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Prime of Life

I WAS 51-years-old when I ate prime rib for the first time. As it turned out, it was a life-changing moment. It might be difficult to believe eating a choice cut of beef could lead to an altered understanding of financial priorities, but it did.
I grew up in a fairly typical 1970s middle class family. Hamburger Helper, tuna casserole and peanut butter sandwiches made up the bulk of my diet. Our family rarely ate out and,

Read more »

Human Factor

MY BIGGEST initial mistake as a financial planner: underestimating the power of emotions. My office is located near top universities such as Harvard, MIT and Boston University. I assumed my well-educated clients, many with strong quantitative backgrounds, were simply looking to me for additional analytical insights.
Instead, my clients proved to be as human as everybody else. One top academic statistician, who claimed to be frugal and cautious, shared with me an annuity policy he purchased from a close friend at his church.

Read more »

Math vs. Emotion

YOU’VE NO DOUBT heard this before: Asset allocation is the single most important investment decision. If you have the right mix of stocks, bonds, cash and maybe real estate, you sharply increase your chances of success. 
But how do you pick the right mix? There are rules of thumb based on age, there’s a statistical approach called Modern Portfolio Theory, there are risk tolerance questionnaires and there are cash flow-based approaches. Each delivers a different answer—because each emphasizes different factors.

Read more »

Developing Story

I’M A FAN of emerging stock markets—for two key reasons. But I also have qualms—for two key reasons.
Readers frequently write to me about emerging markets, and those messages usually coincide with periods of stomach-churning volatility, which is what we’ve witnessed recently: MSCI’s emerging markets index tumbled 15% in 2018 and was up just 4% in 2019’s first five months—after being up as much as 14% earlier this year. But as I tell my nervous correspondents,

Read more »

Building Wealth

I’VE BEEN READING about how people aren’t saving enough money, and how almost half of all Americans carry a balance on their credit cards. Looking to be more financially prudent? Here are 10 pointers on how to build wealth and gain financial security over your lifetime:
1. Save—for a reason. Saving money is the key to building a substantial portfolio. One secret to being a good saver: Have something worthwhile to save for. It might be homeownership or early financial independence.

Read more »

Missing the Point

IN EARLY MAY, I wrote about 16 ways that people waste money on everything from tattoos to shoes to children’s toys. That blog was subsequently posted on MarketWatch, where it collected almost 800 comments, most positive, but many not so much.
I was called out of touch, accused of having an entitlement mentality, talking down to people, privileged and more. I had clearly touched a nerve. Some commenters went into great detail about how difficult their lives were and how there was no money to waste.

Read more »

Money Guide

Elderly Relatives

LOOKING AFTER your parents or other elderly family members? In all likelihood, it’s a team effort, with perhaps your siblings involved and others whom you have hired. To help matters run more smoothly, consider these steps: Create a list of experts. Pull together the names and contact information for doctors, dentists, lawyers, tax preparers, financial advisors and anybody else who assists your parents. Make sure your siblings and other caregivers have the list. Find a backup. If you and your siblings don’t live near your parents, find somebody local who can check on your parents if you become concerned. Make sure that person has a set of keys to your parents’ home. Agree on how to share costs. If your parents don’t have enough money for their own care, you and your siblings may have to pick up part of the cost. Early on, discuss how much you can afford to spend and create a system of monthly accounting, so nobody ends up shortchanged. Watch for abuse. There might be physical or emotional intimidation or, alternatively, perhaps someone is stealing from your parents. If you think something is awry, be quick to alert others. Have a contingency plan. What if things deteriorate with your parents—and it’s suddenly clear they can no longer live independently? Ideally, you should discuss this with your parents ahead of time. For instance, if the next step is an assisted living facility, it will be easier if you check out a few places ahead of time and get your parents’ opinion. Throughout, keep the focus on what your parents want. Emphasize that you’re trying to help them maintain their independence. As we age, we have a sense that we’re losing control. If you start making decisions without consulting your parents or you push them too hard to make changes, they will likely feel as if they’re being forced to surrender yet more control—and the conversations could quickly turn contentious. Want additional information? Check out the guides available from the Consumer Financial Protection Bureau. Next: After a Death Previous: Nearing Retirement Blogs: Taking Their Money and Taking Care
Read more »

Archive

Money Well-Wasted

MOST MONEY conversations, especially with financial advisors, orbit around the concept of increasing dollars. When is it best to buy stocks? Answer: in a down economy. Reallocate money from bonds. When is it best to buy bonds? Answer: in a thriving economy. Reallocate money from stocks. When is it best to save? The answer invariably seems to be: always. On the one hand, I embrace this concept. A chronic self-tither, I consistently give 10% of my income to savings and sometimes more. On the other hand, despite—or perhaps because of—the habit I just described, I also recognize over-savers can take things too far, robbing themselves of the fulfillment and joy that spending brings. There's nothing wrong with spending money—as long as it’s spent on things that deliver plenty of happiness. Research shows we enjoy experiences over things. We most cherish time with friends and family, and also activities where we are in “flow”—those moments when we’re completely absorbed by work or hobbies that we’re passionate about. I recommend 10% Happier for those interested in more on this topic. For me, such “non-necessary items” include awesome coffee, fancy dinners (preferably with good champagne), pedicures with my girlfriends, personal training, deep tissue massage, life coaching and therapy. All are things I value because they generally involve people I love or they support hobbies where I feel in flow. I derive no greater joy than when investing in the nutrients on my plate, whether at farmers’ markets or over dinner deserving of a sixth star. As an artist, I thrill at the hue of egg yolks from pasture-raised hens, ruby beets, eggplant purples and the verdant green of rough-chopped beans. As a friend and lover, I feel rich sharing rich nutrients with people I love. As an entrepreneur, I value investing in my body and brain. I first learned the value of diet when researching ways to reduce crippling anxiety—the kind that prevented focus and sleep—while running my first agency. I was dumbfounded when I learned my “uber-healthy diet” was a major culprit for chronic stress. If we eat crazy chemicals, we feel crazy. If we eat wholesome foods, we feel whole. I’m confident some of my ahas can help you, too:
  • Most “health food” ingredients are chock-full of chemicals. Simple rule of thumb: Avoid boxes and wrappers.
  • Low-fat diets limit creativity and happiness. Optimal brain function requires that one-third to half of calories come from fat.
  • It’s easy to ruin “good fat.” Olive oil goes bad when heated. Instead, cook with fats that are solid at room temperature, like coconut oil, ghee or duck fat.
  • We get depressed when we don’t eat enough complex carbs. (They metabolize as happiness-producing chemicals, like dopamine and serotonin.) Our bodies absorb the most nutrients from sprouted, organic grains.
  • When it comes to meat, the current FDA definition for “organic” is extremely loose. The wrong meats can make our bodies hotbeds for disease. Purchase grass-fed meats, free range chicken and wild caught fish.
For me, eating good food thrills my taste buds, while positioning me to be my best self. The experience is also a reminder that I live the life I choose, that I’m always in control. Since good food can be insanely expensive, especially grass-fed meats, here are a few cost-effective solutions I’ve found that you might find useful, too:
  • One in five fruits and veggies don’t meet most stores’ cosmetic standards. Imperfect Produce delivers food to consumers that grocery chains consider too ugly to sell—at 30% to 50% below the normal cost.
  • Most grocery store prices are high because they’re effectively the middleman between food producers and consumers. Businesses like Thrive Market eliminate middleman costs and offer healthy, organic food at wholesale prices, generally 25% to 50% below retail.
Caitlin Roberson, author of 30 Ways to Happy, lives and works in Silicon Valley, where she helps top tech executives change the world through business storytelling. Her previous blog was Self-Tithing. Caitlin obsessively lifts weights and attends hip-hop classes, so she can tithe in Napa, guilt-free. You can learn more about her at CaitlinRoberson.com and follow her on Instagram @CRobRobber.
Read more »

Numbers

OVER THE 15 YEARS through year-end 2018, 94% of actively managed U.S. stock funds lagged behind the broad market—even after adjusting for risk, calculates S&P Dow Jones Indices.

Home Call to Action

Manifesto

NO. 43: IF OUR GOAL is investment growth, we should almost never buy insurance products. That means no cash-value life insurance, costly variable annuities or indexed annuities.

Truths

NO. 66: TWENTY stocks aren’t enough. One rule says you need 20 stocks to be diversified. With that many, your portfolio’s volatility won’t be much greater than the broad market’s. Problem is, you might still earn returns that differ radically from the market averages. To avoid this tracking error, you need to own hundreds of stocks.

Act

PUT RETIREMENT first. Are you socking away at least 12% of your pretax income toward retirement, including any matching contribution to your employer’s retirement plan? To amass enough for retirement, you may need to throttle back other financial ambitions, including the size of the house you buy and how much you help your kids with college costs.

Think

SKEWNESS. The most a stock can lose is 100%, but its potential gain is unlimited. Every year, a minority of stocks with huge returns skew the market higher, so most stocks end up trailing the averages. The irony: The big winners make beating the market seem easy—and yet betting on a handful of stocks will likely result in market-lagging performance.

Prime of Life

I WAS 51-years-old when I ate prime rib for the first time. As it turned out, it was a life-changing moment. It might be difficult to believe eating a choice cut of beef could lead to an altered understanding of financial priorities, but it did.
I grew up in a fairly typical 1970s middle class family. Hamburger Helper, tuna casserole and peanut butter sandwiches made up the bulk of my diet. Our family rarely ate out and,

Read more »

Human Factor

MY BIGGEST initial mistake as a financial planner: underestimating the power of emotions. My office is located near top universities such as Harvard, MIT and Boston University. I assumed my well-educated clients, many with strong quantitative backgrounds, were simply looking to me for additional analytical insights.
Instead, my clients proved to be as human as everybody else. One top academic statistician, who claimed to be frugal and cautious, shared with me an annuity policy he purchased from a close friend at his church.

Read more »

Math vs. Emotion

YOU’VE NO DOUBT heard this before: Asset allocation is the single most important investment decision. If you have the right mix of stocks, bonds, cash and maybe real estate, you sharply increase your chances of success. 
But how do you pick the right mix? There are rules of thumb based on age, there’s a statistical approach called Modern Portfolio Theory, there are risk tolerance questionnaires and there are cash flow-based approaches. Each delivers a different answer—because each emphasizes different factors.

Read more »

Developing Story

I’M A FAN of emerging stock markets—for two key reasons. But I also have qualms—for two key reasons.
Readers frequently write to me about emerging markets, and those messages usually coincide with periods of stomach-churning volatility, which is what we’ve witnessed recently: MSCI’s emerging markets index tumbled 15% in 2018 and was up just 4% in 2019’s first five months—after being up as much as 14% earlier this year. But as I tell my nervous correspondents,

Read more »

Building Wealth

I’VE BEEN READING about how people aren’t saving enough money, and how almost half of all Americans carry a balance on their credit cards. Looking to be more financially prudent? Here are 10 pointers on how to build wealth and gain financial security over your lifetime:
1. Save—for a reason. Saving money is the key to building a substantial portfolio. One secret to being a good saver: Have something worthwhile to save for. It might be homeownership or early financial independence.

Read more »

Missing the Point

IN EARLY MAY, I wrote about 16 ways that people waste money on everything from tattoos to shoes to children’s toys. That blog was subsequently posted on MarketWatch, where it collected almost 800 comments, most positive, but many not so much.
I was called out of touch, accused of having an entitlement mentality, talking down to people, privileged and more. I had clearly touched a nerve. Some commenters went into great detail about how difficult their lives were and how there was no money to waste.

Read more »

Free Newsletter

Numbers

OVER THE 15 YEARS through year-end 2018, 94% of actively managed U.S. stock funds lagged behind the broad market—even after adjusting for risk, calculates S&P Dow Jones Indices.

Manifesto

NO. 43: IF OUR GOAL is investment growth, we should almost never buy insurance products. That means no cash-value life insurance, costly variable annuities or indexed annuities.

Home Call to Action

Act

PUT RETIREMENT first. Are you socking away at least 12% of your pretax income toward retirement, including any matching contribution to your employer’s retirement plan? To amass enough for retirement, you may need to throttle back other financial ambitions, including the size of the house you buy and how much you help your kids with college costs.

Truths

NO. 66: TWENTY stocks aren’t enough. One rule says you need 20 stocks to be diversified. With that many, your portfolio’s volatility won’t be much greater than the broad market’s. Problem is, you might still earn returns that differ radically from the market averages. To avoid this tracking error, you need to own hundreds of stocks.

Think

SKEWNESS. The most a stock can lose is 100%, but its potential gain is unlimited. Every year, a minority of stocks with huge returns skew the market higher, so most stocks end up trailing the averages. The irony: The big winners make beating the market seem easy—and yet betting on a handful of stocks will likely result in market-lagging performance.

Money Guide

Start Here

Elderly Relatives

LOOKING AFTER your parents or other elderly family members? In all likelihood, it’s a team effort, with perhaps your siblings involved and others whom you have hired. To help matters run more smoothly, consider these steps: Create a list of experts. Pull together the names and contact information for doctors, dentists, lawyers, tax preparers, financial advisors and anybody else who assists your parents. Make sure your siblings and other caregivers have the list. Find a backup. If you and your siblings don’t live near your parents, find somebody local who can check on your parents if you become concerned. Make sure that person has a set of keys to your parents’ home. Agree on how to share costs. If your parents don’t have enough money for their own care, you and your siblings may have to pick up part of the cost. Early on, discuss how much you can afford to spend and create a system of monthly accounting, so nobody ends up shortchanged. Watch for abuse. There might be physical or emotional intimidation or, alternatively, perhaps someone is stealing from your parents. If you think something is awry, be quick to alert others. Have a contingency plan. What if things deteriorate with your parents—and it’s suddenly clear they can no longer live independently? Ideally, you should discuss this with your parents ahead of time. For instance, if the next step is an assisted living facility, it will be easier if you check out a few places ahead of time and get your parents’ opinion. Throughout, keep the focus on what your parents want. Emphasize that you’re trying to help them maintain their independence. As we age, we have a sense that we’re losing control. If you start making decisions without consulting your parents or you push them too hard to make changes, they will likely feel as if they’re being forced to surrender yet more control—and the conversations could quickly turn contentious. Want additional information? Check out the guides available from the Consumer Financial Protection Bureau. Next: After a Death Previous: Nearing Retirement Blogs: Taking Their Money and Taking Care
Read more »

Archive

Money Well-Wasted

MOST MONEY conversations, especially with financial advisors, orbit around the concept of increasing dollars. When is it best to buy stocks? Answer: in a down economy. Reallocate money from bonds. When is it best to buy bonds? Answer: in a thriving economy. Reallocate money from stocks. When is it best to save? The answer invariably seems to be: always. On the one hand, I embrace this concept. A chronic self-tither, I consistently give 10% of my income to savings and sometimes more. On the other hand, despite—or perhaps because of—the habit I just described, I also recognize over-savers can take things too far, robbing themselves of the fulfillment and joy that spending brings. There's nothing wrong with spending money—as long as it’s spent on things that deliver plenty of happiness. Research shows we enjoy experiences over things. We most cherish time with friends and family, and also activities where we are in “flow”—those moments when we’re completely absorbed by work or hobbies that we’re passionate about. I recommend 10% Happier for those interested in more on this topic. For me, such “non-necessary items” include awesome coffee, fancy dinners (preferably with good champagne), pedicures with my girlfriends, personal training, deep tissue massage, life coaching and therapy. All are things I value because they generally involve people I love or they support hobbies where I feel in flow. I derive no greater joy than when investing in the nutrients on my plate, whether at farmers’ markets or over dinner deserving of a sixth star. As an artist, I thrill at the hue of egg yolks from pasture-raised hens, ruby beets, eggplant purples and the verdant green of rough-chopped beans. As a friend and lover, I feel rich sharing rich nutrients with people I love. As an entrepreneur, I value investing in my body and brain. I first learned the value of diet when researching ways to reduce crippling anxiety—the kind that prevented focus and sleep—while running my first agency. I was dumbfounded when I learned my “uber-healthy diet” was a major culprit for chronic stress. If we eat crazy chemicals, we feel crazy. If we eat wholesome foods, we feel whole. I’m confident some of my ahas can help you, too:
  • Most “health food” ingredients are chock-full of chemicals. Simple rule of thumb: Avoid boxes and wrappers.
  • Low-fat diets limit creativity and happiness. Optimal brain function requires that one-third to half of calories come from fat.
  • It’s easy to ruin “good fat.” Olive oil goes bad when heated. Instead, cook with fats that are solid at room temperature, like coconut oil, ghee or duck fat.
  • We get depressed when we don’t eat enough complex carbs. (They metabolize as happiness-producing chemicals, like dopamine and serotonin.) Our bodies absorb the most nutrients from sprouted, organic grains.
  • When it comes to meat, the current FDA definition for “organic” is extremely loose. The wrong meats can make our bodies hotbeds for disease. Purchase grass-fed meats, free range chicken and wild caught fish.
For me, eating good food thrills my taste buds, while positioning me to be my best self. The experience is also a reminder that I live the life I choose, that I’m always in control. Since good food can be insanely expensive, especially grass-fed meats, here are a few cost-effective solutions I’ve found that you might find useful, too:
  • One in five fruits and veggies don’t meet most stores’ cosmetic standards. Imperfect Produce delivers food to consumers that grocery chains consider too ugly to sell—at 30% to 50% below the normal cost.
  • Most grocery store prices are high because they’re effectively the middleman between food producers and consumers. Businesses like Thrive Market eliminate middleman costs and offer healthy, organic food at wholesale prices, generally 25% to 50% below retail.
Caitlin Roberson, author of 30 Ways to Happy, lives and works in Silicon Valley, where she helps top tech executives change the world through business storytelling. Her previous blog was Self-Tithing. Caitlin obsessively lifts weights and attends hip-hop classes, so she can tithe in Napa, guilt-free. You can learn more about her at CaitlinRoberson.com and follow her on Instagram @CRobRobber.
Read more »