FREE NEWSLETTER

If you buy on a down day, the market could fall further—but at least you know stocks are cheaper than they were.

Not My Priority

SOME YEARS AGO, I had a health scare—and it taught me an important lesson about my relationship with money. My primary care physician wanted me to see a hematologist. “Your white blood cells have been trending lower for the last five years,” he opined. “We need to find out what’s causing it.”
After a number of tests, the hematologist thought I might have a rare blood disease. He said the test results were inconclusive,

Read more »

Insult to Injury

IN DECEMBER, I fell head first onto the bathroom floor. The doctors agreed I had a mild concussion. These typically heal in four-to-six weeks, but it’s now been five months. In March, I dislocated my left knee cap during an afternoon stroll. I was suddenly unable to put any weight on my left leg.
These two unrelated injuries have required me to see an array of medical professionals and undergo multiple tests, including two magnetic resonance imaging (MRI) scans,

Read more »

The Happy Employee

OWNING a business comes with a unique opportunity: the chance to better the lives of your employees. The paycheck you provide helps them pay for their daily expenses and supports the local economy. But there’s an opportunity to do even more: By being thoughtful in how you structure employee benefits, you can ensure they have a more prosperous future, while also helping them lead happier lives today.
Remember, money is simply a tool to help you enjoy your life—and one way to do that is to buy time.

Read more »

Know Doubt

ONE SPRING DAY in 1995, McArthur Wheeler walked into two banks near his Pittsburgh home and robbed them at gunpoint.
His plan had one critical flaw: The disguise he chose didn’t hide his face at all. Instead of the usual stocking cap or hat and sunglasses, Wheeler made an unconventional choice. He applied a coating of lemon juice to his face. His reasoning: Lemon juice could be used to make invisible ink, so Wheeler figured it would have the same effect on his face,

Read more »

Debtor’s Dozen

THE GREAT Recession highlighted the frightening amount of debt—especially mortgage debt—that had been taken on by many American families.
A decade later, the picture is far brighter, with one exception: student loans. Since 2008’s third quarter, education debt has ballooned 144%, according to data just released by the Federal Reserve Bank of New York. But the total of all other debt—mortgages, car loans and credit card balances—is up less than 1% over the same period.

Read more »

Check’s in the Mail

I HAD TO PAY my credit card bill, so I went online and set up a payment from my credit union a week before the bill was due. Why not, it’s an online transfer, right?
Not always.
The payment was due on the 16th. I went online the day before to check my bank account. It said the credit card payment was “sorted” and hadn’t transferred. Same thing the next day and the next.

Read more »

Money Guide

Identity Theft

IDENTITY THEFT occurs when someone uses your name, address, Social Security number and other personal information to borrow money, open a credit card account, take out a loan or commit fraud in some other way. To guard against identity theft, take the usual precautions: Don’t give out financial information to anybody who calls. Ignore emails that seek account information and never click on embedded links. If you think a call or email could be legitimate, phone the financial institution involved using a number you dig up, not one provided by the caller or in the email. Use strong, complicated passwords—and don’t use the same password for every account. Don’t access sensitive information from a public computer. Also regularly review the activity on your credit card statements and in your financial accounts. Become concerned if you receive a bill from a company you don’t recognize. That may mean someone has opened an account in your name. In addition, be concerned if you receive a letter saying a loan application has been rejected. That could indicate someone is trying to use your identity to borrow money. What if you believe you're a victim of identity theft? Contact the companies where accounts have been opened and ask that they be closed. File a report with the Federal Trade Commission at FTCcomplaintAssistant.gov and call the local police to report the crime. Place a fraud alert on your file at the three major credit bureaus. To find out how, go to Equifax.com, Experian.com and TransUnion.com. If you place an initial, 90-day fraud alert in your file at one credit bureau, that bureau should notify the other two bureaus. You might even consider freezing your credit. To learn more about identity theft, check out the Federal Trade Commission’s site at Consumer.FTC.gov. Next: Protecting Yourself Previous: What Won’t Hurt Blogs: An Ode to OwingTax Time Robbery and Keeping It Private
Read more »

Archive

Debt: 10 Questions

GOT DEBT? To get a handle on the situation and figure out whether you’re handling your loans and credit cards properly, here are 10 questions to ask:
  1. What’s your net worth? You might have a home and sizable financial accounts. But what are you worth once you subtract all your debts?
  2. Are you taking the necessary steps to stop thieves from borrowing money using your identity? To protect yourself, regularly check your credit reports for errors and accounts you don’t recognize, and seriously consider freezing your credit or placing a fraud alert with the three major credit bureaus.
  3. What’s your credit score? With so many websites and financial institutions offering free scores, you don’t have to pay anything these days to find out where you stand.
  4. Do you carry a credit card balance? That ranks as one of the most foolish financial mistakes. On top of that, if your balances are large relative to your cards' credit limits, you are likely hurting your credit score.
  5. Are you using a rewards credit card for all daily spending? You should be getting at least 1% cash back or the equivalent in other rewards, such as travel points.
  6. Are your children taking on a reasonable amount of student loans, given their likely career earnings? As a rule, college students should limit their total student debt so that the resulting payments don’t consume more than 10% of their eventual pretax income.
  7. Should you make extra principal payments on your mortgage? Even if you have a home loan with a rock-bottom interest rate and even with the tax deduction, the interest you save by paying down your mortgage is likely greater than the interest you could earn by buying bonds and certificates of deposit in your taxable account.
  8. Do you have a home equity line of credit? The fees involved are typically modest and it could come in handy if you have a financial emergency. You might also use the credit line to pay off higher-cost debt, such as credit card debt, or to finance your next car purchase.
  9. Is your job at risk? If so, look to pay back any 401(k) loans. If you fail to get the loans paid off before you leave your employer, they’ll be considered a retirement account distribution, triggering income taxes and possibly tax penalties.
  10. Are you on track to be debt-free by retirement? Servicing debt in retirement could force you to take larger annual retirement-account withdrawals and to sell winning investments in your taxable account. The resulting higher taxable income could, in turn, trigger taxes on your Social Security benefit and lead to higher premiums for Medicare Part B and D.
This is the ninth article in a series. Click here to find links to the eight earlier blogs. Follow Jonathan on Twitter @ClementsMoney and on Facebook.
Read more »

Numbers

OVER THE PAST five years, mortgage debt outstanding is up 11%, auto loans 45%, credit card debt 29% and student loans 34%, according to the Federal Reserve Bank of New York.

Home Call to Action

Manifesto

NO. 15: WE SHOULD retire our debts before we retire from our job. Paying off debt cuts our living expenses, plus that debt is likely costing us more than we’re earning on our bonds.

Truths

NO. 84: IF YOUR portfolio earns 6% annually and you spend the entire 6% every year, you’ll face a financial reckoning. The spending power of the 6% will shrink with inflation, forcing you to either cut your standard of living—or dip into principal to maintain it. The latter is dangerous, especially early in retirement, because you can quickly eviscerate your nest egg.

Act

HAVE A FAMILY talk about college. How much financial help can you give your children? If they’ll need to shoulder part of the cost, tell them long before they start eyeing colleges. What career do your teenagers plan to pursue? If they’ll likely end up with a modest income, counsel them against colleges that will require hefty student loans.

Think

INSTINCT VS. REFLECTION. Our brain’s instinctual side makes most decisions. That’s usually a plus: Our instincts tell us to jump out of the way, even before we’re fully aware of the speeding car. But our instincts can also lead us to overspend and panic when markets decline. Making money decisions? Hit the pause button, so your brain’s slower-moving, contemplative side can weigh in.

Not My Priority

SOME YEARS AGO, I had a health scare—and it taught me an important lesson about my relationship with money. My primary care physician wanted me to see a hematologist. “Your white blood cells have been trending lower for the last five years,” he opined. “We need to find out what’s causing it.”
After a number of tests, the hematologist thought I might have a rare blood disease. He said the test results were inconclusive,

Read more »

Insult to Injury

IN DECEMBER, I fell head first onto the bathroom floor. The doctors agreed I had a mild concussion. These typically heal in four-to-six weeks, but it’s now been five months. In March, I dislocated my left knee cap during an afternoon stroll. I was suddenly unable to put any weight on my left leg.
These two unrelated injuries have required me to see an array of medical professionals and undergo multiple tests, including two magnetic resonance imaging (MRI) scans,

Read more »

The Happy Employee

OWNING a business comes with a unique opportunity: the chance to better the lives of your employees. The paycheck you provide helps them pay for their daily expenses and supports the local economy. But there’s an opportunity to do even more: By being thoughtful in how you structure employee benefits, you can ensure they have a more prosperous future, while also helping them lead happier lives today.
Remember, money is simply a tool to help you enjoy your life—and one way to do that is to buy time.

Read more »

Know Doubt

ONE SPRING DAY in 1995, McArthur Wheeler walked into two banks near his Pittsburgh home and robbed them at gunpoint.
His plan had one critical flaw: The disguise he chose didn’t hide his face at all. Instead of the usual stocking cap or hat and sunglasses, Wheeler made an unconventional choice. He applied a coating of lemon juice to his face. His reasoning: Lemon juice could be used to make invisible ink, so Wheeler figured it would have the same effect on his face,

Read more »

Debtor’s Dozen

THE GREAT Recession highlighted the frightening amount of debt—especially mortgage debt—that had been taken on by many American families.
A decade later, the picture is far brighter, with one exception: student loans. Since 2008’s third quarter, education debt has ballooned 144%, according to data just released by the Federal Reserve Bank of New York. But the total of all other debt—mortgages, car loans and credit card balances—is up less than 1% over the same period.

Read more »

Check’s in the Mail

I HAD TO PAY my credit card bill, so I went online and set up a payment from my credit union a week before the bill was due. Why not, it’s an online transfer, right?
Not always.
The payment was due on the 16th. I went online the day before to check my bank account. It said the credit card payment was “sorted” and hadn’t transferred. Same thing the next day and the next.

Read more »

Free Newsletter

Numbers

OVER THE PAST five years, mortgage debt outstanding is up 11%, auto loans 45%, credit card debt 29% and student loans 34%, according to the Federal Reserve Bank of New York.

Manifesto

NO. 15: WE SHOULD retire our debts before we retire from our job. Paying off debt cuts our living expenses, plus that debt is likely costing us more than we’re earning on our bonds.

Home Call to Action

Act

HAVE A FAMILY talk about college. How much financial help can you give your children? If they’ll need to shoulder part of the cost, tell them long before they start eyeing colleges. What career do your teenagers plan to pursue? If they’ll likely end up with a modest income, counsel them against colleges that will require hefty student loans.

Truths

NO. 84: IF YOUR portfolio earns 6% annually and you spend the entire 6% every year, you’ll face a financial reckoning. The spending power of the 6% will shrink with inflation, forcing you to either cut your standard of living—or dip into principal to maintain it. The latter is dangerous, especially early in retirement, because you can quickly eviscerate your nest egg.

Think

INSTINCT VS. REFLECTION. Our brain’s instinctual side makes most decisions. That’s usually a plus: Our instincts tell us to jump out of the way, even before we’re fully aware of the speeding car. But our instincts can also lead us to overspend and panic when markets decline. Making money decisions? Hit the pause button, so your brain’s slower-moving, contemplative side can weigh in.

Money Guide

Start Here

Identity Theft

IDENTITY THEFT occurs when someone uses your name, address, Social Security number and other personal information to borrow money, open a credit card account, take out a loan or commit fraud in some other way. To guard against identity theft, take the usual precautions: Don’t give out financial information to anybody who calls. Ignore emails that seek account information and never click on embedded links. If you think a call or email could be legitimate, phone the financial institution involved using a number you dig up, not one provided by the caller or in the email. Use strong, complicated passwords—and don’t use the same password for every account. Don’t access sensitive information from a public computer. Also regularly review the activity on your credit card statements and in your financial accounts. Become concerned if you receive a bill from a company you don’t recognize. That may mean someone has opened an account in your name. In addition, be concerned if you receive a letter saying a loan application has been rejected. That could indicate someone is trying to use your identity to borrow money. What if you believe you're a victim of identity theft? Contact the companies where accounts have been opened and ask that they be closed. File a report with the Federal Trade Commission at FTCcomplaintAssistant.gov and call the local police to report the crime. Place a fraud alert on your file at the three major credit bureaus. To find out how, go to Equifax.com, Experian.com and TransUnion.com. If you place an initial, 90-day fraud alert in your file at one credit bureau, that bureau should notify the other two bureaus. You might even consider freezing your credit. To learn more about identity theft, check out the Federal Trade Commission’s site at Consumer.FTC.gov. Next: Protecting Yourself Previous: What Won’t Hurt Blogs: An Ode to OwingTax Time Robbery and Keeping It Private
Read more »

Archive

Debt: 10 Questions

GOT DEBT? To get a handle on the situation and figure out whether you’re handling your loans and credit cards properly, here are 10 questions to ask:
  1. What’s your net worth? You might have a home and sizable financial accounts. But what are you worth once you subtract all your debts?
  2. Are you taking the necessary steps to stop thieves from borrowing money using your identity? To protect yourself, regularly check your credit reports for errors and accounts you don’t recognize, and seriously consider freezing your credit or placing a fraud alert with the three major credit bureaus.
  3. What’s your credit score? With so many websites and financial institutions offering free scores, you don’t have to pay anything these days to find out where you stand.
  4. Do you carry a credit card balance? That ranks as one of the most foolish financial mistakes. On top of that, if your balances are large relative to your cards' credit limits, you are likely hurting your credit score.
  5. Are you using a rewards credit card for all daily spending? You should be getting at least 1% cash back or the equivalent in other rewards, such as travel points.
  6. Are your children taking on a reasonable amount of student loans, given their likely career earnings? As a rule, college students should limit their total student debt so that the resulting payments don’t consume more than 10% of their eventual pretax income.
  7. Should you make extra principal payments on your mortgage? Even if you have a home loan with a rock-bottom interest rate and even with the tax deduction, the interest you save by paying down your mortgage is likely greater than the interest you could earn by buying bonds and certificates of deposit in your taxable account.
  8. Do you have a home equity line of credit? The fees involved are typically modest and it could come in handy if you have a financial emergency. You might also use the credit line to pay off higher-cost debt, such as credit card debt, or to finance your next car purchase.
  9. Is your job at risk? If so, look to pay back any 401(k) loans. If you fail to get the loans paid off before you leave your employer, they’ll be considered a retirement account distribution, triggering income taxes and possibly tax penalties.
  10. Are you on track to be debt-free by retirement? Servicing debt in retirement could force you to take larger annual retirement-account withdrawals and to sell winning investments in your taxable account. The resulting higher taxable income could, in turn, trigger taxes on your Social Security benefit and lead to higher premiums for Medicare Part B and D.
This is the ninth article in a series. Click here to find links to the eight earlier blogs. Follow Jonathan on Twitter @ClementsMoney and on Facebook.
Read more »