FREE NEWSLETTER

Diligent savers are admirable. Even more admirable: Retirees who transform themselves from great savers to happy spenders.

Latest PostsAll Discussions »

The Vision, the Babe , Einstein and the Q

mflack  |  Apr 25, 2026

"I've only attended one of these so I could personally hear the sales pitch. It was mostly fear mongering in a bid to sell annuities. I need to make this more about the free meal and withhold judgment on the quality of the materials. Anyone with the ability to use a BAll financial calculator will know the product are typically subpar for most."
- Mike Xavier
Read more »

Note to HD Writers and Contributors

Elaine M. Clements  |  Apr 3, 2026

"Elaine, Above you asked why some writers were no longer posting. Well for me it is partially based on my posts not getting published, as the last three I've submitted only two were ever published. And both times they were published in such a way that they never appeared on the home page. For example, the post I submitted on April 25, was only published after I contacted Bogdan. In this specific case, as it was published with the date I submitted it (April 25) and not the date it was posted (April 27), it was never listed on the home page and therefore just slipped out the backdoor uncommented and unread.   I spend a fair amount of time writing and editing my posts before submission . . . it's all very frustrating."
- mflack
Read more »

The great COLA debate-maybe not the expected solution.

R Quinn  |  Apr 26, 2026

"In your last paragraph, Richard, you apparently make an assumption about the financial literacy on the part of a lot of people. You seem to assume that they know, or should know, how to determine what income they need to supplement their social security payments. I know many people, some of whom are college educated, who have no idea how to figure out when to claim social security, let alone how much additional money they will need to finance a particular lifestyle. They are clueless. Meaning, for some, it's an information deficit - not necessarily one of priorities and financial discipline (though I suspect that misguided priorities and lack of discipline are along for the ride). We can say it's their responsibility, it's their problem to figure this out. And that's true. But it's also society's problem. This country does little to prepare people for even the most rudimentary financial planning."
- John Katz
Read more »

Investing Fundamentals: A Simple Guide for Beginners

William Housley  |  Apr 24, 2026

"It's a great idea that I wrote about a while ago."
- Rick Connor
Read more »

How much to provide a college student monthly?

Chris  |  Apr 25, 2026

"I might be the odd one here. Both of my kids finished state university in Texas, we opened a Texas tomorrow funds for both when the younger was born, so both can attend state university free of tuitions and fees. They have also been admitted to top private universities in Texas. We paid everything else, living expenses, car, insurance and give them a credit card to spend anything they deem not excessive. We paid for oversee summer schools. If I have to do it again, I will not change anything."
- Hung Nguyen
Read more »

Happy 50th!

Rick Connor  |  Apr 27, 2026

"In my employer 401(k) retirement plan the S&P 500 index fund at Vanguard was the lowest expense cost option and has often been the the only low expense cost option in many plans that I saw in tax clients plan options have over the years. After retirement I did a trustee to trustee direct rollover of my 401(k) balance to a traditional IRA to eliminate the quarterly administrative expense that the employer 401(k) plan charged in addition to the expense that the individual fund choices charged. My understanding is Mr. Bogle typically never praised the low expense index funds that included foreign equities but I have adopted the thinking of Jonathan Clements wrote about in How Much Abroad and I am now a happy owner of Vanguard Global index fund (VT) exchange traded class. Low cost index funds certainly have made my investing easier and more profitable. Now I just need to control myself and stay the course on my investing. Thanks for reminding me of the 50th."
- William Perry
Read more »

Live a little

greg_j_tomamichel  |  Apr 25, 2026

"The funny thing is: we had to smuggle it back out, neither one of us wanted any. My grandson and daughter scoffed the evidence yesterday.😂"
- Mark Crothers
Read more »

Around the Obstacles

ArticleDan Smith  |  Apr 25, 2026

I WAS 48 years old when the judgement was final and the papers were signed. My former wife and I split our net worth 50/50. There were no arguments over household items like furniture; I didn’t care about that stuff. Pam gladly accepted my proposal that she keep the house, and all its equity, in exchange for me keeping an offsetting amount of the IRAs and my 401(k), a very good move for my future self. By giving up the house, I also escaped the mortgage, which was the only loan obligation I had. Had there been consumer debt (there was none), I would have eliminated that as quickly as possible, beginning with the highest interest loans. I was ordered to pay spousal support to age 65, or my retirement if I worked beyond 65. I would be lying if I told you that I liked paying alimony. Still, it wasn’t unfair considering our age at divorce, Pam’s depression, and the fact that she mostly stayed at home to raise our kids.  Long before the divorce was ever final, I knew I’d have to make up for lost time if I ever wanted to retire in the manner to which I wanted to had become accustomed. The divorce wasn’t going to be the only obstacle I would have to overcome. Thirty years of delivering beverages resulted in osteoarthritis and plantar fasciitis; my days on the beer truck were rapidly coming to an end.  I needed a plan. Where Was I?  I had to understand exactly where I was, and what my options were. 
  1. My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
  2. I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
  3. I had acquired bookkeeping, payroll, and tax prep skills through my involvement with my local union, though I never pictured myself as the type to sit behind a desk, in a dimly lit office, crunching numbers beneath the glow of one of those green shade banker’s lamps.
  4. As a last resort, I could fall back on my truck driving skills, using my commercial drivers license to get a job hauling ‘no-touch’ freight of some sort.
  5. Last but not least, I needed a place to live. “Hello, mom and dad, I need my room back”. Sleeping on the twin mattress I gave up 25 years earlier, was not part of my plan.
  6. I was determined not to let my occupation as a beer truck driver dictate my future job prospects.
Where did I want to be? 
  1. Where to live? Living with the folks was never meant to be a long term thing. After three months of that, I signed my first ever apartment lease as a lessee, as opposed to a lessor. That lasted two years, until a very large increase in the rent caused me to buy a duplex, and become a lessor again.
  2. Where to work? I continued my work as a delivery driver for three more years. My position as the local union president, and my five paid weeks of vacation actually kept me off of the truck much of the time. That enabled me to tolerate the maladies that would eventually force me out of that job. Having absolutely no desire to spend the balance of my life languishing on SSDI and a minimal IRA balance, I set off on the path to becoming a financial services guy. That did not work out, and if you want more information on that, here’s a link.
  3. To make ends meet, I turned to my last resort; driving a truck. Piloting an 18-wheeler was not how I envisioned my remaining working days. And although the freight was ‘no touch’, driving 600 miles every day in a Kenworth tractor is still pretty hard on your vertebrae. But sometimes you have to do what you have to do to survive and to keep your eye on your finish line. My heart goes out to full time drivers, that job is no walk in the park.
  4. And what about love? My preference was to be in a relationship, but not any relationship. I wanted a good partner, I wanted to be a good partner as well. What qualities would I look for in a new partner? Independent, established, confident, and nice. Was I asking too much?
Making it All Work  Finally, preparation collided with opportunity. In other words, I got lucky. Remember when I told you I didn’t picture myself as ever being a bean-counter? Two established financial services guys set me up with free office space and began funneling tax prep clients to me. What began with me preparing taxes for about three dozen of my union brothers, instantly turned into over 100 clients. There I was, a bean counter of sorts.  I kept that truck driving job for several more years. And remember that duplex I bought after the rent spiked at my apartment? Well, there was this girl living next door. Enter Chrissy. We became best friends. She is no longer my neighbor. She is now my spouse. Of course, at the time we met, aside from being a nice guy, I wasn’t much of a catch. Man, she took a chance on me.  As my client count went up, my days driving the big-rig went down. When the client count got to about 400, I retired forever from driving. No more trips to Chicago, Des Moines, Snow Shoe PA, or Jersey City. Chrissy and I began pounding 40% of our gross pay into savings. It would take until I was 70, but working together, we got to a place each of us only dreamed we would be. By living within our means, and keeping lifestyle creep to a minimum, we surpassed our goals.  Chris retired at 64 and helped me during my final three years as a tax preparer. Lucky for me, Federal Wage and Hour never found out that I violated the minimum wage laws by never paying her in the first place. I sold the practice at age 70. I prepared 650 tax returns in my final year.  It’s important to note that during our journey, we did not starve ourselves of food nor fun. We counted 27 trips during our first ten years together. Chris was great at finding great deals to various destinations in the Caribbean, and we turned several of her business trips into mini vacations as well. It’s important to prepare for the future, but have some fun along the way as well.  I hope this piece inspires someone who is still on the road, dealing with similar obstacles, and wondering if there was a way around them. For 30 years, Dan Smith was a driver-salesman and local union representative, before building a successful income-tax practice in Toledo, Ohio. He retired in 2022. Dan has two beautiful daughters, two loving sons-in-law and seven grandchildren. He and Chris, the love of his life, have been together for two great decades and counting. Check out Dan's earlier articles.
Read more »

Hidden Surcharge

DAN SMITH  |  Apr 21, 2026

"Ormode, yes, a $900K RMD is certainly a first world problem."
- DAN SMITH
Read more »

A Life You Build

Jeff Peck  |  Apr 19, 2026

"Truly a great story. Thanks for sharing. I didn't benefit from the same things you did, but my grocery store manager father was Dave Ramsay before Dave Ramsay was Dave Ramsay. Would never get a credit card. Paid for cars by saving up for them. Paid off his house in 11 years. Bought utility stocks as they paid a dividend. I learned early on important all that was and though I have had credit cards I pay them off every month and until recently (70) I was always saving and investing."
- Pete Tittl
Read more »

Rethinking the “Right” Time for Social Security

Andrew Clements  |  Apr 23, 2026

"Another great HD contribution--thanks for this."
- Kristine Hayes
Read more »

Lonely Island (Correct Edit)

Mark Crothers  |  Apr 22, 2026

"Bob, what a great post!"
- DAN SMITH
Read more »

Driving Prices

ArticleAdam M. Grossman  |  Apr 25, 2026

IN 2020, ELECTRIC car maker Lucid Motors brought in revenue of $4 million. Five years later, sales had risen impressively, to more than $1 billion. In 2025 alone, sales grew 68%. That sounds like a success story, and through that lens, it is. And yet, over that same period, the company’s stock dropped more than 89%. What happened? A better question is: What didn’t happen? Despite growing sales, the company has struggled to turn a profit. On sales of $1.3 billion last year, Lucid posted a loss of $3.8 billion. It’s experienced production problems and management turnover. It’s seen its competitors cut prices. As a result, it’s been forced to issue new shares, thus diluting the value of existing investors’ holdings, just to keep the lights on. In fairness to Lucid, the road to success is rarely a straight line. Arizona State University professor Hendrik Bessembinder studies the performance of public companies, and the results are sobering. In new research, he found that, over the past 100 years, the median return among stocks trading on U.S. exchanges was negative 6.9%. Only a minority of stocks, in other words, made any money at all. Why are these results so dismal? Four factors stand out. The first is emotion—specifically, investors’ emotions. After Lucid went public in late-2020, its stock began rising quickly, and in the early months of 2021, the shares gained nearly 500%. What was driving those gains? Since the company was just starting production, very little can be attributed to the company’s financial results. Instead, it was simply investor excitement around the electric vehicle market and the optimistic view that Lucid would become the next Tesla. But no sooner did the stock rise that it fell again. And in the years since, it’s been an overwhelmingly downward slide for investors. In the last interview he gave before he died in 1976, Benjamin Graham compared the stock market to a seesaw. “The present optimism is going to be overdone and the next pessimism will be overdone.” And that causes stocks to go to extremes. Fifty years later, Graham’s observation seems no less accurate. Indeed, investment manager Cliff Asness has argued that, because of the internet, the impact of emotions on the market is even worse today. Due to what he calls “the less-efficient market hypothesis,” inaccurate information can spread much more quickly today than it did in the past. You may recall the phenomenon in which a group of day traders, led by a YouTube personality who called himself Roaring Kitty, was able to drive up the stock of a nearly-bankrupt company for no rational reason. That couldn’t have happened in the years before social media. Another factor that can drive stock prices is government action, and this also explains part of Lucid’s slide. When the government ended tax credits on electric vehicles last year, that made electric cars much more expensive for consumers. And contrary to intuition, this year’s higher gas prices haven’t done much to entice buyers back to EVs. On the other hand, government action can sometimes be positive. In 2017, for example, Congress voted to cut the corporate tax rate from 35% to 21%, significantly boosting public company profits. Perhaps the most obvious factor that can drive stock prices is competition. This can take a few different forms. Coke and Pepsi, for example, have been battling for more than 100 years, but their relative positions don’t change very much. At this point, neither company is going to go out of business as a result of the other. In his book The Innovator’s Dilemma, the late Clayton Christensen described a much more disruptive form of competition—the sort that upends industries entirely, such as when 19-year-old Bill Gates outsmarted IBM. At the time, IBM was the most dominant company in the computer industry, but over time its position faded. It underestimated how important personal computers would become and didn’t take the market seriously. Years later, it ended up selling off its PC business entirely, and today makes very little hardware. The same sort of thing happened to BlackBerry, to Kodak and to Polaroid, among others. Like IBM, all of these companies had enormous resources. But, according to Christensen, it was their success that became their greatest weakness, because it caused them to underestimate threats and to downplay the likelihood that anything fundamental might ever change. Ken Olson, the founder of Digital Equipment Corporation, a leader in minicomputers in the 1960s and 1970s, famously asserted, “There is no reason anyone would want a computer in their home.” The tricky aspect of the innovator’s dilemma, though, is that it isn’t universal. Consider the early years of the auto industry. Before automobiles gained popularity in the early 1900s, it’s estimated that there were 4,000 companies in the horse-and-carriage business. The right move for any of these companies would have been to try to transition into automobile manufacturing. Carriage makers, especially, had relevant skills and were best positioned to make this leap. But they adopted a collective mindset that the automobile wasn’t going to succeed, dismissing cars as “devil wagons.” But one of these carriage makers, Studebaker, did correctly assess where things were going and successfully transitioned to making automobiles. The rest failed, faded away or switched into other businesses. Companies, in other words, can be very good at one thing but lose their footing in the face of change. That’s a key factor behind Bessembinder’s findings. A final factor that can cause companies to stumble: random events. Consider, for example, what occurred in Thailand in 2011. Heavy rainfall resulted in flooding that caused large industrial areas to become submerged. This included the factories of hard drive manufacturers Western Digital and Seagate, causing their stocks to drop 35% and 45%, respectively. Both recovered, but this is an example of how even good companies can run into bad luck. Years of research has shown how difficult it is to predict stock prices. Bessembinder’s new work, however, makes an additional important point, which is that, for all of the reasons discussed here, and likely others, stocks face many more roads to potential demise than to success. Thus, to succeed at stock-picking doesn’t just require research and hard work. It requires an almost prophetic ability to identify the tiny handful of stocks that will turn into homeruns. But since the odds are so steeply against success, that’s a key reason I see it as so important to stick with the simpler and less risky alternative of index funds.   Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
Read more »

The Vision, the Babe , Einstein and the Q

mflack  |  Apr 25, 2026

"I've only attended one of these so I could personally hear the sales pitch. It was mostly fear mongering in a bid to sell annuities. I need to make this more about the free meal and withhold judgment on the quality of the materials. Anyone with the ability to use a BAll financial calculator will know the product are typically subpar for most."
- Mike Xavier
Read more »

Note to HD Writers and Contributors

Elaine M. Clements  |  Apr 3, 2026

"Elaine, Above you asked why some writers were no longer posting. Well for me it is partially based on my posts not getting published, as the last three I've submitted only two were ever published. And both times they were published in such a way that they never appeared on the home page. For example, the post I submitted on April 25, was only published after I contacted Bogdan. In this specific case, as it was published with the date I submitted it (April 25) and not the date it was posted (April 27), it was never listed on the home page and therefore just slipped out the backdoor uncommented and unread.   I spend a fair amount of time writing and editing my posts before submission . . . it's all very frustrating."
- mflack
Read more »

The great COLA debate-maybe not the expected solution.

R Quinn  |  Apr 26, 2026

"In your last paragraph, Richard, you apparently make an assumption about the financial literacy on the part of a lot of people. You seem to assume that they know, or should know, how to determine what income they need to supplement their social security payments. I know many people, some of whom are college educated, who have no idea how to figure out when to claim social security, let alone how much additional money they will need to finance a particular lifestyle. They are clueless. Meaning, for some, it's an information deficit - not necessarily one of priorities and financial discipline (though I suspect that misguided priorities and lack of discipline are along for the ride). We can say it's their responsibility, it's their problem to figure this out. And that's true. But it's also society's problem. This country does little to prepare people for even the most rudimentary financial planning."
- John Katz
Read more »

Investing Fundamentals: A Simple Guide for Beginners

William Housley  |  Apr 24, 2026

"It's a great idea that I wrote about a while ago."
- Rick Connor
Read more »

How much to provide a college student monthly?

Chris  |  Apr 25, 2026

"I might be the odd one here. Both of my kids finished state university in Texas, we opened a Texas tomorrow funds for both when the younger was born, so both can attend state university free of tuitions and fees. They have also been admitted to top private universities in Texas. We paid everything else, living expenses, car, insurance and give them a credit card to spend anything they deem not excessive. We paid for oversee summer schools. If I have to do it again, I will not change anything."
- Hung Nguyen
Read more »

Happy 50th!

Rick Connor  |  Apr 27, 2026

"In my employer 401(k) retirement plan the S&P 500 index fund at Vanguard was the lowest expense cost option and has often been the the only low expense cost option in many plans that I saw in tax clients plan options have over the years. After retirement I did a trustee to trustee direct rollover of my 401(k) balance to a traditional IRA to eliminate the quarterly administrative expense that the employer 401(k) plan charged in addition to the expense that the individual fund choices charged. My understanding is Mr. Bogle typically never praised the low expense index funds that included foreign equities but I have adopted the thinking of Jonathan Clements wrote about in How Much Abroad and I am now a happy owner of Vanguard Global index fund (VT) exchange traded class. Low cost index funds certainly have made my investing easier and more profitable. Now I just need to control myself and stay the course on my investing. Thanks for reminding me of the 50th."
- William Perry
Read more »

Live a little

greg_j_tomamichel  |  Apr 25, 2026

"The funny thing is: we had to smuggle it back out, neither one of us wanted any. My grandson and daughter scoffed the evidence yesterday.😂"
- Mark Crothers
Read more »

Around the Obstacles

ArticleDan Smith  |  Apr 25, 2026

I WAS 48 years old when the judgement was final and the papers were signed. My former wife and I split our net worth 50/50. There were no arguments over household items like furniture; I didn’t care about that stuff. Pam gladly accepted my proposal that she keep the house, and all its equity, in exchange for me keeping an offsetting amount of the IRAs and my 401(k), a very good move for my future self. By giving up the house, I also escaped the mortgage, which was the only loan obligation I had. Had there been consumer debt (there was none), I would have eliminated that as quickly as possible, beginning with the highest interest loans. I was ordered to pay spousal support to age 65, or my retirement if I worked beyond 65. I would be lying if I told you that I liked paying alimony. Still, it wasn’t unfair considering our age at divorce, Pam’s depression, and the fact that she mostly stayed at home to raise our kids.  Long before the divorce was ever final, I knew I’d have to make up for lost time if I ever wanted to retire in the manner to which I wanted to had become accustomed. The divorce wasn’t going to be the only obstacle I would have to overcome. Thirty years of delivering beverages resulted in osteoarthritis and plantar fasciitis; my days on the beer truck were rapidly coming to an end.  I needed a plan. Where Was I?  I had to understand exactly where I was, and what my options were. 
  1. My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
  2. I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
  3. I had acquired bookkeeping, payroll, and tax prep skills through my involvement with my local union, though I never pictured myself as the type to sit behind a desk, in a dimly lit office, crunching numbers beneath the glow of one of those green shade banker’s lamps.
  4. As a last resort, I could fall back on my truck driving skills, using my commercial drivers license to get a job hauling ‘no-touch’ freight of some sort.
  5. Last but not least, I needed a place to live. “Hello, mom and dad, I need my room back”. Sleeping on the twin mattress I gave up 25 years earlier, was not part of my plan.
  6. I was determined not to let my occupation as a beer truck driver dictate my future job prospects.
Where did I want to be? 
  1. Where to live? Living with the folks was never meant to be a long term thing. After three months of that, I signed my first ever apartment lease as a lessee, as opposed to a lessor. That lasted two years, until a very large increase in the rent caused me to buy a duplex, and become a lessor again.
  2. Where to work? I continued my work as a delivery driver for three more years. My position as the local union president, and my five paid weeks of vacation actually kept me off of the truck much of the time. That enabled me to tolerate the maladies that would eventually force me out of that job. Having absolutely no desire to spend the balance of my life languishing on SSDI and a minimal IRA balance, I set off on the path to becoming a financial services guy. That did not work out, and if you want more information on that, here’s a link.
  3. To make ends meet, I turned to my last resort; driving a truck. Piloting an 18-wheeler was not how I envisioned my remaining working days. And although the freight was ‘no touch’, driving 600 miles every day in a Kenworth tractor is still pretty hard on your vertebrae. But sometimes you have to do what you have to do to survive and to keep your eye on your finish line. My heart goes out to full time drivers, that job is no walk in the park.
  4. And what about love? My preference was to be in a relationship, but not any relationship. I wanted a good partner, I wanted to be a good partner as well. What qualities would I look for in a new partner? Independent, established, confident, and nice. Was I asking too much?
Making it All Work  Finally, preparation collided with opportunity. In other words, I got lucky. Remember when I told you I didn’t picture myself as ever being a bean-counter? Two established financial services guys set me up with free office space and began funneling tax prep clients to me. What began with me preparing taxes for about three dozen of my union brothers, instantly turned into over 100 clients. There I was, a bean counter of sorts.  I kept that truck driving job for several more years. And remember that duplex I bought after the rent spiked at my apartment? Well, there was this girl living next door. Enter Chrissy. We became best friends. She is no longer my neighbor. She is now my spouse. Of course, at the time we met, aside from being a nice guy, I wasn’t much of a catch. Man, she took a chance on me.  As my client count went up, my days driving the big-rig went down. When the client count got to about 400, I retired forever from driving. No more trips to Chicago, Des Moines, Snow Shoe PA, or Jersey City. Chrissy and I began pounding 40% of our gross pay into savings. It would take until I was 70, but working together, we got to a place each of us only dreamed we would be. By living within our means, and keeping lifestyle creep to a minimum, we surpassed our goals.  Chris retired at 64 and helped me during my final three years as a tax preparer. Lucky for me, Federal Wage and Hour never found out that I violated the minimum wage laws by never paying her in the first place. I sold the practice at age 70. I prepared 650 tax returns in my final year.  It’s important to note that during our journey, we did not starve ourselves of food nor fun. We counted 27 trips during our first ten years together. Chris was great at finding great deals to various destinations in the Caribbean, and we turned several of her business trips into mini vacations as well. It’s important to prepare for the future, but have some fun along the way as well.  I hope this piece inspires someone who is still on the road, dealing with similar obstacles, and wondering if there was a way around them. For 30 years, Dan Smith was a driver-salesman and local union representative, before building a successful income-tax practice in Toledo, Ohio. He retired in 2022. Dan has two beautiful daughters, two loving sons-in-law and seven grandchildren. He and Chris, the love of his life, have been together for two great decades and counting. Check out Dan's earlier articles.
Read more »

Hidden Surcharge

DAN SMITH  |  Apr 21, 2026

"Ormode, yes, a $900K RMD is certainly a first world problem."
- DAN SMITH
Read more »

Driving Prices

ArticleAdam M. Grossman  |  Apr 25, 2026

IN 2020, ELECTRIC car maker Lucid Motors brought in revenue of $4 million. Five years later, sales had risen impressively, to more than $1 billion. In 2025 alone, sales grew 68%. That sounds like a success story, and through that lens, it is. And yet, over that same period, the company’s stock dropped more than 89%. What happened? A better question is: What didn’t happen? Despite growing sales, the company has struggled to turn a profit. On sales of $1.3 billion last year, Lucid posted a loss of $3.8 billion. It’s experienced production problems and management turnover. It’s seen its competitors cut prices. As a result, it’s been forced to issue new shares, thus diluting the value of existing investors’ holdings, just to keep the lights on. In fairness to Lucid, the road to success is rarely a straight line. Arizona State University professor Hendrik Bessembinder studies the performance of public companies, and the results are sobering. In new research, he found that, over the past 100 years, the median return among stocks trading on U.S. exchanges was negative 6.9%. Only a minority of stocks, in other words, made any money at all. Why are these results so dismal? Four factors stand out. The first is emotion—specifically, investors’ emotions. After Lucid went public in late-2020, its stock began rising quickly, and in the early months of 2021, the shares gained nearly 500%. What was driving those gains? Since the company was just starting production, very little can be attributed to the company’s financial results. Instead, it was simply investor excitement around the electric vehicle market and the optimistic view that Lucid would become the next Tesla. But no sooner did the stock rise that it fell again. And in the years since, it’s been an overwhelmingly downward slide for investors. In the last interview he gave before he died in 1976, Benjamin Graham compared the stock market to a seesaw. “The present optimism is going to be overdone and the next pessimism will be overdone.” And that causes stocks to go to extremes. Fifty years later, Graham’s observation seems no less accurate. Indeed, investment manager Cliff Asness has argued that, because of the internet, the impact of emotions on the market is even worse today. Due to what he calls “the less-efficient market hypothesis,” inaccurate information can spread much more quickly today than it did in the past. You may recall the phenomenon in which a group of day traders, led by a YouTube personality who called himself Roaring Kitty, was able to drive up the stock of a nearly-bankrupt company for no rational reason. That couldn’t have happened in the years before social media. Another factor that can drive stock prices is government action, and this also explains part of Lucid’s slide. When the government ended tax credits on electric vehicles last year, that made electric cars much more expensive for consumers. And contrary to intuition, this year’s higher gas prices haven’t done much to entice buyers back to EVs. On the other hand, government action can sometimes be positive. In 2017, for example, Congress voted to cut the corporate tax rate from 35% to 21%, significantly boosting public company profits. Perhaps the most obvious factor that can drive stock prices is competition. This can take a few different forms. Coke and Pepsi, for example, have been battling for more than 100 years, but their relative positions don’t change very much. At this point, neither company is going to go out of business as a result of the other. In his book The Innovator’s Dilemma, the late Clayton Christensen described a much more disruptive form of competition—the sort that upends industries entirely, such as when 19-year-old Bill Gates outsmarted IBM. At the time, IBM was the most dominant company in the computer industry, but over time its position faded. It underestimated how important personal computers would become and didn’t take the market seriously. Years later, it ended up selling off its PC business entirely, and today makes very little hardware. The same sort of thing happened to BlackBerry, to Kodak and to Polaroid, among others. Like IBM, all of these companies had enormous resources. But, according to Christensen, it was their success that became their greatest weakness, because it caused them to underestimate threats and to downplay the likelihood that anything fundamental might ever change. Ken Olson, the founder of Digital Equipment Corporation, a leader in minicomputers in the 1960s and 1970s, famously asserted, “There is no reason anyone would want a computer in their home.” The tricky aspect of the innovator’s dilemma, though, is that it isn’t universal. Consider the early years of the auto industry. Before automobiles gained popularity in the early 1900s, it’s estimated that there were 4,000 companies in the horse-and-carriage business. The right move for any of these companies would have been to try to transition into automobile manufacturing. Carriage makers, especially, had relevant skills and were best positioned to make this leap. But they adopted a collective mindset that the automobile wasn’t going to succeed, dismissing cars as “devil wagons.” But one of these carriage makers, Studebaker, did correctly assess where things were going and successfully transitioned to making automobiles. The rest failed, faded away or switched into other businesses. Companies, in other words, can be very good at one thing but lose their footing in the face of change. That’s a key factor behind Bessembinder’s findings. A final factor that can cause companies to stumble: random events. Consider, for example, what occurred in Thailand in 2011. Heavy rainfall resulted in flooding that caused large industrial areas to become submerged. This included the factories of hard drive manufacturers Western Digital and Seagate, causing their stocks to drop 35% and 45%, respectively. Both recovered, but this is an example of how even good companies can run into bad luck. Years of research has shown how difficult it is to predict stock prices. Bessembinder’s new work, however, makes an additional important point, which is that, for all of the reasons discussed here, and likely others, stocks face many more roads to potential demise than to success. Thus, to succeed at stock-picking doesn’t just require research and hard work. It requires an almost prophetic ability to identify the tiny handful of stocks that will turn into homeruns. But since the odds are so steeply against success, that’s a key reason I see it as so important to stick with the simpler and less risky alternative of index funds.   Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
Read more »

Free Newsletter

Get Educated

Manifesto

Apr 26, 2026

NO. 26: WE SHOULD strive to spend our days as we wish—by using our dollars to escape today’s chores that we dislike, while also saving for the ultimate prize: full financial freedom.

Truths

Apr 28, 2026

NO. 104: SHIFTS IN investor sentiment—as reflected in the stock market’s rising and falling price-earnings ratio—become less important as our time horizon lengthens. Instead, for investors who hold diversified stock portfolios for decades, what matters is the stock market's starting dividend yield and subsequent growth in earnings per share.

think

Apr 27, 2026

HUMAN CAPITAL. If we’re early in our career, our most valuable asset is usually our human capital—our ability to pull in a paycheck. That paycheck allows us to service debt, provides the savings needed for retirement and frees us up to invest in stocks. But as retirement approaches, we should aim to pay off all debt and shift maybe half our portfolio into bonds.

humans

Apr 26, 2026

NO. 32: WE REVISE our memories to make ourselves look better. Suppose we believe we’re smart at managing money, but then we panic during a market decline. The result can be the uneasy feeling known as “cognitive dissonance.” To escape our discomfort, we might revise our memory—and decide we stood our ground and perhaps even bought more.

Money Guide

Start Here
Planner
Portfolio
Retire
Invest
Humans

Manifesto

Apr 26, 2026

NO. 26: WE SHOULD strive to spend our days as we wish—by using our dollars to escape today’s chores that we dislike, while also saving for the ultimate prize: full financial freedom.

Spotlight: Retirement

New 2025 Tax Deductions

Bogdan Sheremeta   |  Sep 20, 2025

THE IRS JUST released a new form called Schedule 1-A, which includes all the new tax bill deductions.
I wanted to quickly go through some of it, so that you are more aware of the new potential savings opportunities.
I’ve previously discussed some portions of the bill, but this is the first time we have a peek of the new lines.
All of these deductions are in addition to the standard deduction or itemized deduction.

Read more »

Tax Smart Retirement

Adam M. Grossman   |  Mar 7, 2026

A POPULAR JOKE about retirement is that it can be hard work. That’s because financial planning is like a jigsaw puzzle, and retirement often means rearranging the pieces.
In the past, I’ve discussed two key pieces of that puzzle: how to determine a sustainable portfolio withdrawal rate and how to decide on an effective asset allocation. But there’s one more piece of the puzzle to contend with: taxes. Especially if you’re planning to retire on the earlier side,

Read more »

Love, Hate and My 401(k)

Michael1   |  Dec 6, 2024

I want to ditch my great 401(k).
When BrightScope rankings of 401(k) plans were available to individual investors, mine ranked very highly. By most measures in this Morningstar article on whether to keep your 401(k) in retirement, mine merits keeping. Besides these factors, I have a few of my own reasons that I like it.
First, I like its stable value fund, which is managed to keep a $1 per share price (not guaranteed) but with a higher return than any money market I’ve seen.

Read more »

The Fear of Letting Go

kt2062   |  Jun 22, 2025

Retirement sounded so great to me a few years ago. Now as I face the reality of it, I find myself having panic attacks. “No more income? I will end up a homeless bag lady on Main Street….” I find myself thinking.
All irrational thoughts since I will have a COLA pension supplemented by my savings and will receive social security in 18 months.  These revenues will come close to matching my current net pay when I start social security.

Read more »

When the Spreadsheet Gets Real

Mark Gardner   |  Jun 4, 2025

I’m 58 and my wife is 56. We’ve been planning our retirement with care and intention for years—no debt, solid retirement savings, a well-diversified portfolio, and a liability-matching plan (LMP) that covers us until Medicare kicks in. We’ve talked through our priorities, run the numbers, and built our plan together. The core approach to our plan was heavily influenced by Bill Bernstein and Wade Pfau’s writing and we are content with a good funded ratio.
One thing we agreed on early: when one of us loses or leaves work,

Read more »

You Might Be Ready to Retire…Who Would You Rather Be?

stelea99   |  Jun 10, 2025

Dear HD readers:  We had so much fun with the original version of this post, that I thought it might be fun to add a 3rd possible route to funding retirement at $138,000/yr.   Of course, there is no reality in this, no real personal info, it is just a scenario.  And, most important, any legal route that get you to your desired retirement income is the right one for you.
 
One of my friends is hitting 73 in August and we were discussing his need to do an RMD this year. 

Read more »

Spotlight: Marsh

Happiness at Home

Edmund Marsh   |  Oct 6, 2022

I HAVE READ THAT spending on experiences brings more happiness than spending on things. But what about the experience of buying? Can that make us happy? I’ve lived in my small community for 21 years. Over that time, my regular buying habits have led me to discover people who provide me with excellent service. They also supply me with a generous measure of genuine satisfaction. Every third Friday, I sit and listen to a great raconteur as he cuts my hair. Rick’s stories are sometimes touching, sometimes indignant, but always humorous. His talk is voluminous and rapid. I have to slide in my stories edgewise. Rick gets a raise as my income goes up, and I don’t mind paying it. I leave with a happy heart as well as a haircut. I own several gasoline-powered tools, which means I frequent a shop run by Javin, a master of small engine repair.  We always take a moment to catch up. He updates me on his father, who operated the shop before an illness forced him into early retirement. We worry about the weather, which affects his business and my garden. I could save money by doing some repairs and maintenance myself, and sometimes I do, but I don’t mind giving work to Javin. I find pleasure in doing my part to keep his business open. My heart sank the day last year that Arnie told me he was closing his car repair shop to take a teaching job at the local technical college. For years, he had helped me milk more miles out of my cars. I was happy for him, though, because I knew dependable help was scarce and he was overworked. Arnie didn’t leave me stranded. He recommended a mechanic friend who has since proven his worth. I’m hopeful that…
Read more »

Adios, America

Edmund Marsh   |  Feb 9, 2023

OVER EIGHT MILLION Americans have said “so long” to the U.S., heading overseas to work or retire. These expats—short for expatriates—most likely have eight million different reasons to leave our shores for life in another country. My wife’s cousin Chuck and her brother John are among them. John had his eye on living abroad when he took his first engineering job with Litton Aero Products, where he helped support aviation customers in the Middle East. Headquartered first in Tehran, then London and eventually France, his work and a penchant for travel took him to destinations throughout Europe, Asia and Africa. John was always on the lookout for exotic treasures to bring home. His best discovery was a gem of a woman named Rosemarie. Rosemarie was a New Zealander living in France and working as an English teacher. She soon consented to marry John, and together they started a family in the U.S. Within a few years, however, they were on a plane with four young children bound for New Zealand. Chuck was also looking to leave the U.S. for a life elsewhere. With the family wanderlust pulling him toward a job overseas, he packed up his occupational therapy skills and headed for Saudi Arabia. Chuck’s love of travel has taken him to 66 countries and fostered friendships all over the globe. After retirement, moving to Panama was hardly a daunting decision. He relished the chance to immerse himself in a new culture and explore that part of the planet. Chuck says Panama is a global crossroads with a long history of welcoming visitors and immigrants alike. Eight years ago, he and his wife Jeanne moved to the mountain town of Boquete. Even with a busy travel schedule that takes them all over Central America and Mexico, they’ve managed to settle…
Read more »

On My Own Time

Edmund Marsh   |  Feb 5, 2025

WHO OWNS TIME? WE speak of “my time” and “your time” as if it were a possession we hold in our hands. But we can’t stash it away for future use, nor can we trade or transfer our allotment to another person. Is it truly ours? For the moment, let’s say that it is. Appraising time. How much do we value our time? Some days, we treat it as a precious commodity. On those days, if we’re in a generous mood, we’ll share minutes with a friend or donate them to a cause that stirs our passions. Alternatively, we might be time-stingy. We value our seconds more than people. We zealously hoard our hours, begrudging the moments others manage to wheedle away from us. Either way, it’s obvious that time is a treasure. But we can also be careless with time. We may mindlessly go about our workday, going through the motions until quitting time arrives. Once home, we aimlessly click on internet articles or flip through television channels, lingering until the clock or exhaustion announces our bedtime. Instead of managing time well, we just manage to make it to the ends of the weeks that become months that accumulate into years. What does it matter? If I’m indeed master of my time, who’s to say I can’t treat it as I please? Maybe no one. But consider a couple of other perspectives. Some religions, including my own Christianity, believe time is part of creation. God is eternal, and therefore outside of time, but all else is subject to the ravages of time’s relentless passage. It’s a gift to be used wisely, like all resources entrusted to us. Though I may fall short of that mark, my failure doesn’t relieve me of my responsibility. Even if we don’t hold this view,…
Read more »

Doin’ the Charleston

Edmund Marsh   |  Sep 1, 2023

I WROTE RECENTLY about my wife’s lifelong love of traveling, and of my resolve to get in step with her as she resumes her rambles. To that end, earlier this summer, I drove our family to Charleston, South Carolina, to attend the retirement ceremony for my cousin Chris, and to see a bit of the city, to boot. As our departure time approached, we learned that the original schedule for retirement day had been altered. Chris advised my wife that he understood if we wanted to change our plans. She assured him she wouldn't miss an event that got her stay-at-home family—my daughter and me—to travel somewhere, anywhere, and especially to Charleston. She’s enamored of the city, but for years has been unsuccessful at enticing me to accompany her there for a tour. Chris’s big day was just the lure to get me out of the house and into the car. After a morning drive from our home near Atlanta, we began our Charleston excursion with a tour of the U.S.S. Yorktown, a World War II-era aircraft carrier resting permanently at Patriots Point. We explored the ship from engine room to captain’s chair, including a stroll on the flight deck to investigate the variety of aircraft on display. Along the way, we tried to imagine the sailors and naval aviators at work in dangerous locations far removed from the quiet of Charleston Harbor. The next day was devoted to helping Chris and his friend Matt say so long to the United States Air Force in a dual retirement ceremony. Their lives have been intertwined for years. They graduated college together and were commissioned as Air Force officers on the same day. After spending much of their 22 years of active and reserve service together, they were now sharing their retirement…
Read more »

Take a Seat

Edmund Marsh   |  Feb 26, 2025

MILESTONES MARK the growth of a child as she moves from infancy through school age. In similar fashion, we adults tend to measure our life’s progress with “firsts” or other significant events. Perhaps we remember the feeling of maturity that came with our first kiss or our first job. Milestones help us attach meaning to the course of a life that sometimes seems beyond our control. Financial milestones often command special significance, like my first “real” job at age 15. My older brother got me hired by a company building a bank. My parents surprised me with unusual lenience by letting me drive myself in a borrowed vehicle, though I was still a few months from having an unrestricted license. On my first day, my initial task was enlarging the vent hole for the concrete vault with a hammer and chisel. Next came breaking up a sidewalk with a sledge hammer. I thought I was lucky to be called away from that work, but instead found myself hauling heavy landscaping timbers in the rain at the boss’s friend’s beach house. I got back to the jobsite wet and covered with sand. When I pointed out to the foreman that I’d had no lunch, he begrudgingly let me leave with the admonition to “hurry back.” Instead, I hurried to my truck, hurried home and never looked back. I don’t say that with pride, but I have no regrets. Despite my rough start, followed by a few tough years, my financial journey eventually smoothed out. The milestones began passing by with some regularity for my wife and me. Whether frugal by nature or nurture, our aggressive saving—and lack of troubles—left ample money from each paycheck to ladle into growing retirement accounts. I kept close tabs on the burgeoning balances, excited to see…
Read more »

Reverse Hospitality

Edmund Marsh   |  Oct 12, 2022

IN THE SOUTH, it’s common for a restaurant server or store clerk to refer to me as “sweetie” or “honey.” I’ll often respond by asking, “How did you know my name is Sweetie?” This will usually bring a smile to the face of even a harried worker. Our friendly banter is the worker practicing some of the charm and hospitality that the South is famous for, and me returning the courtesy with “reverse hospitality.” A commercial transaction doesn’t involve just money. Two people are face to face, one looking to serve and the other to be served. There are exceptions, sometimes notable, but most of the time the servers are polite and friendly. They do their best to provide what I want to buy and give me a smile while doing it. I think I have a responsibility to return the favor. Telephone transactions are a little more challenging, but I still try to make it personal with a friendly comment or question like “how’s the weather where you are?” or “do I hear chickens in the backyard?” Am I always patient and diplomatic? No. Sometimes, I’m preoccupied with my own thoughts and needs. I view the person in front of me or on the phone as an obstacle between me and what I want, and I can be brusque. My wife can attest to that. I know, however, that I should give the other person the same courtesy and respect that I want to receive. What does reverse hospitality get me? I can’t say for certain that it puts more money in my pocket. But I also can’t claim that I’m being purely altruistic. If I do plan to ask for a better deal or special service, I’d rather ask it of a new friend. Maybe I can charm…
Read more »
FREE NEWSLETTER
How To
Follow Us