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Not Worthless

Julian Block  |  January 22, 2019

THE INTERNAL Revenue Code doesn’t authorize much relief for investors when they suffer capital losses that exceed their gains. It allows taxpayers each year to offset the excess against as much as $3,000 of their ordinary income from sources like salaries, pensions and withdrawals from IRAs.
What about the unused losses? The law lets investors carry forward such losses and claim them in an identical way on their tax returns in subsequent years, until they’re used up.

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Humble Arithmetic

Adam M. Grossman  |  January 21, 2019

IN THE HISTORY of the investment industry, May 1, 1975, is a date to be celebrated. On that day, the industry took not one, but two, remarkable steps forward.
The first change was an action by the SEC to deregulate stockbrokers. For the first time in more than 100 years, brokers were given the freedom to set their own commission rates on stock trades. The result was a boon for individual investors. Today, instead of paying hundreds of dollars to trade a stock,

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Repeat for Emphasis

Adam M. Grossman  |  January 20, 2019

JAMES CLEAR, in his bestselling book Atomic Habits, offers this thought-provoking notion: Suppose a plane takes off from Los Angeles on its way to New York. But after taking off, the pilot turns the nose of the plane by an almost imperceptible 89 inches. Where will the plane end up? The answer: nowhere near New York. As it flies across the country, that 89-inch difference will take it hundreds of miles off course.

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Newsletter No. 41

Jonathan Clements  |  January 19, 2019

LOOKING BACK, our financial choices almost never seem optimal. Why not? When we stared into the future and made those choices, we didn’t know what we were going to get—and that meant the only prudent course was to hedge our bets. I explore this issue in HumbleDollar’s latest newsletter.
While we ought to prepare our finances for a host of possible outcomes, we’re simply not very good at doing so. In the newsletter, I offer a slew of statistics on our prowess when it comes to risk management.

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Rewriting the Script

Ross Menke  |  January 18, 2019

WHAT DO YOU believe about money? I’m talking here about money scripts—subconscious beliefs developed since childhood that influence your financial behavior.
These beliefs have been studied extensively by Ted and Brad Klontz, the father-and-son team who founded the Financial Psychology Institute and authored Mind Over Money. Here are some common money scripts:

“Avoid debt at all costs.”
“Money is the root of all evil.”
“We can always make more money.”

While there’s an element of truth to each,

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Say Yes

Dennis Friedman  |  January 17, 2019

“I DON’T GET IT.” That’s what my friend said when I told him I would consider marrying my significant other.
“Why do you feel you need to get married?” he continued. “You’re both in your 60s. You’re not going to have any children. There’s no reason you should get married. If you did, you would make the relationship more complicated. You both probably would want a prenuptial agreement protecting your assets. That, in itself,

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Saint Jack

Jonathan Clements  |  January 16, 2019

WITHOUT A DOUBT, John C. Bogle is the greatest man I’ve had the privilege of knowing. Tomorrow, the newspapers will run obituaries detailing his many accomplishments—how he launched Vanguard Group, started the first index mutual and was, right up until the end, a fierce advocate for the everyday investor.
I first met Jack in 1987, when I was a callow 24-year-old reporter at Forbes magazine. I last saw him in October, at the Bogleheads’

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The Gift of Life

Jiab Wasserman  |  January 16, 2019

GLOBAL LIFE expectancy for almost every nation will rise during the next two decades, with Spain overtaking Japan as the country with the longest life expectancy. Meanwhile, on the list of 195 countries, the U.S. will fall 20 places, from 43rd to 64th. The average U.S. lifespan as of birth is still projected to increase slightly, from 78.7 years to 79.8, but at a slower rate than the rest of the world.
That isn’t great news for the U.S.—but it isn’t necessarily bad news for you,

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Half Wrong

John Yeigh  |  January 15, 2019

I WAS SINGLE-track mountain biking with two friends. We had stopped for a rest—which was when I discovered how completely wrong I’d been with most of my financial decisions.
We had all recently retired from the same company and were debating when to claim Social Security. One buddy stated that he planned to start at age 70, so he would receive the maximum monthly payment possible. He defended his position by arguing that he was in good health,

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Apple Dunking

Adam M. Grossman  |  January 13, 2019

IN 2005, the comedian Stephen Colbert popularized the word “truthiness.” This term, if you aren’t familiar with it, refers to something which seems like it should be true, but isn’t actually supported by evidence. Are stock market pundits guilty of truthiness? To answer the question, let’s look at a recent event.
First, some background: In the life of an investment analyst, there’s a rare but dreaded phenomenon known as a “profit warning.” This occurs when a company can tell,

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Nursing Dollars

Jonathan Clements  |  January 12, 2019

LONG-TERM CARE is the elephant in the room that many of us try mightily to ignore. It’s a potentially huge expense: A semi-private room in a nursing home costs an average $89,297 a year, according to Genworth Financial.
But what should we do about it? For answers, I turned to Christine Benz, director of personal finance at Chicago financial researchers Morningstar Inc., where she’s worked for more than 25 years. Benz has written extensively on long-term care (LTC).

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Paper Chase

Ross Menke  |  January 11, 2019

IF YOU’RE GOING to form one new financial habit this year, make it good recordkeeping. A system that’s easy to follow will improve your financial life both today and for years to come. With all of the annual investment statements and tax documents you’re about to get, this is a great time to start.
Whenever I go to my mailbox, I’m on the receiving end of countless advertisements, credit card offers, insurance notices and more.

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Subtraction Mode

Dennis Friedman  |  January 10, 2019

I’VE LATELY HAD this desire to spend money—not on big-ticket items like a car, boat or expensive watch, but on just about everything else.
When I go to the grocery store, I don’t look at prices anymore. If I want something, I just buy it. When eating out, I don’t look at the prices on the menu. I just order. I have a cable, internet and landline package that costs me $136 a month,

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Take a Break

Julian Block  |  January 9, 2019

GOT A VACATION home? There’s an overlooked tax break if you rent it out—but a potential tax hit if you sell.
First, the tax break: Long-standing rules allow homeowners to completely sidestep taxes on rental income—provided they meet a key requirement: They rent out their cottage or condo for less than 15 days during the year.
That can be a great tax break for those who own dwellings near annual events where rents soar for short periods.

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Healthy Change?

Richard Quinn  |  January 8, 2019

SOME PEOPLE see Medicare-for-All as the utopia for health care, resulting in lower costs, higher quality and universal coverage. Others see M4A—a common shorthand for Medicare-for-All—as destroying health care in America, with total control residing in the hands of government bureaucrats.
Neither assessment is correct. Consider eight points:

Every health care system in the world has problems. Each system struggles with rising costs driven by factors like aging populations, development of new drugs and new medical technology,

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