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How to outshine competing investors: Save more, pay lower costs, manage risk better—and think longer term.

Gaming the System

I’M AN AVID player of video and computer games—along with 150 million other Americans. They’ve been a nice occasional escape from the pressures and obligations of the real world for more than 40 years and, now well into my 50s, I’m old enough to see them as merely that.
Youth, on the other hand, is more susceptible to having their behavior influenced, if not shaped, by interactive entertainment. There’s much debate as to whether such games promote dissociative behavior and even violence.

Read more »

Still Learning

FOR THE BETTER part of 40 years, I spent a great deal of time helping thousands of workers prepare for retirement. We ran seminars for workers and spouses on topics like retirement income, insurance, lifestyle, relocation and more. I think it’s fair to say that, if someone took advantage of the programs offered, they would have been well prepared financially and emotionally for retirement.
Sadly, relatively few workers utilized all that was available to them—this despite the support and urging of the unions that represented them.

Read more »

Not Worthless

THE INTERNAL Revenue Code doesn’t authorize much relief for investors when they suffer capital losses that exceed their gains. It allows taxpayers each year to offset the excess against as much as $3,000 of their ordinary income from sources like salaries, pensions and withdrawals from IRAs.
What about the unused losses? The law lets investors carry forward such losses and claim them in an identical way on their tax returns in subsequent years, until they’re used up.

Read more »

Humble Arithmetic

IN THE HISTORY of the investment industry, May 1, 1975, is a date to be celebrated. On that day, the industry took not one, but two, remarkable steps forward.
The first change was an action by the SEC to deregulate stockbrokers. For the first time in more than 100 years, brokers were given the freedom to set their own commission rates on stock trades. The result was a boon for individual investors. Today, instead of paying hundreds of dollars to trade a stock,

Read more »

Repeat for Emphasis

JAMES CLEAR, in his bestselling book Atomic Habits, offers this thought-provoking notion: Suppose a plane takes off from Los Angeles on its way to New York. But after taking off, the pilot turns the nose of the plane by an almost imperceptible 89 inches. Where will the plane end up? The answer: nowhere near New York. As it flies across the country, that 89-inch difference will take it hundreds of miles off course.

Read more »

Money Guide

Special Needs Trusts

IF YOU HAVE a child with a physical or mental disability who is unlikely to be self-supporting, you might set up a special needs trust, either during your lifetime or upon your death. By placing money in the trust, not only can you specify how the money should be spent, but also you won’t disqualify the child from receiving means-tested government benefits. Typically, if a child has more than a modest amount of cash in his or her name, the child will be disqualified from receiving Medicaid and Supplemental Security Income. The SSI program pays benefits to disabled adults and children with modest incomes and few assets. To avoid disqualification, you might encourage family and friends to make gifts to the trust, rather than directly to your son or daughter. The trust shouldn’t disburse money to the beneficiary, because that could also disqualify the child from receiving government benefits. Instead, the money should be used to pay directly for goods and services for the child, such as education costs, entertainment, vacations, a personal attendant and out-of-pocket medical expenses. Make sure you use a qualified attorney to set up the trust. Carefully consider whom to appoint as trustees. You might pair a corporate trustee, such as a bank or trust company, with a family member. Look closely at the costs charged by the corporate trustee. Also ask the attorney whether the trust will be required to reimburse Medicaid after the beneficiary’s death—and whether it’s possible to sidestep this requirement. Next: Spendthrift Trusts Previous: Children’s Trusts
Read more »

Numbers

AN ESTIMATED 86% of U.S. funeral homes are privately owned. The remaining 14% are operated by publicly-traded companies, including 12% by Service Corp. International (SCI), according to the National Funeral Directors Association.

Newsletter

Choosing Our Future

WHEN FOLKS have financial questions, they go hunting for the right answer. But what if there’s no right answer to be found?
To be sure, in retrospect, the correct answer is often crystal clear. Looking back at 2018, we should have owned growth stocks until September and then gone to 100% cash. If our home didn’t burn down and our health was good, we shouldn’t have bothered with homeowner’s and health insurance. If we kept our job and survived the year,

Read More »

Archive

Growing Up (Part II)

I DON’T THINK my parents ever had any sort of five-step plan to teach me about money. I was always parsimonious, so they weren’t very focused on how I spent. They did, however, teach me two powerful life lessons—which changed not just the way I thought about money, but who I am. Everything has a cost. I attended private school from fourth to ninth grade, coasting by with B plusses and A minuses. My report cards usually included comments like “Zach could do so much better if he tried harder” or “When Zach is attentive, he is great, but at other times….” I told my parents this is what teachers said about everybody. They told me that if the comments didn’t change, they would pull me from the school, because they weren’t paying tuition for me to be comfortable. I didn’t believe them. It turned out it wasn’t an empty threat. Despite my rage, they transferred me to public school for tenth grade. Skin in the game. I was furious with my parents, but I also realized how serious they were. I refocused on academics and earned better grades, without any negative teacher comments. They let me reapply to my old private school, where my closest friends were and where I could actually make the basketball team, and I was accepted. But my parents laid down a condition: I had to pay 10% of the tuition out of my own pocket. They are both doctors and didn’t need my money. But they had seen my previous lack of appreciation—and wanted to ensure I didn’t again take private school for granted. For an entire year, I worked a retail job in the maternity and kids section of a department store in the Maine Mall in South Portland, paying back every penny to my parents. The experience made me a completely different student during my junior and senior years and, when I reached college, I valued my education—and how much it was costing—far more than some of my less grounded peers. This is the second in a series. The first part appeared July 25. Zach Blattner’s previous blogs include Seller's Remorse and Too Trusting. Zach lives in Cambridge, MA, and is a former teacher and school leader who now teaches English teachers as a faculty member at Relay GSE. He is a self-taught finance nerd who dispenses advice to his wife, friends, family and anyone else willing to listen.
Read more »

Truths

NO. 35: WHENEVER YOU buy or sell a stock or bond, somebody’s on the other side of the trade—and she’s likely far better informed. The financial markets attract some of the brightest minds: They’re the investors you’re trying to outwit when you make a trade. Do you know more than they do—or do they know something you don’t?

Act

CALCULATE YOUR REQUIRED nest egg. Once retired, you’ll likely have Social Security and perhaps a traditional employer pension. How much additional income will you need for a comfortable retirement? This money will need to come from savings. Take your desired portfolio income, multiply by 25—and you’ll have an estimate for how big a nest egg you need.

Think

DOLLAR AVERAGING. If you put, say, $300 into stocks every month, you’re dollar-cost averaging. Because you invest the same sum, you buy more shares when the market falls, thus lowering your average cost per share. Dollar averaging supposedly improves the odds of making money. Its real virtue: It helps investors to get started and then stay the course.

About Jonathan

Jonathan Clements

HumbleDollar is edited by Jonathan Clements, author of From Here to Financial Happiness.

Home Call to Action

Latest Blogs

Gaming the System

I’M AN AVID player of video and computer games—along with 150 million other Americans. They’ve been a nice occasional escape from the pressures and obligations of the real world for more than 40 years and, now well into my 50s, I’m old enough to see them as merely that.
Youth, on the other hand, is more susceptible to having their behavior influenced, if not shaped, by interactive entertainment. There’s much debate as to whether such games promote dissociative behavior and even violence.

Read more »

Still Learning

FOR THE BETTER part of 40 years, I spent a great deal of time helping thousands of workers prepare for retirement. We ran seminars for workers and spouses on topics like retirement income, insurance, lifestyle, relocation and more. I think it’s fair to say that, if someone took advantage of the programs offered, they would have been well prepared financially and emotionally for retirement.
Sadly, relatively few workers utilized all that was available to them—this despite the support and urging of the unions that represented them.

Read more »

Not Worthless

THE INTERNAL Revenue Code doesn’t authorize much relief for investors when they suffer capital losses that exceed their gains. It allows taxpayers each year to offset the excess against as much as $3,000 of their ordinary income from sources like salaries, pensions and withdrawals from IRAs.
What about the unused losses? The law lets investors carry forward such losses and claim them in an identical way on their tax returns in subsequent years, until they’re used up.

Read more »

Humble Arithmetic

IN THE HISTORY of the investment industry, May 1, 1975, is a date to be celebrated. On that day, the industry took not one, but two, remarkable steps forward.
The first change was an action by the SEC to deregulate stockbrokers. For the first time in more than 100 years, brokers were given the freedom to set their own commission rates on stock trades. The result was a boon for individual investors. Today, instead of paying hundreds of dollars to trade a stock,

Read more »

Repeat for Emphasis

JAMES CLEAR, in his bestselling book Atomic Habits, offers this thought-provoking notion: Suppose a plane takes off from Los Angeles on its way to New York. But after taking off, the pilot turns the nose of the plane by an almost imperceptible 89 inches. Where will the plane end up? The answer: nowhere near New York. As it flies across the country, that 89-inch difference will take it hundreds of miles off course.

Read more »

Numbers

AN ESTIMATED 86% of U.S. funeral homes are privately owned. The remaining 14% are operated by publicly-traded companies, including 12% by Service Corp. International (SCI), according to the National Funeral Directors Association.

Act

CALCULATE YOUR REQUIRED nest egg. Once retired, you’ll likely have Social Security and perhaps a traditional employer pension. How much additional income will you need for a comfortable retirement? This money will need to come from savings. Take your desired portfolio income, multiply by 25—and you’ll have an estimate for how big a nest egg you need.

Truths

NO. 35: WHENEVER YOU buy or sell a stock or bond, somebody’s on the other side of the trade—and she’s likely far better informed. The financial markets attract some of the brightest minds: They’re the investors you’re trying to outwit when you make a trade. Do you know more than they do—or do they know something you don’t?

Think

DOLLAR AVERAGING. If you put, say, $300 into stocks every month, you’re dollar-cost averaging. Because you invest the same sum, you buy more shares when the market falls, thus lowering your average cost per share. Dollar averaging supposedly improves the odds of making money. Its real virtue: It helps investors to get started and then stay the course.

Home Call to Action

Free Newsletter

Choosing Our Future

WHEN FOLKS have financial questions, they go hunting for the right answer. But what if there’s no right answer to be found?
To be sure, in retrospect, the correct answer is often crystal clear. Looking back at 2018, we should have owned growth stocks until September and then gone to 100% cash. If our home didn’t burn down and our health was good, we shouldn’t have bothered with homeowner’s and health insurance. If we kept our job and survived the year,

Read More »

Money Guide

Start Here

Special Needs Trusts

IF YOU HAVE a child with a physical or mental disability who is unlikely to be self-supporting, you might set up a special needs trust, either during your lifetime or upon your death. By placing money in the trust, not only can you specify how the money should be spent, but also you won’t disqualify the child from receiving means-tested government benefits. Typically, if a child has more than a modest amount of cash in his or her name, the child will be disqualified from receiving Medicaid and Supplemental Security Income. The SSI program pays benefits to disabled adults and children with modest incomes and few assets. To avoid disqualification, you might encourage family and friends to make gifts to the trust, rather than directly to your son or daughter. The trust shouldn’t disburse money to the beneficiary, because that could also disqualify the child from receiving government benefits. Instead, the money should be used to pay directly for goods and services for the child, such as education costs, entertainment, vacations, a personal attendant and out-of-pocket medical expenses. Make sure you use a qualified attorney to set up the trust. Carefully consider whom to appoint as trustees. You might pair a corporate trustee, such as a bank or trust company, with a family member. Look closely at the costs charged by the corporate trustee. Also ask the attorney whether the trust will be required to reimburse Medicaid after the beneficiary’s death—and whether it’s possible to sidestep this requirement. Next: Spendthrift Trusts Previous: Children’s Trusts
Read more »

Archive

Growing Up (Part II)

I DON’T THINK my parents ever had any sort of five-step plan to teach me about money. I was always parsimonious, so they weren’t very focused on how I spent. They did, however, teach me two powerful life lessons—which changed not just the way I thought about money, but who I am. Everything has a cost. I attended private school from fourth to ninth grade, coasting by with B plusses and A minuses. My report cards usually included comments like “Zach could do so much better if he tried harder” or “When Zach is attentive, he is great, but at other times….” I told my parents this is what teachers said about everybody. They told me that if the comments didn’t change, they would pull me from the school, because they weren’t paying tuition for me to be comfortable. I didn’t believe them. It turned out it wasn’t an empty threat. Despite my rage, they transferred me to public school for tenth grade. Skin in the game. I was furious with my parents, but I also realized how serious they were. I refocused on academics and earned better grades, without any negative teacher comments. They let me reapply to my old private school, where my closest friends were and where I could actually make the basketball team, and I was accepted. But my parents laid down a condition: I had to pay 10% of the tuition out of my own pocket. They are both doctors and didn’t need my money. But they had seen my previous lack of appreciation—and wanted to ensure I didn’t again take private school for granted. For an entire year, I worked a retail job in the maternity and kids section of a department store in the Maine Mall in South Portland, paying back every penny to my parents. The experience made me a completely different student during my junior and senior years and, when I reached college, I valued my education—and how much it was costing—far more than some of my less grounded peers. This is the second in a series. The first part appeared July 25. Zach Blattner’s previous blogs include Seller's Remorse and Too Trusting. Zach lives in Cambridge, MA, and is a former teacher and school leader who now teaches English teachers as a faculty member at Relay GSE. He is a self-taught finance nerd who dispenses advice to his wife, friends, family and anyone else willing to listen.
Read more »
Jonathan Clements

About Jonathan

HumbleDollar is edited by Jonathan Clements, author of From Here to Financial Happiness.