Home - HumbleDollar

How much to provide a college student monthly?

Chris | Apr 25, 2026

"Congratulations Chris. My daughter our youngest is about to embark on this very journey. She 17. She has 3/4 tuition scholarship coupled with a 529 plan. Those will cover books, tuition and a meal plan. She has her debit card to her account that we have been putting $100 per month into. We will likely add another $100 to that per month. She plans on working some when she gets settled. She has a car but she not taking it to school the first year. We will adjust as needed. We are not going to overthink this as there is nothing on fire and low risk to our financial situation. She's the third and last of my brood, so we have been there before although her two older brothers stayed home and commuted to school with their cars."

- Mike Xavier

Why I use a Donor-Advised Fund

David S | Feb 21, 2026

"This is the second comment in a while that’s caused me to channel John Yeigh’s old article. Do some of each and think about something else. You can only be half wrong :-) https://humbledollar.com/?s=Half+wrong+"

- Michael1

Tax Free Income Trap, Dealing With MAGI

DAN SMITH | Apr 21, 2026

"I’m starting to look at future RMDs the same way. There was recently some discussion in another thread about very aggressive Roth conversions to reduce future RMDs/taxes. I did some math and it works, but the math is based on continued strong market performance. Of course we hope and expect this will be the case, but one never knows. So we’ll do some converting, but not too aggressively, and not high enough to cause higher MAGI to unduly impact things in the near term. If things turn south, we’ll be glad to have the money we would have spent on taxes to convert. If markets continue to do wonderfully, we’ll pay the tax and count our blessings."

- Michael1

Something to Think About

David Lancaster | Mar 24, 2026

"It seems like you’re trying to time the market on your conversion? My understanding is that you have to be right on both sides of that trade. Even if it’s a Roth conversion."

- William Housley

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.

My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
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.
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.
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.
I was determined not to let my occupation as a beer truck driver dictate my future job prospects.

Where did I want to be?

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.
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.
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.
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.

How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

DrLefty | Apr 22, 2026

"Thank you! Good luck with your search process, as well. Obviously our situations aren’t the same, but the main thing I can say about all of this is that we took our time and waited for the right opportunity. We weren’t going to force ourselves into something that wasn’t a good fit, especially since we were basically happy with what we had."

- DrLefty

Investing Fundamentals: A Simple Guide for Beginners

William Housley | Apr 24, 2026

"And I will include the attribution statement you mentioned above."

- Dave Melick

Rethinking the “Right” Time for Social Security

Andrew Clements | Apr 23, 2026

"What I don't understand is your saying the goal is to maximize income when you need it most but then you started taking Soc Sec when you surely didn't need it."

- Randy Dobkin

A Life You Build

Jeff Peck | Apr 19, 2026

"A wonderful life lesson, you get what you work for. I much rather all my children work hard to build their life, than to be gifted. My life has been similar in many respects, and I like the idea of working for it. Keep these important articles coming. I just wish all the 20 year olds could read your article."

- William Dorner

Lonely Island (Correct Edit)

Mark Crothers | Apr 22, 2026

"Very important and wonderful article. I was very lucky to have parents who taught me well, that the secret sauce to a LONG live is that social connection. Sure you have to blessed with good health too. I live in Independent Living with about 350 people who have rich social lives, and feel so privileged. Thanks for sharing such important life information."

- William Dorner

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.

Financial Planning

Concerned | Apr 11, 2026

"There are advice only advisors which are mentioned elsewhere in this thread who provide planning and advice and you execute the plan and trades. You can find them at adviceonlynetwork/com. There are flat fee advisors who typically are small botique outfits and focus on planning and passive investment management aligned to your needs and plan. They frequently do detailed cash flow and tax planning amongst other services. We have had a flat fee advisor for 9 years and feel it is well worth it for risk management, peace of mind, addressing blind spots, minimizing mistakes and planning to meet goals."

- Rob Jennings

How much to provide a college student monthly?

Chris | Apr 25, 2026

- Mike Xavier

Why I use a Donor-Advised Fund

David S | Feb 21, 2026

- Michael1

Tax Free Income Trap, Dealing With MAGI

DAN SMITH | Apr 21, 2026

- Michael1

Something to Think About

David Lancaster | Mar 24, 2026

"It seems like you’re trying to time the market on your conversion? My understanding is that you have to be right on both sides of that trade. Even if it’s a Roth conversion."

- William Housley

Around the Obstacles

ArticleDan Smith | Apr 25, 2026

My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
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.
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.
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.
I was determined not to let my occupation as a beer truck driver dictate my future job prospects.

Where did I want to be?

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.
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.
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.
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?

How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

DrLefty | Apr 22, 2026

- DrLefty

Investing Fundamentals: A Simple Guide for Beginners

William Housley | Apr 24, 2026

"And I will include the attribution statement you mentioned above."

- Dave Melick

Rethinking the “Right” Time for Social Security

Andrew Clements | Apr 23, 2026

"What I don't understand is your saying the goal is to maximize income when you need it most but then you started taking Soc Sec when you surely didn't need it."

- Randy Dobkin

A Life You Build

Jeff Peck | Apr 19, 2026

- William Dorner

Driving Prices

ArticleAdam M. Grossman | Apr 25, 2026

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.

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.

think

Apr 25, 2026

TIME DIVERSIFICATION. Investors with long time horizons are encouraged to buy stocks. Yet such “time diversification” is controversial: While most of us assume the stock market is mean reverting—meaning good times follow bad—academics have argued that, if stock returns are random, healthy returns aren’t a sure thing, no matter how long we hang on.

act

Apr 25, 2026

GET A FREE CREDIT score. You can learn your score at websites such as Credit Karma, Credit Sesame, NerdWallet and WalletHub. Credit scores are also available from financial firms like Capital One and Chase, even if you aren’t currently one of their customers. Not all these sites will tell you your FICO score—the most widely used scoring system.

Money Guide

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

Economic Trends

Adam M. Grossman | Mar 14, 2026

LAST WEEK THE government released its monthly employment figures for February. The results weren’t great. Payrolls declined, and unemployment ticked up. These numbers square with other downbeat data, including a recent uptick in bankruptcy filings.
Another worry: Oil prices have been rising, a result of the conflict in the Middle East. That’s a concern because it could lead to a reacceleration of inflation. It could also dampen consumer spending because higher gas prices act like a tax on consumers,

A Nuanced View of FIRE

mytimetotravel | Jun 16, 2025

Well, mostly FI, but some RE. (FIRE standing for Financial Independence, Retire Early). Christine Benz from Morningstar recently attended a CampFI event in Spain, and wrote about her experience here.
She comments that “A lot of people have a caricatured perception of the FI community. They assume that everyone is trying to live on $10 a day in order to hang it up at age 35.” While she met some young people, she met older people as well.

Roth Hidden Benefits

Bogdan Sheremeta | Oct 25, 2025

WHEN MOST PEOPLE think of Roth IRAs or Roth 401(k)s, they just think “tax-free withdrawals.” But that’s only part of the story.
Roth accounts can protect you from financial traps that catch many retirees off guard. Here are five key advantages to keep in mind:

1. Tax Rate Protection
One thing we can’t control is future tax rates.
Did you know that in the 1980s, the highest federal tax rate was 50%?

The current state of Social Security and something to consider in your planning

R Quinn | May 21, 2025

My view is that nothing will be done to fix the funding of Social Security through 2028 thus leaving people with concern for their future and to ponder rumors and misinformation. The latest report from the Trustees that should have been released by now is not available yet, but here is a summary from the last in 2024.
My opinion is to be conservative when planning your retirement in the next few years, and use 80% of your current projected Social Security benefit.

What workers and retirees say about their quest for a comfortable, desired lifestyle in retirement

R Quinn | Jan 21, 2025

The 34th Annual Retirement Confidence Survey (RCS) from the Employee Benefit Research Institute provides interesting insight into many of the topics discussed in the Forum. About 1200 of both workers and retirees were surveyed.
I’m always a bit suspicious of surveys, but there aren’t other ways to obtain an insight from individuals that I know of.
It’s a mixed bag.
Planning can be improved in several areas, Social Security is not well understood, while it remains a significant source of income.

Before You Quit

Jonathan Clements | Oct 26, 2024

I MAY NOT BE THE best source of retirement advice. After all, I’ve called myself semi-retired for a decade and yet, faced with a grim medical diagnosis, I continue to work far too hard. Moreover, even if I opt to fully retire—which is doubtful—cancer will likely ensure my retirement will be all too brief.
On the other hand, I do run a website devoted to retirement issues, and that means I spend a lot of time reading and thinking about the topic.

Dealing With Tech Changes

stelea99 | Nov 4, 2024

Gosh, is it just me? Am I the only one who wishes that the pace of tech “Progress” would just slow down? I mean, I just updated to the latest IOS version, and I just read that there its another one coming soon and I have yet to use a single new feature from the last one. All these tech changes make it harder to deal with life including ones money. Do you have your ID.ME credentials set up yet? Without this or some other new government wide PW scheme, you can’t get into the IRS, the VA or perhaps Treasury Direct. And, what about Passkeys? I haven’t got a clue. I use a PW manager which works on both Win devices and Apple devices. I understand how it works and syncs. Someone told me that these Passkeys are safer and stored in a device keychain. Don’t know what that is either. I don’t allow any browser to retain login info. I’m happy without using passkeys…..whatever they are. My personal info has been stolen many times via big companies failing to protect my data that I trusted them to keep safe. My sons think I am behind the times because I don’t use my phone to control my thermostat and house lights remotely. I don’t have or want a Ring doorbell camera either. I know that I could show my Costco card on my smart phone, but I don’t see that as easier than getting the Costco card out of my wallet. Ditto Apple pay. Most places I shop are not compatible. Some of this tech is good. I like the smartphone link in a car that enables hands-free phone usage. My Apple Watch has been very helpful in dealing with medical issues and tracking some fitness activities. I was…

Would You Rebuild?

stelea99 | Jan 11, 2025

This is a thought exercise. Suppose that you owned a home in Pacific Palisades, or Altadena that was destroyed by one of the wildfires. You have been through a very tough time. The fires are out, and after reporting your loss, you are waiting to hear from the company adjuster. You have a big decision to make…...Will you rebuild? Our little housing area here in the PNW has about 2000 single family homes. The first ones were built in 1976, and the build out was completed 20 years later. Between the start, and today, there has been only one structure totally destroyed by fire. And, I think this is really the norm with modern building codes. There have been a number of other fires but none with 6 digit damage amounts. The 2200SF home that was destroyed was owned by an elderly man and he elected not to rebuild. His homeowner’s insurance paid to have the debris removed, and he sold the lot to a builder. Our HO association had the plans for the home and the builder was able to rebuild using those plans with only minor updates for changes in the building code. The whole process took about 9 months. The original owner settled his claim with his insurance company and received the Actual Cash Value of the structure, plus his additional living expenses up to the time of the sale of the lot. You cannot collect the cost to rebuild unless you actually do so. ACV is defined in most policies as the Replacement Cost of the structure using “materials of like kind and quality” less depreciation. The home had been built in 1978 and the fire occurred in late 2009. I don’t know how much depreciation was deducted; perhaps 20%. Let us think for a minute…

Mutual Funds Vs. ETFs Which do you prefer and Why?

stelea99 | Oct 23, 2025

I noticed in one of the responses to a recent article that someone expressed some concern about investing in ETFs as opposed to Mutual Funds. I thought if might be helpful to talk about this topic. To help open the discussion here is a link to FINRA’s page on the topic: https://www.finra.org/investors/insights/etf-vs-mutual-fund Just one more advantage not mentioned in that summary, is that gifting mutual fund shares is hard to do, whereas gifting ETFs is relatively easy. To gift appreciated ETFs to my grandchildren (over 18), I have just had them open an account at Schwab and then send me the account number. Schwab has a form on line (you can also print) which you can complete and submit and presto in a day or two the shares show up in their account. I can also specific which lots are involved in the gift…With mutual funds, you might be looking at a trip to the bank for a signature guarantee for a substantial gift. If you like ETFs, Why? If you worry about ETFs Why?

Remembering 9/11

stelea99 | Sep 11, 2025

Twenty-four years ago today, I was still confused about my routine since retiring the prior month. My spouse had the tv on she and called to me to come to the family room to see coverage of the 1st tower on fire in New York. I was really aghast. The stock market had cratered, and looking at the video, I knew that the building would ultimately collapse. Who could know about the profound impact this event would have on our society. It wasn’t just the loss of life and damages to the City of New York, it was the feeling of not being safe any more. I remember getting ready to go for a walk and after opening our garage door stepping out to see my neighbor Don leaning against his car. He looked carefree and I then asked him if he had heard the news. He had not, and didn’t believe me, until he went into his house and turned on his tv. He came back out in a few minutes very shook up. Until he passed in 2014, every year on 9/11 when he saw me he would remember that day again. What were you doing on 9/11 when you heard? How did you feel? What impact did that event have on your life?

24-Hour Trading

stelea99 | Oct 24, 2025

There are concepts in our lives that trouble me. One of them is our inability to really establish a price (value) for anything. I am already getting a headache writing about this. We have arrived at a time when the price of many things has become dynamic. And, I am not thinking about inflation now, although that increases the challenge. From movie tickets to airline seats, the price of a head of lettuce, the cost of one share of VTI, gasoline, etc. prices float. At least, right now, the NYSE closes each trading day, and for a few minutes, for some securities that are not traded in the after-market, I can get an idea of what the value of my portfolio might be, maybe. With the possibility of 24-hour trading over the near horizon, we face a future in which you can never know, with any precision, your net worth. You can know what it used to be at some time in the past probably at a particular minute in time, but you cannot know what it is worth now. With 24-hour trading, you could go to sleep at ten pm and when the market crashes at 2:39 am you won’t know until the morning. What will mutual fund managers do? With no fixed closing price will they use the price at the time they actually process your order, the price at the time you placed the order, or some arbitrary time/price. Will you be satisfied with a price that is lower than that when you placed your order? I am sure that some readers will say that it doesn’t matter;that you don’t have to have precise values because everyone knows that prices fluctuate, Well, how satisfying can it be when you have been aiming to cross the…

The $20 Billion Problem

stelea99 | Jan 9, 2025

I am sure that we have all been following the current tragedy going on in Los Angeles with the large fires burning there. One of my friends in the insurance industry told me that he had heard from someone in the reinsurance business that the total insured losses from these fires will be more than Twenty Billion Dollars. So, I have been thinking about how a catastrophe of this magnitude could be financed. In insurance, everything depends on the pool of risks that are to be covered by the insurance. Let us consider who should be in this pool. How about using all the homes in the LA Basin? This is a pretty big geographic area including all of LA and Orange counties. There are about 1.39 million homes in the basin. Certainly, this is a large enough number of homes for the law of large numbers to work if we had a loss history which would allow an actuary to set rates. Suppose these homes are currently paying an average annual premium of $2500 each. This would produce a total annual premium of $3,475,000.000. The $2500 premium has been enough in our hypothetical pool to cover all the losses and expenses of running our pool for each of the past 5 years. I think that you can begin to see the nature of this problem. The $20B loss represents 5.45 times the total annual premium the pool has been collecting each year. And, our pool does not have $20B laying around. So, perhaps we could borrow the money using the future premiums as collateral and increase the premiums enough to pay back the loan. We would have to double the premiums, plus add another $800 per home to cover the interest for the each of the…

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