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An initial public stock offering is a lottery ticket that thinks it’s respectable.

Garbage Time

MANY PARENTS assume that what counts are the big events, such as graduations or elaborately planned vacations. But I’ve always found that the best moments in life weren’t necessarily the ones circled on the calendar.
The stock market is a lot like family life. Forget trying to figure out the ideal moment to get in or out of the market. Instead, what really matters is the time spent sitting around in stocks.
Jerry Seinfeld affectionately calls his mundane interactions with his kids “garbage time.” He prefers that label to what most parents aim for—the impossible-to-meet “quality time” standard.

Read more »

Adding the Minuses

IT’S NO SECRET that mutual fund costs are critically important. In fact, when it comes to the performance of funds in the same category, they’re the single most important differentiator. In the words of Morningstar, the investment research firm, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make a better decision.”
But how do you go about totaling up a mutual fund’s costs?

Read more »

Rule the Roost

I AM AGE 57 and I’m planning to move, so you might imagine I’d be interested in the best states to retire. On that score, there’s plenty of advice available.
Bankrate says the best option for retirees is Nebraska, followed by Iowa, Missouri, South Dakota and Florida. Meanwhile, WalletHub gives the nod to Florida, with Colorado, New Hampshire, Utah and Wyoming rounding out the top five. Want a third opinion? Blacktower Financial Management puts Iowa at No.

Read more »

Losing My Balance

CNBC ANCHOR Becky Quick recently summed up today’s retirement investing dilemma in one sentence: “You’re never going to make enough money if you have 40% of your money in bonds.” She, along with many pundits, believe the old standby recommendation to invest 60% in stocks and 40% in bonds—the classic balanced portfolio—is dead. Google “60/40 asset allocation” and the majority of recent articles have titles that include such words as “eulogy,” “endangered,” “dead,” “the end of” and “not good enough.”
Likewise,

Read more »

Make Less Keep More

“PERFORMANCE COMES and goes, but costs roll on forever,” said Vanguard Group’s founder, the great John Bogle. It’s been just over a year since Jack passed away.
I think he would have approved of Vanguard’s recent announcements that it had reduced fees on 56 funds and eliminated trading commissions to buy and sell stocks and ETFs. The latter followed similar announcements from other major discount brokers. All of this is good news—especially right now.

Read more »

Count the Noncash

MOST PEOPLE think of their earnings as what they receive in their paycheck. But that’s not the case. Typically, it’s more—sometimes far more.
That brings me to my first topic: chief executive officers. You’ve all heard the numbers: This or that CEO was paid a salary of $30 million. Actually, no CEO was paid that sum or close to it. Those amounts represent total compensation, which might include their regular salary, stock awards and options,

Read more »

Money Guide

Pick Your Provider

TO KEEP YOUR financial life simple, you’ll want to stash your investment dollars at just one or two financial companies. Which firms should you pick? Look for fund companies and brokerage firms that offer the investments you’re aiming to buy—and do so at a modest overall cost.

Read more »

Manifesto

NO. 9: WE SPEND too much time fretting over our investments—where there’s limited room to add value—and too little on other financial issues, like taxes, insurance and estate planning.

Truths

NO. 5: TIME is money. The younger you start saving, the more years of compounding you’ll enjoy. After a dozen years, you should reach a tipping point, where your annual investment gains outstrip the dollars you sock away. What if you put off saving until your 40s? You’ll get little help from the markets—and likely struggle to amass enough for retirement.

Act

GET READY to remodel. This is the time of year when homeowners start lining up contractors for their spring remodeling projects. If you’ll need to borrow, consider setting up a home equity line of credit. Planning to sell in the next few years? Stick with cosmetic improvements and avoid major projects, because you’re unlikely to recoup the money you spend.

Think

TAX EFFICIENCY. We should minimize our portfolio’s tax bill, so we keep more of what we make. That means making full use of retirement accounts, while thinking carefully about which investments to own in our taxable account. For instance, we might allocate bonds and restrict trading to our IRA, while using our taxable account to hold stock index funds.

Second Look

Retirement

We the Problem

WHY IS THE U.S. economy growing so slowly? Should we bar new immigrants—and toss out some of those already here? Can we afford today’s Social Security retirement benefits? These three huge public policy issues might seem unrelated, but they are connected by two demographic realities: The workforce is growing too slowly—and the retiree population is growing too quickly.
Over the next decade, the U.S. civilian workforce is projected to grow at 0.5% a year,

Read more »

Family Finance

Now or Later?

WANT TO CUT your tax bill for this year and next? The main thing is to act—or not act—before Dec. 31, while there’s still time to take advantage of tax angles that can generate dramatic savings.
Once we’re beyond Dec. 31, it’s generally too late to do anything but file Form 1040 on the basis of what took place the preceding year. There are a few exceptions. For instance, in early 2019, you can still make deductible contribu­tions to some tax-deferred retirement accounts,

Read more »

Investing

Don’t Concentrate

WHO DOESN’T like free money? I know I do. If you’ve worked for a major U.S. corporation, you have probably also been offered free money. But there’s a potential downside—in the form of a large, undiversified investment bet.
What am I talking about? Let’s start with the matching employer contribution that’s offered in about half of 401(k) plans. You put in a portion of every paycheck and your company then matches all or half of your contribution.

Read more »

Lists

Terms of the Trade

CONSUMER economics and media literacy have evolved to become important fields of study, analyzing the way consumers make decisions—and how those decisions can be nudged. Here are 20 of the tricks and techniques used by marketers and others:
Aspirational buying. When consumers are encouraged to live like those they admire, even if they can’t afford it.
Bandwagon appeal. The psychological nudge to do—or consume—something because others are doing it. Also known as FOMO,

Read more »
Home Call to Action

Mindset

Sharing the Wealth

SHOULD THOSE of us who are better off financially feel guilty? When I read about income inequality, folks living paycheck to paycheck and the like, I occasionally feel a twinge of guilt. But it quickly passes.
This lack of guilt doesn’t imply a lack of empathy on my part or that of others who have been financially successful. Indeed, wealth is frequently used to help others. Society has benefited greatly not just from the jobs created by the Rockefellers,

Read more »

Garbage Time

MANY PARENTS assume that what counts are the big events, such as graduations or elaborately planned vacations. But I’ve always found that the best moments in life weren’t necessarily the ones circled on the calendar.
The stock market is a lot like family life. Forget trying to figure out the ideal moment to get in or out of the market. Instead, what really matters is the time spent sitting around in stocks.
Jerry Seinfeld affectionately calls his mundane interactions with his kids “garbage time.” He prefers that label to what most parents aim for—the impossible-to-meet “quality time” standard.

Read more »

Adding the Minuses

IT’S NO SECRET that mutual fund costs are critically important. In fact, when it comes to the performance of funds in the same category, they’re the single most important differentiator. In the words of Morningstar, the investment research firm, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make a better decision.”
But how do you go about totaling up a mutual fund’s costs?

Read more »

Rule the Roost

I AM AGE 57 and I’m planning to move, so you might imagine I’d be interested in the best states to retire. On that score, there’s plenty of advice available.
Bankrate says the best option for retirees is Nebraska, followed by Iowa, Missouri, South Dakota and Florida. Meanwhile, WalletHub gives the nod to Florida, with Colorado, New Hampshire, Utah and Wyoming rounding out the top five. Want a third opinion? Blacktower Financial Management puts Iowa at No.

Read more »

Losing My Balance

CNBC ANCHOR Becky Quick recently summed up today’s retirement investing dilemma in one sentence: “You’re never going to make enough money if you have 40% of your money in bonds.” She, along with many pundits, believe the old standby recommendation to invest 60% in stocks and 40% in bonds—the classic balanced portfolio—is dead. Google “60/40 asset allocation” and the majority of recent articles have titles that include such words as “eulogy,” “endangered,” “dead,” “the end of” and “not good enough.”
Likewise,

Read more »

Make Less Keep More

“PERFORMANCE COMES and goes, but costs roll on forever,” said Vanguard Group’s founder, the great John Bogle. It’s been just over a year since Jack passed away.
I think he would have approved of Vanguard’s recent announcements that it had reduced fees on 56 funds and eliminated trading commissions to buy and sell stocks and ETFs. The latter followed similar announcements from other major discount brokers. All of this is good news—especially right now.

Read more »

Count the Noncash

MOST PEOPLE think of their earnings as what they receive in their paycheck. But that’s not the case. Typically, it’s more—sometimes far more.
That brings me to my first topic: chief executive officers. You’ve all heard the numbers: This or that CEO was paid a salary of $30 million. Actually, no CEO was paid that sum or close to it. Those amounts represent total compensation, which might include their regular salary, stock awards and options,

Read more »

Free Newsletter

Home Call to Action

Manifesto

NO. 9: WE SPEND too much time fretting over our investments—where there’s limited room to add value—and too little on other financial issues, like taxes, insurance and estate planning.

Act

GET READY to remodel. This is the time of year when homeowners start lining up contractors for their spring remodeling projects. If you’ll need to borrow, consider setting up a home equity line of credit. Planning to sell in the next few years? Stick with cosmetic improvements and avoid major projects, because you’re unlikely to recoup the money you spend.

Truths

NO. 5: TIME is money. The younger you start saving, the more years of compounding you’ll enjoy. After a dozen years, you should reach a tipping point, where your annual investment gains outstrip the dollars you sock away. What if you put off saving until your 40s? You’ll get little help from the markets—and likely struggle to amass enough for retirement.

Think

TAX EFFICIENCY. We should minimize our portfolio’s tax bill, so we keep more of what we make. That means making full use of retirement accounts, while thinking carefully about which investments to own in our taxable account. For instance, we might allocate bonds and restrict trading to our IRA, while using our taxable account to hold stock index funds.

Money Guide

Start Here

Pick Your Provider

TO KEEP YOUR financial life simple, you’ll want to stash your investment dollars at just one or two financial companies. Which firms should you pick? Look for fund companies and brokerage firms that offer the investments you’re aiming to buy—and do so at a modest overall cost.

Read more »

Second Look

Retirement

We the Problem

WHY IS THE U.S. economy growing so slowly? Should we bar new immigrants—and toss out some of those already here? Can we afford today’s Social Security retirement benefits? These three huge public policy issues might seem unrelated, but they are connected by two demographic realities: The workforce is growing too slowly—and the retiree population is growing too quickly.
Over the next decade, the U.S. civilian workforce is projected to grow at 0.5% a year,

Read more »

Family Finance

Now or Later?

WANT TO CUT your tax bill for this year and next? The main thing is to act—or not act—before Dec. 31, while there’s still time to take advantage of tax angles that can generate dramatic savings.
Once we’re beyond Dec. 31, it’s generally too late to do anything but file Form 1040 on the basis of what took place the preceding year. There are a few exceptions. For instance, in early 2019, you can still make deductible contribu­tions to some tax-deferred retirement accounts,

Read more »

Investing

Don’t Concentrate

WHO DOESN’T like free money? I know I do. If you’ve worked for a major U.S. corporation, you have probably also been offered free money. But there’s a potential downside—in the form of a large, undiversified investment bet.
What am I talking about? Let’s start with the matching employer contribution that’s offered in about half of 401(k) plans. You put in a portion of every paycheck and your company then matches all or half of your contribution.

Read more »

Lists

Terms of the Trade

CONSUMER economics and media literacy have evolved to become important fields of study, analyzing the way consumers make decisions—and how those decisions can be nudged. Here are 20 of the tricks and techniques used by marketers and others:
Aspirational buying. When consumers are encouraged to live like those they admire, even if they can’t afford it.
Bandwagon appeal. The psychological nudge to do—or consume—something because others are doing it. Also known as FOMO,

Read more »

Mindset

Sharing the Wealth

SHOULD THOSE of us who are better off financially feel guilty? When I read about income inequality, folks living paycheck to paycheck and the like, I occasionally feel a twinge of guilt. But it quickly passes.
This lack of guilt doesn’t imply a lack of empathy on my part or that of others who have been financially successful. Indeed, wealth is frequently used to help others. Society has benefited greatly not just from the jobs created by the Rockefellers,

Read more »