FREE NEWSLETTER

Your happiness hinges on what you focus on. So why focus on your neighbor’s greater wealth, instead of your own good fortune?

Just Like Warren?

THE NOTED PHYSICIST Lord Kelvin reportedly declared in 1900, “There is nothing new to be discovered in physics now.” In the annals of inaccurate proclamations, this one stands out. Just a few years later, Einstein published his Theory of Relativity and, in the following years, proceeded to upend many of the scientific world’s longest standing and most deeply held beliefs.
The world of personal finance witnessed a similarly inaccurate prediction 76 years later. When the newly formed Vanguard Group launched its first index fund,

Read more »

Newsletter No. 32

WHAT WILL IT TAKE to achieve a better financial life? It all starts with asking the right questions, as I explain in HumbleDollar’s latest newsletter. Some examples: If money were no object, what would you change about your life? If you were out of work, how long could you cover expenses before having to take drastic financial steps? In late 2008 and early 2009, did you buy stocks, sell or sit tight?
In all,

Read more »

Archie Is Scum

A FINANCIAL PLANNER called Archie Nickel is stealing entire articles from HumbleDollar and posting them to his own site—without permission. In the online world, it’s fine to link to interesting articles elsewhere on the web. But it’s a no-no to swipe entire articles. I’ve endeavored to contact the nefarious Nickel, by posting comments on his site and via Twitter, but he’s ignored my requests to stop purloining this site’s blogs and and to remove the blogs he’s previously stolen.

Read more »

Latest Blogs

Just Like Warren?

THE NOTED PHYSICIST Lord Kelvin reportedly declared in 1900, “There is nothing new to be discovered in physics now.” In the annals of inaccurate proclamations, this one stands out. Just a few years later, Einstein published his Theory of Relativity and, in the following years, proceeded to upend many of the scientific world’s longest standing and most deeply held beliefs.
The world of personal finance witnessed a similarly inaccurate prediction 76 years later. When the newly formed Vanguard Group launched its first index fund,

Read more »

Newsletter No. 32

WHAT WILL IT TAKE to achieve a better financial life? It all starts with asking the right questions, as I explain in HumbleDollar’s latest newsletter. Some examples: If money were no object, what would you change about your life? If you were out of work, how long could you cover expenses before having to take drastic financial steps? In late 2008 and early 2009, did you buy stocks, sell or sit tight?
In all,

Read more »

Archie Is Scum

A FINANCIAL PLANNER called Archie Nickel is stealing entire articles from HumbleDollar and posting them to his own site—without permission. In the online world, it’s fine to link to interesting articles elsewhere on the web. But it’s a no-no to swipe entire articles. I’ve endeavored to contact the nefarious Nickel, by posting comments on his site and via Twitter, but he’s ignored my requests to stop purloining this site’s blogs and and to remove the blogs he’s previously stolen.

Read more »

Blog archive

Numbers

WHAT KEEPS AMERICANS up at night? According to a Bankrate survey, 69% of us report losing sleep because of our worries. The top reason is fretting over relationships, followed by money, work and health.

Truths

NO. 79: PAYING ZERO TAXES is a terrible waste. If you lose your job, or you just retired and aren’t yet tapping your retirement accounts, you may have a year with little or no taxable income. To take advantage of your low tax bracket, consider selling winning taxable-account investments or converting part of your IRA to a Roth.

Truths

NO. 79: PAYING ZERO TAXES is a terrible waste. If you lose your job, or you just retired and aren’t yet tapping your retirement accounts, you may have a year with little or no taxable income. To take advantage of your low tax bracket, consider selling winning taxable-account investments or converting part of your IRA to a Roth.

Act

SAVE SOME FOR YOUR FUTURE SELF. Looking to lose weight? At restaurants, transfer half your serving to a second plate and ask the waiter to box it up. If the food will make good leftovers, it’s easy to do, because you know you’ll have a treat tomorrow. Want to save more? Think about it the same way—and set aside some of today’s spending money for tomorrow.

Think

INTRINSIC VALUE. It’s easy to get caught up in the stock market’s wild price swings. Feeling unnerved? Never forget that behind those price swings are companies of great value. While you can’t put a precise figure on their intrinsic value, you can get a sense by examining the profits they earn, the dividends they pay and the value of the assets they own.

Home Call to Action

Free Newsletter

My Favorite Questions

YOU’RE UNLIKELY to get the right answers—unless you ask the right questions.
That’s especially true when it comes to managing money. We have answers thrust in our faces all the time, as marketers and salespeople exhort us to buy this mutual fund, that car, this stock, that home and this insurance policy.
But are these really what we want or need? It’s hard to know unless we ask the right questions. There’s ample evidence that many folks end up with financial products they don’t need and spend money in ways that bring little or no happiness.

Read More »
Jonathan Clements

About Jonathan

Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His new book is now available: From Here to Financial Happiness.

Money Guide

Start Here

The 80% Rule

ONE RULE OF THUMB suggests that, to retire in comfort, you need 80% of your preretirement income. Why the 20% drop? You are no longer saving 10% or so every year toward retirement and you’re no longer making an employee’s 7.65% payroll-tax contribution to Social Security and Medicare. In addition, you won’t have to buy work clothes or pay commuting costs. Your income tax bill should also go down, in part because a portion of your retirement income will likely come from Social Security benefits, which are always at least partly tax-free. It turns out, however, that many retirees are living on far less than 80% of their final salary. For instance, a 2014 T. Rowe Price Group survey of relatively affluent recent retirees found that these retirees were, on average, living on 66% of their preretirement income—and they reported being quite content. This isn’t a huge surprise, for three reasons. First, many folks save much more than 10% in the run-up to retirement, so they’re already used to living on a lot less than 80% of their income. Second, many homeowners aim to get their mortgage paid off by retirement, which eliminates a major expense. Finally, by retirement, the kids are usually through college and in the workforce, which also greatly reduces the parents' spending. Add it all up, and you may find you can comfortably retire on 50% or 60% of your final salary. Next: Estimating Expenses  Previous: Adjusting Your Portfolio
Read more »

Archive

Fake News

A CLIENT WAS IN OUR OFFICES the other day, grilling one of my fellow financial advisors about some investments in his diversified retirement portfolio. He just couldn’t understand why we’d keep certain securities that hadn’t recently performed well. He kept citing “stuff I read” and “all the experts” as the basis for his concerns. I wasn’t part of the conversation. But here are three points I would have made: 1. Those experts don’t know a thing about you or your situation. They don’t know your age, health, marital status or personality quirks. They don’t know where you live or how much your house cost. They don’t know how much you spend on groceries or hobbies, or that you were forced into early retirement by an ungrateful employer. They know none of this. Nada. 2. Virtually every expert you encounter online or on television is being paid for those opinions. If they’re discussing gold, real estate or master limited partnerships, you can be certain that their wallet or purse stands to gain from your interest in any of them. If they are recommending stocks, bonds or unit trusts, it is a sure thing that those products generate profits for them or their company. If they are discussing annuities, well, just run away as fast as you can. 3. Don’t be impressed by their purported qualifications. Not one of those so-called experts is any more expert than my colleagues and me. They’ve been in The Wall Street Journal? I’ve been in The Wall Street Journal. They’ve written articles for financial and trade industry magazines? I’ve written hundreds. They're on television? I’ve been on television. I may not be right all the time. But I’m just as much an expert as these talking heads—and probably more so. Dan Danford is a Certified Financial Planner and founder of the Family Investment Center in St. Joseph, Mo. His most recent book is Stuck in the Middle.
Read more »

Money Guide

Start Here

The 80% Rule

ONE RULE OF THUMB suggests that, to retire in comfort, you need 80% of your preretirement income. Why the 20% drop? You are no longer saving 10% or so every year toward retirement and you’re no longer making an employee’s 7.65% payroll-tax contribution to Social Security and Medicare. In addition, you won’t have to buy work clothes or pay commuting costs. Your income tax bill should also go down, in part because a portion of your retirement income will likely come from Social Security benefits, which are always at least partly tax-free. It turns out, however, that many retirees are living on far less than 80% of their final salary. For instance, a 2014 T. Rowe Price Group survey of relatively affluent recent retirees found that these retirees were, on average, living on 66% of their preretirement income—and they reported being quite content. This isn’t a huge surprise, for three reasons. First, many folks save much more than 10% in the run-up to retirement, so they’re already used to living on a lot less than 80% of their income. Second, many homeowners aim to get their mortgage paid off by retirement, which eliminates a major expense. Finally, by retirement, the kids are usually through college and in the workforce, which also greatly reduces the parents' spending. Add it all up, and you may find you can comfortably retire on 50% or 60% of your final salary. Next: Estimating Expenses  Previous: Adjusting Your Portfolio
Read more »
Home Call to Action
Jonathan Clements

About Jonathan

Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His new book is now available: From Here to Financial Happiness.

Free Newsletter

My Favorite Questions

YOU’RE UNLIKELY to get the right answers—unless you ask the right questions.
That’s especially true when it comes to managing money. We have answers thrust in our faces all the time, as marketers and salespeople exhort us to buy this mutual fund, that car, this stock, that home and this insurance policy.
But are these really what we want or need? It’s hard to know unless we ask the right questions. There’s ample evidence that many folks end up with financial products they don’t need and spend money in ways that bring little or no happiness.

Read More »

Archive

Fake News

A CLIENT WAS IN OUR OFFICES the other day, grilling one of my fellow financial advisors about some investments in his diversified retirement portfolio. He just couldn’t understand why we’d keep certain securities that hadn’t recently performed well. He kept citing “stuff I read” and “all the experts” as the basis for his concerns. I wasn’t part of the conversation. But here are three points I would have made: 1. Those experts don’t know a thing about you or your situation. They don’t know your age, health, marital status or personality quirks. They don’t know where you live or how much your house cost. They don’t know how much you spend on groceries or hobbies, or that you were forced into early retirement by an ungrateful employer. They know none of this. Nada. 2. Virtually every expert you encounter online or on television is being paid for those opinions. If they’re discussing gold, real estate or master limited partnerships, you can be certain that their wallet or purse stands to gain from your interest in any of them. If they are recommending stocks, bonds or unit trusts, it is a sure thing that those products generate profits for them or their company. If they are discussing annuities, well, just run away as fast as you can. 3. Don’t be impressed by their purported qualifications. Not one of those so-called experts is any more expert than my colleagues and me. They’ve been in The Wall Street Journal? I’ve been in The Wall Street Journal. They’ve written articles for financial and trade industry magazines? I’ve written hundreds. They're on television? I’ve been on television. I may not be right all the time. But I’m just as much an expert as these talking heads—and probably more so. Dan Danford is a Certified Financial Planner and founder of the Family Investment Center in St. Joseph, Mo. His most recent book is Stuck in the Middle.
Read more »