Retirement’s big financial risk isn’t dying early on but, rather, living longer than we ever imagined.
WE HUMANS CAN be a bit irrational. We’ll struggle to the bitter end over potential losses of property, whether it’s fretting over investment losers, trying to recover money we’ve lent or wrangling over our parents’ estate. But strangely, when it comes to what may be our most valuable resource—time—we collectively shrug off losses as a mere nothing. That “mere nothing” can often have significant financial implications for future monies earned or lost.
Time has specific properties.
WITH MY OFFER of $375,000 accepted, I was faced with coming up with $80,000 to cover my 20% down payment and other closing costs. I had additional expenses as well: There was a home inspection, radon test and sewer assessment that all had to be paid for. And because I’d be breaking the lease on my apartment, I would also need an additional $1,800 for that.
Coming up with the first $50,000 was easy.
A LITTLE WHILE back, a friend—let’s call him Paul—recommended a book with an unusual title: How Not to Die. As you might guess, it’s about health, nutrition and longevity. Since Paul is a cardiologist and knows a thing or two about what can land people in hospital, I took his recommendation seriously and immediately ordered a copy.
When the book arrived, I learned that the prescription for not dying isn’t so simple.
IS THAT BUNDLE of joy really a source of joy? Lots of parents—myself included—think so. But the data suggest otherwise. Numerous academic studies have found that parents tend to be less happy than the childless. The latest HumbleDollar newsletter delves into this thorny issue.
The newsletter also includes our usual list of recent blogs. Our next newsletter—the final one of 2018—is slated for Saturday, Dec. 22.
Follow Jonathan on Twitter @ClementsMoney and on Facebook.
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,
WHAT DO AMERICANS buy online? CreditCards.com found that 26% of households purchase groceries online every week. Among weekly purchases, the next most popular categories were prepared foods (21%) and streaming services (13%).
DO CHILDREN BRING happiness? As someone who has invested heavily in small people over the years—I have two children and two stepchildren—I want to believe the answer is “yes.” But the evidence suggests otherwise.
This, I realize, is a touchy subject, so let me offer a few crucial caveats before you fire off that fiery email. The studies cited here offer conclusions based on broad averages. Your experience could be entirely different. Moreover, it may be that children give special meaning to our lives,
NO. 95: WEALTH ISN’T driven solely—or even largely—by investment returns. Divorce, ill-health, unemployment, the cost of raising children and caring for parents, and—most important—your savings habits will likely have a far greater impact on your wealth. The good news: While some of these factors can’t be controlled, some are firmly within your grasp.
DUMP ROTTEN investments. We often keep bum investments for bad reasons: We inherited them, we hate to sell at a loss, we don’t want to admit our mistake, or perhaps it’s our employer’s stock and selling feels disloyal. Got an investment with high costs or which doesn’t improve your portfolio’s diversification? Cut your losses—which could trim your tax bill—and start afresh.
VOLATILITY. A volatile portfolio isn’t just nerve-racking. It also hurts compounding. Suppose portfolio No. 1 gains 10% this year and next, while No. 2 climbs 30%, only to lose 10% in the second year. The portfolios might appear to have the same return. But in fact, No. 1 would have a 21% cumulative gain, vs. 17% for No. 2. Want to reduce volatility? Diversification is the key.
HumbleDollar is edited by Jonathan Clements, author of From Here to Financial Happiness.
WE HUMANS CAN be a bit irrational. We’ll struggle to the bitter end over potential losses of property, whether it’s fretting over investment losers, trying to recover money we’ve lent or wrangling over our parents’ estate. But strangely, when it comes to what may be our most valuable resource—time—we collectively shrug off losses as a mere nothing. That “mere nothing” can often have significant financial implications for future monies earned or lost.
Time has specific properties.
WITH MY OFFER of $375,000 accepted, I was faced with coming up with $80,000 to cover my 20% down payment and other closing costs. I had additional expenses as well: There was a home inspection, radon test and sewer assessment that all had to be paid for. And because I’d be breaking the lease on my apartment, I would also need an additional $1,800 for that.
Coming up with the first $50,000 was easy.
A LITTLE WHILE back, a friend—let’s call him Paul—recommended a book with an unusual title: How Not to Die. As you might guess, it’s about health, nutrition and longevity. Since Paul is a cardiologist and knows a thing or two about what can land people in hospital, I took his recommendation seriously and immediately ordered a copy.
When the book arrived, I learned that the prescription for not dying isn’t so simple.
IS THAT BUNDLE of joy really a source of joy? Lots of parents—myself included—think so. But the data suggest otherwise. Numerous academic studies have found that parents tend to be less happy than the childless. The latest HumbleDollar newsletter delves into this thorny issue.
The newsletter also includes our usual list of recent blogs. Our next newsletter—the final one of 2018—is slated for Saturday, Dec. 22.
Follow Jonathan on Twitter @ClementsMoney and on Facebook.
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,
WHAT DO AMERICANS buy online? CreditCards.com found that 26% of households purchase groceries online every week. Among weekly purchases, the next most popular categories were prepared foods (21%) and streaming services (13%).
DUMP ROTTEN investments. We often keep bum investments for bad reasons: We inherited them, we hate to sell at a loss, we don’t want to admit our mistake, or perhaps it’s our employer’s stock and selling feels disloyal. Got an investment with high costs or which doesn’t improve your portfolio’s diversification? Cut your losses—which could trim your tax bill—and start afresh.
NO. 95: WEALTH ISN’T driven solely—or even largely—by investment returns. Divorce, ill-health, unemployment, the cost of raising children and caring for parents, and—most important—your savings habits will likely have a far greater impact on your wealth. The good news: While some of these factors can’t be controlled, some are firmly within your grasp.
VOLATILITY. A volatile portfolio isn’t just nerve-racking. It also hurts compounding. Suppose portfolio No. 1 gains 10% this year and next, while No. 2 climbs 30%, only to lose 10% in the second year. The portfolios might appear to have the same return. But in fact, No. 1 would have a 21% cumulative gain, vs. 17% for No. 2. Want to reduce volatility? Diversification is the key.
DO CHILDREN BRING happiness? As someone who has invested heavily in small people over the years—I have two children and two stepchildren—I want to believe the answer is “yes.” But the evidence suggests otherwise.
This, I realize, is a touchy subject, so let me offer a few crucial caveats before you fire off that fiery email. The studies cited here offer conclusions based on broad averages. Your experience could be entirely different. Moreover, it may be that children give special meaning to our lives,
HumbleDollar is edited by Jonathan Clements, author of From Here to Financial Happiness.