establish yourself to be a role model for many. Everything in life is temporary and can be taken away at any time. Enjoy before you lose them."
- smr1082
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Quinn thinks “free” is a dirty word. 

"“Medicare does not organize health care nor does it manage care.” Does Medicare decide which treatments they will pay for? Does Medicare decide which drugs they will pay for? Or have limits on either? If the answer to any of these questions is yes, then yes, it is government managed."
- corrupt
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Helping family

Be the first to comment.
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Good Old Days?

"I saw Alice Cooper for $2.50 in 1971"
- Michael Bruno
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Facebook Users, Beware! There’s a Scam Afoot!

"It is easy for our emotional selves to get excited by what looks like good/great deals. We So WANT to believe we are getting a deal. This of course clouds our judgement. Of course, the scammer is trying to hook our "greedy" side. There is a reason anglers use shinny lures to catch fish. The fish finds out too late that they were scammed."
- Steven Duncan
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Bridge the Gap

"Having a list is a start, but the HD community is great about discussing the 'whys' of their decision(s), how well it worked for them, and things they would do different."
- Cheryl Low
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New ArticlesAll Articles »

Time’s A-Wasting

MY LIFE’S GOAL WAS to make money. I make no apologies for this. I’m not particularly gifted in this pursuit, but I did persevere.
I take satisfaction that I stuck to my goal despite all obstacles. There were many trips, falls, mistakes and failures along the way. I had to work hard and seek a new job each time my old employment ended. I set out to do something—and I did it.
That all changed when I retired.

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Danger: Taxes Ahead

THE JUNE 16, 2021, edition of The Washington Post carried this headline: “Cristiano Ronaldo snubbed Coca-Cola. The company’s market value fell $4 billion.”
The incident in question had occurred a few days earlier, at a press conference in Budapest, where the soccer star was set to play in a high-profile championship game. Coca-Cola was a sponsor of the tournament, so when Ronaldo sat down at the microphone, he found two bottles of Coke positioned in front of him.

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A Taxing Retirement

THE TOUGH PART COMES last.
Saving for retirement is pretty straightforward: You sock away as much as you can, favor stock funds, diversify broadly, keep investment costs low and make the most of tax-advantaged retirement accounts. By contrast, paying for retirement can involve mind-boggling complexity—and a big reason is the tax code.
The good news: Once you quit the workforce, you have a fair amount of control over your annual tax bill, especially if you aren’t yet taking required minimum distributions (RMDs) from your traditional retirement accounts,

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What You Can Do

THE WAVES AND WEATHER are always changing on the coast of Maine. Last summer, I paddled my canoe to a nearby island in the sun, and two hours later had to feel my way back through a fog that hid the mainland.
There are longer-term forces at play here, too. The black mussel beds I steered around as a child are all gone now. So is the sea grass that made a good hiding place for crabs.

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Making Me Earn It

NOW THAT I’M RETIRED and have all the time in the world, I often use that time to worry about money. That brings me to a recent offer from Wells Fargo to get a $525 bonus for depositing $25,000 in a savings account for 90 days.
My immediate concern was whether the $525 would more than compensate for the paltry interest rate that Wells Fargo pays. A quick calculation determined that investing $25,000 in a Wells Fargo savings account and getting the $525 bonus—rather than the 4.25% I could then earn with Capital One 360 Performance Savings—would still leave me almost $260 ahead.

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When Easy Money Bites

IN THE EARLY 1980s, I was a bachelor in Brooklyn. Unskilled at cooking, I didn’t eat at home unless my food came out of a cereal box or snack bag. For regular meals, I depended on a small neighborhood diner.
It was open for breakfast, lunch and dinner seven days a week. On weekends, it was my main source of food. Like so many diners I’ve visited since, it offered complete meals—soup, main course and dessert—for one price.

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Get Educated

think

FRAMING. How choices are presented to us can influence how we decide. For instance, we might opt to buy stocks if we’re told there’s a 75% chance of making money each year—but avoid them if we’re told there’s a 25% risk of loss. Similarly, we’re more likely to contribute to the 401(k) if joining is the default choice, rather than an option we need to select.

act

GIVE AWAY appreciated assets. By donating stocks with unrealized capital gains, you can help a charity, avoid capital gains taxes and get an immediate tax deduction. Looking for more retirement income? Use appreciated assets to buy a charitable gift annuity. Over age 70½? You could save on taxes by donating directly to charity from your IRA.

Truths

NO. 56: NO INVESTMENT is risk-free. While the standard measure of risk is volatility, it isn’t the only risk. We also need to consider threats such as inflation, trailing the market averages and failing to amass enough to meet our goals. Indeed, for long-term investors, stocks may be the least risky choice, while safe investments like Treasury bills can be a disaster.

Money Guide

Mortgage Bonds

NEW MORTGAGES ARE often securitized, meaning they’re packaged into bonds and sold to investors. An attractive investment? Mortgage bonds should yield more than comparable government bonds, in part to compensate investors for so-called prepayment risk. That’s the risk that homeowners will pay off their mortgages early, perhaps because they move or refinance or, alternatively, by making extra principal payments. That early mortgage payoff is more likely to occur if rates fall. Homeowners with older, higher-interest-rate mortgages realize they could do better, so they refinance or pay ahead on their loan. That creates an asymmetry in how mortgage bonds perform. When rates rise, mortgage bonds are likely to fall, just like other bonds. But if rates fall, mortgage bonds may not perform as well as other bonds, because of those prepayments. If you own mortgage bonds, what you really want is for interest rates to stay relatively constant. Looking for a low-cost mortgage-bond fund? Check out mutual funds such as Fidelity GNMA Fund, Vanguard GNMA Fund and Vanguard Mortgage-Backed Securities Index Fund, and ETFs like iShares MBS ETF, SPDR Portfolio Mortgage Backed Bond ETF and Vanguard Mortgage-Backed Securities ETF. Next: Corporate Bonds Previous: Municipal Bonds
Read more »

Manifesto

NO. 67: NERVOUS about stocks? We should take comfort from their fundamental value—as evidenced by the profits that companies generate, the dividends they pay and the assets they own.

Second LookAll Articles »

Retirement

My Best-Laid Plans

I HAD MY SIGHTS SET on retiring at age 59. Not exactly FIRE—financial independence-retire early—but certainly a bit earlier than my peers, close friends and family. I wanted to seek new challenges after spending more than 25 years in academic research. Our financial plan was solid. My wife and I calculated we’d have more than enough retirement income.
But my plans were upended, first by the COVID-19 pandemic and then by two life-threatening health issues.

Read more »

Family Finance

Hitting the Road

MY WIFE AND I JUST returned from the first extended road trip of our retirement. We were away two weeks, drove 2,800 miles and visited 10 states. The primary reason for the trip was to stay five days on a houseboat on Beaver Lake, Arkansas, with seven friends.
We broke the trip into three phases. The first part took us from New Jersey to northwest Arkansas in two-and-a-half days. Along the way, we stopped in St.

Read more »

Investing

Passive Stampede?

INVESTMENT MANAGER Michael Burry made waves last week when he issued an apocalyptic forecast: Index funds, he said, are in a bubble similar to the housing bubble that ended very badly in 2008. Burry couldn’t say when the crash would come, but noted ominously that, “the longer it goes on, the worse the crash will be.”
Burry acknowledged that he’s “100% focused on stock picking,” so—at first glance—his criticism seems not unlike other active fund managers’ criticisms of index funds,

Read more »

Lists

Learned on the Job

IT’S A COMMON BELIEF that a young person’s first job is important because it teaches life lessons about work and the value of money. There’s a reason this belief is so common: It’s largely true.
Still, letting a young person loose in the world to learn lessons isn’t as straightforward as you might think. I learned the following seven lessons from my first job—some useful, some decidedly less so.
Lesson No. 1: Avoid Celery
My first job was picking strawberries.

Read more »
Safety net

Mindset

My Unemployed Life

I HAVE BEEN FIRED, downsized, restructured and laid off 10 times in my life. The first time was at age 16, when I worked for a McDonald’s-like hamburger joint, and the last time was shortly before I turned 70, when I was working for an insurance company as the manager of regulatory compliance.  
I can’t blame this on discrimination. I’m a white Christian male, five feet 10 inches tall, college educated, and of sound mind and body,

Read more »

Free Newsletter

Get Educated

Manifesto

NO. 67: NERVOUS about stocks? We should take comfort from their fundamental value—as evidenced by the profits that companies generate, the dividends they pay and the assets they own.

think

FRAMING. How choices are presented to us can influence how we decide. For instance, we might opt to buy stocks if we’re told there’s a 75% chance of making money each year—but avoid them if we’re told there’s a 25% risk of loss. Similarly, we’re more likely to contribute to the 401(k) if joining is the default choice, rather than an option we need to select.

act

GIVE AWAY appreciated assets. By donating stocks with unrealized capital gains, you can help a charity, avoid capital gains taxes and get an immediate tax deduction. Looking for more retirement income? Use appreciated assets to buy a charitable gift annuity. Over age 70½? You could save on taxes by donating directly to charity from your IRA.

Truths

NO. 56: NO INVESTMENT is risk-free. While the standard measure of risk is volatility, it isn’t the only risk. We also need to consider threats such as inflation, trailing the market averages and failing to amass enough to meet our goals. Indeed, for long-term investors, stocks may be the least risky choice, while safe investments like Treasury bills can be a disaster.

Money Guide

Start Here

Mortgage Bonds

NEW MORTGAGES ARE often securitized, meaning they’re packaged into bonds and sold to investors. An attractive investment? Mortgage bonds should yield more than comparable government bonds, in part to compensate investors for so-called prepayment risk. That’s the risk that homeowners will pay off their mortgages early, perhaps because they move or refinance or, alternatively, by making extra principal payments. That early mortgage payoff is more likely to occur if rates fall. Homeowners with older, higher-interest-rate mortgages realize they could do better, so they refinance or pay ahead on their loan. That creates an asymmetry in how mortgage bonds perform. When rates rise, mortgage bonds are likely to fall, just like other bonds. But if rates fall, mortgage bonds may not perform as well as other bonds, because of those prepayments. If you own mortgage bonds, what you really want is for interest rates to stay relatively constant. Looking for a low-cost mortgage-bond fund? Check out mutual funds such as Fidelity GNMA Fund, Vanguard GNMA Fund and Vanguard Mortgage-Backed Securities Index Fund, and ETFs like iShares MBS ETF, SPDR Portfolio Mortgage Backed Bond ETF and Vanguard Mortgage-Backed Securities ETF. Next: Corporate Bonds Previous: Municipal Bonds
Read more »
Second LookAll Articles »

Retirement

My Best-Laid Plans

I HAD MY SIGHTS SET on retiring at age 59. Not exactly FIRE—financial independence-retire early—but certainly a bit earlier than my peers, close friends and family. I wanted to seek new challenges after spending more than 25 years in academic research. Our financial plan was solid. My wife and I calculated we’d have more than enough retirement income.
But my plans were upended, first by the COVID-19 pandemic and then by two life-threatening health issues.

Read more »

Family Finance

Hitting the Road

MY WIFE AND I JUST returned from the first extended road trip of our retirement. We were away two weeks, drove 2,800 miles and visited 10 states. The primary reason for the trip was to stay five days on a houseboat on Beaver Lake, Arkansas, with seven friends.
We broke the trip into three phases. The first part took us from New Jersey to northwest Arkansas in two-and-a-half days. Along the way, we stopped in St.

Read more »

Investing

Passive Stampede?

INVESTMENT MANAGER Michael Burry made waves last week when he issued an apocalyptic forecast: Index funds, he said, are in a bubble similar to the housing bubble that ended very badly in 2008. Burry couldn’t say when the crash would come, but noted ominously that, “the longer it goes on, the worse the crash will be.”
Burry acknowledged that he’s “100% focused on stock picking,” so—at first glance—his criticism seems not unlike other active fund managers’ criticisms of index funds,

Read more »
Safety net

Lists

Learned on the Job

IT’S A COMMON BELIEF that a young person’s first job is important because it teaches life lessons about work and the value of money. There’s a reason this belief is so common: It’s largely true.
Still, letting a young person loose in the world to learn lessons isn’t as straightforward as you might think. I learned the following seven lessons from my first job—some useful, some decidedly less so.
Lesson No. 1: Avoid Celery
My first job was picking strawberries.

Read more »

Mindset

My Unemployed Life

I HAVE BEEN FIRED, downsized, restructured and laid off 10 times in my life. The first time was at age 16, when I worked for a McDonald’s-like hamburger joint, and the last time was shortly before I turned 70, when I was working for an insurance company as the manager of regulatory compliance.  
I can’t blame this on discrimination. I’m a white Christian male, five feet 10 inches tall, college educated, and of sound mind and body,

Read more »