If you save $5 a day for 40 years by not buying coffee, you’ll miss out on an awful lot of caffeine.
INDEXED ANNUITIES have been taking the insurance world by storm. According to industry sources, sales of indexed annuities—also known as equity-indexed annuities or fixed-indexed annuities—topped $70 billion last year and estimates for 2020 call for continued growth in the market.
On the surface, indexed annuities seem simple enough: You deposit a lump sum and earn interest based on stock market returns, with a guarantee that your annual return will never be less than zero.
THE FINANCIAL markets haven’t been calm over the past month, but they have been calmer—and that’s meant readers have been interested in articles about topics other than the stock market and the coronavirus. Here are June’s seven most popular blog posts:
Is your estate plan in order? Richard Connor, who has helped settle five estates, offers his list of seven must-haves.
Adam Grossman has written 143 earlier articles for HumbleDollar. But this may be his best: Check out the five minds of the successful investor.
A REVOLUTION in the workforce is creating an underutilized resource: workers over age 50. These workers represent more than a quarter of the U.S. labor force, and that number is expected to climb sharply as the population ages.
For these workers, it would be a boon—financially and otherwise—if they could stay in the workforce for longer. It would also be great for the economy, ensuring we continue to have enough workers to produce the goods and services that society needs.
I’VE BEEN WRONG many times, as I’ve noted in earlier articles. But the past few months have made me—and maybe you—look like an investment genius.
I’ve had some nice “wins” since March 13, when I started buying the stock market dip. Does that make me brilliant? Of course not. Was I “right”? That depends on how I made my decisions. A quick profit doesn’t necessarily mean I made the right call.
Too often, when we analyze our investment moves,
THIS PAST WEEK, I received an email from a reader—let’s call him Tom. He described his experience during this year’s unruly stock market. After the market dropped in February and March, he said, the stock side of his portfolio lost a lot of its value. He decided to rebalance—that is, to buy more stocks so his original asset allocation would be restored. That is just what I would have done. But the key question—always,
YOU KNOW THOSE timeless financial principles? Sometimes they don’t age so well.
Since I started writing about money in 1985, all kinds of financial principles have gone out the window—and that’s continued right up until 2020. Indeed, if you’re still hewing to the financial wisdom of the 1980s, you’re likely hurting yourself today. Here are four examples:
1. Goodbye, Peter. In the late 1980s, America’s most celebrated fund manager was Fidelity Magellan’s Peter Lynch.
NO. 19: WE SHOULD make future spending as exciting as possible, so we’re less tempted to spend today. That means visualizing our goals and imagining how great it’ll be to achieve them.
NO. 101: THE TIME horizon for your portfolio may extend beyond your lifetime. Suppose you’re age 75. If you have more than enough put aside for your own retirement and plan to bequeath assets to your children or grandchildren, you might be dealing with a time horizon of a half-century or more. That’s plenty of time to make good money in stocks.
TRIM YOUR CHECKING account. If there were a guaranteed way to earn an extra percentage point a year on your investments, you’d jump at the opportunity. So why would you leave excess cash in your checking account, where it likely isn’t earning interest, when that money could be in a high-yield savings account earning more than 1% a year?
LEVERAGE. Using debt can boost returns—or leave us broke. Let’s say we buy a $250,000 home. We put down 20%, or $50,000, and borrow the rest. If our home’s value rises to $300,000, the price gain is 20%, but the increase in our home equity would be 100%. Leverage, however, can cut both ways: A 20% price decline would wipe out our home equity.
WHAT’S YOUR favorite tax rate? This isn’t meant to be a trick question. If you’re like most people, your favorite rate is probably zero.
While a 0% tax rate is great, it isn’t easy to achieve. There’s just a handful of ways to create tax-free income. If you have young children, 529 accounts are a great option. If you earn a high income, you might buy tax-exempt municipal bonds.
And, of course, there are Roth IRAs.
IN MY ROLE as a financial planner, I hear a lot of stories. By far the most appalling and upsetting relate to life insurance. All too often, insurance salespeople leave clients with policies that are simultaneously overpriced, inadequate and inappropriate.
Are you evaluating a policy? Here’s a quick summary of the most important considerations:
What type of coverage should I have? Life insurance comes in two primary flavors: term and permanent. Term insurance,
LOOKING TO BUILD an investment portfolio—or rethink the mix you already own? Check out HumbleDollar’s new portfolio-building guide.
The guide takes the most important advice from the site’s chapters on investing, markets and taxes, and turns it into nine simple steps that should help you build a sensible, low-cost portfolio of index funds. I’ve included step No. 1 below. If you like what you read, I encourage you to peruse the other eight steps.
AS I’VE BUILT out HumbleDollar over the past few years, I’ve come to view the site not merely as a place where folks can learn about financial issues, but as a community that thinks about money in a unique way.
This shows up repeatedly in articles from guest contributors, with their focus on topics like spending thoughtfully, helping family, behavioral finance, indexing and achieving financial freedom. It’s a community where folks are trying to be rational about money,
“IS CBS PIPING fake birds into its Masters coverage?” That was the headline on a recent Slate article, which speculated that the television network might be adding “enhanced audio” of fake bird chirping to its coverage of the golf tournament.
This is not a scandal for the ages. But it serves as a timely reminder that we have fantasized notions of life that marketers and the media don’t hesitate to exploit.
Make no mistake: The PGA,
INDEXED ANNUITIES have been taking the insurance world by storm. According to industry sources, sales of indexed annuities—also known as equity-indexed annuities or fixed-indexed annuities—topped $70 billion last year and estimates for 2020 call for continued growth in the market.
On the surface, indexed annuities seem simple enough: You deposit a lump sum and earn interest based on stock market returns, with a guarantee that your annual return will never be less than zero.
THE FINANCIAL markets haven’t been calm over the past month, but they have been calmer—and that’s meant readers have been interested in articles about topics other than the stock market and the coronavirus. Here are June’s seven most popular blog posts:
Is your estate plan in order? Richard Connor, who has helped settle five estates, offers his list of seven must-haves.
Adam Grossman has written 143 earlier articles for HumbleDollar. But this may be his best: Check out the five minds of the successful investor.
A REVOLUTION in the workforce is creating an underutilized resource: workers over age 50. These workers represent more than a quarter of the U.S. labor force, and that number is expected to climb sharply as the population ages.
For these workers, it would be a boon—financially and otherwise—if they could stay in the workforce for longer. It would also be great for the economy, ensuring we continue to have enough workers to produce the goods and services that society needs.
I’VE BEEN WRONG many times, as I’ve noted in earlier articles. But the past few months have made me—and maybe you—look like an investment genius.
I’ve had some nice “wins” since March 13, when I started buying the stock market dip. Does that make me brilliant? Of course not. Was I “right”? That depends on how I made my decisions. A quick profit doesn’t necessarily mean I made the right call.
Too often, when we analyze our investment moves,
THIS PAST WEEK, I received an email from a reader—let’s call him Tom. He described his experience during this year’s unruly stock market. After the market dropped in February and March, he said, the stock side of his portfolio lost a lot of its value. He decided to rebalance—that is, to buy more stocks so his original asset allocation would be restored. That is just what I would have done. But the key question—always,
YOU KNOW THOSE timeless financial principles? Sometimes they don’t age so well.
Since I started writing about money in 1985, all kinds of financial principles have gone out the window—and that’s continued right up until 2020. Indeed, if you’re still hewing to the financial wisdom of the 1980s, you’re likely hurting yourself today. Here are four examples:
1. Goodbye, Peter. In the late 1980s, America’s most celebrated fund manager was Fidelity Magellan’s Peter Lynch.
NO. 19: WE SHOULD make future spending as exciting as possible, so we’re less tempted to spend today. That means visualizing our goals and imagining how great it’ll be to achieve them.
TRIM YOUR CHECKING account. If there were a guaranteed way to earn an extra percentage point a year on your investments, you’d jump at the opportunity. So why would you leave excess cash in your checking account, where it likely isn’t earning interest, when that money could be in a high-yield savings account earning more than 1% a year?
NO. 101: THE TIME horizon for your portfolio may extend beyond your lifetime. Suppose you’re age 75. If you have more than enough put aside for your own retirement and plan to bequeath assets to your children or grandchildren, you might be dealing with a time horizon of a half-century or more. That’s plenty of time to make good money in stocks.
LEVERAGE. Using debt can boost returns—or leave us broke. Let’s say we buy a $250,000 home. We put down 20%, or $50,000, and borrow the rest. If our home’s value rises to $300,000, the price gain is 20%, but the increase in our home equity would be 100%. Leverage, however, can cut both ways: A 20% price decline would wipe out our home equity.
WHAT’S YOUR favorite tax rate? This isn’t meant to be a trick question. If you’re like most people, your favorite rate is probably zero.
While a 0% tax rate is great, it isn’t easy to achieve. There’s just a handful of ways to create tax-free income. If you have young children, 529 accounts are a great option. If you earn a high income, you might buy tax-exempt municipal bonds.
And, of course, there are Roth IRAs.
IN MY ROLE as a financial planner, I hear a lot of stories. By far the most appalling and upsetting relate to life insurance. All too often, insurance salespeople leave clients with policies that are simultaneously overpriced, inadequate and inappropriate.
Are you evaluating a policy? Here’s a quick summary of the most important considerations:
What type of coverage should I have? Life insurance comes in two primary flavors: term and permanent. Term insurance,
LOOKING TO BUILD an investment portfolio—or rethink the mix you already own? Check out HumbleDollar’s new portfolio-building guide.
The guide takes the most important advice from the site’s chapters on investing, markets and taxes, and turns it into nine simple steps that should help you build a sensible, low-cost portfolio of index funds. I’ve included step No. 1 below. If you like what you read, I encourage you to peruse the other eight steps.
AS I’VE BUILT out HumbleDollar over the past few years, I’ve come to view the site not merely as a place where folks can learn about financial issues, but as a community that thinks about money in a unique way.
This shows up repeatedly in articles from guest contributors, with their focus on topics like spending thoughtfully, helping family, behavioral finance, indexing and achieving financial freedom. It’s a community where folks are trying to be rational about money,
“IS CBS PIPING fake birds into its Masters coverage?” That was the headline on a recent Slate article, which speculated that the television network might be adding “enhanced audio” of fake bird chirping to its coverage of the golf tournament.
This is not a scandal for the ages. But it serves as a timely reminder that we have fantasized notions of life that marketers and the media don’t hesitate to exploit.
Make no mistake: The PGA,