Lottery winners make the front page and star money managers make the business page. Winning seems easy—because the losers aren’t mentioned.
THE TWO-MINUTE CHECKUP is, I like to think, a unique financial tool: It aims to offer feedback across someone’s entire financial life based on no more than nine pieces of information. That’s an ambitious goal and—perhaps no surprise—some users have found the calculator wanting.
Meet Checkup 2.0.
Sanjib Saha, who writes for HumbleDollar when he isn’t busy writing software, and I went through all the comments that the calculator had received and made a host of changes.
MY LEAST FAVORITE time of the year is fast approaching—the holidays. The curmudgeonly part of me will be on full display.
Don’t get me wrong, there are many aspects that I like. I enjoy the spirit of Christmas, the music, getting together with friends and family, and eating. But let’s face it, there’s a lot of stress, aggravation—and money to be spent.
My DVR stores A Christmas Story, which is my favorite holiday movie and which I watch every December.
I FLUNKED MY FIRST two interviews for an academic job. Fifty years ago, I didn’t make the grade at the University of California, Los Angeles, or the University of California, Berkeley, either of which would have made a fitting classroom for an unseasoned but game New Yorker.
Instead, I prevailed at the University of California, Davis, the agricultural mecca of the statewide system. I was sold when I looked at one of those old gas station maps and saw that I’d be close to San Francisco.
MY WIFE AND I ARE expecting our first baby in March. In preparation, we’re converting what used to be an office into a nursery. We’ve bought a crib, glider chair, curtains and dresser for the new room. But we also needed to find a place to put the desk and furniture that was in the office. We decided to move the office into what is currently a quasi-sunroom.
When we bought the home, our inspector disclosed that the sunroom was likely built by the homeowner and wasn’t up to code.
IF THERE’S ANYTHING to be learned from our monthly list of the most popular articles and blog posts, it’s this: Among HumbleDollar’s readers, the two most enduring interests are retirement and the financial markets. Here are November’s 10 best-read pieces:
Planning to move to a retirement community when you quit the workforce? Ron Wayne takes a look at one of the most famous—The Villages in Central Florida.
As we age, our capacity to make sound financial decisions often wanes.
WHEN I WAS IN MY 20s, I was lucky to work for a company that offered a pension plan—and that put me on the road to retirement. Today, unfortunately, company pensions are rare. How can you ensure a comfortable retirement? Try shooting for these age-related milestones:
Age 25. Start saving at least 15% of your gross income. As I mentioned in an earlier article, a Fidelity Investments study found that if you save 15% of your gross income every year from age 25 through 67,
WE HAVE ALL BEEN affected by rising interest rates in 2022, from skyrocketing mortgage rates to plunging bond prices. A less-publicized casualty: Higher interest rates are having a big effect on those approaching retirement who are eligible for a pension.
How so? Many pension plans offer a choice between a lifetime stream of monthly income and a onetime lump sum payment. Rising rates could reduce the lump sum payment that many employees would receive next year by 25% or 30%.
ALL THIS MARKET turmoil has me thinking about my portfolio—and the things I’m a little hazy about.
One of my stock mutual funds just paid me a capital gains distribution of more than $5,000. I sure wasn’t expecting that. In fact, I wasn’t expecting any capital gains this year. It seems the net gain on the sale of individual stocks within a mutual fund are distributed to shareholders, no matter how the overall fund has performed.
AT A VULNERABLE time in my life, I went to a “quantum healer” who said my deceased mother was trying to ask me, “What do you want?”
I kept saying “I don’t know” to the healer and she kept repeating the question, until the answer popped out unexpectedly, “I just want to be alone right now.” The healer said my mother was clapping. That was exactly what I needed to hear to help me clarify my thinking.
MY FAMILY IS FRUGAL all year long, even during the Christmas season. We’re modest with our gifts and sparing with our decorations. Each year, our sprucing up consists of one cut-your-own Christmas tree trimmed with the same ornaments we used the year before. I can’t say the same for our neighbors. They pull out all the stops to create a seasonal spectacle.
There’s no need to take a long, cold sleigh ride to the North Pole to scope out Santa and his companions frolicking in snowy splendor.
NO. 99: A REAL ESTATE agent’s greatest financial incentive isn’t to get us the best price, but to get us to act quickly. If we spend an extra month hunting for the right house to buy—or holding out for a higher price if we’re looking to sell—the real estate agent might make little or no additional commission, but he or she will have to put in substantially more work.
CONSIDER A ROTH conversion. Is your taxable income for the current year less than normal, so you’ll end up in a lower income tax bracket? To take advantage, you might convert part of your traditional IRA to a Roth IRA, where the money will grow tax-free thereafter. One warning: Make sure you have the necessary cash set aside to pay the resulting tax bill.
FAT TAILS. We imagine investment returns will look like the standard humped-back normal distribution curve, with annual results mostly clustering around the average, while extremely good and bad years are relatively rare. But in reality, great and terrible years occur with surprising frequency, causing the performance distribution curve to have “fat tails.”
NO. 57: WE FAVOR possessions for their lasting value, but often we get greater happiness when we spend money on experiences. Forget the new car. Instead, take the family to Paris.
IT’S ONE OF THE stranger arguments for claiming Social Security retirement benefits at age 62—but I’m hearing it with increasing frequency. The contention: We should claim benefits early because we’ll enjoy the money more in our 60s, when we’re traveling and spending more, than in our 80s, when we’ll likely be sticking closer to home.
It isn’t clear to me that we should expect to spend less in our 80s, when we may have significant medical expenses.
UPON RETIREMENT, I picked up additional duties at home. One was cooking and the other was grocery shopping, both of which I enjoy. The shopping part furthers my ability to observe people, a favorite pastime.
I have concluded that you can tell a great deal about people’s spending and lifestyle habits simply by what’s in their shopping cart. And you can tell quite a bit about individual responsibility and personal behavior by what people do with their empty shopping cart.
I HAD THE OPPORTUNITY to view Gustav Klimt’s most famous work of art, The Kiss, while visiting Vienna a few years back. It depicts a couple locked in an intimate embrace. It’s an oil painting with a significant amount of gold leaf—quite distinctive.
A few weeks later, I had an opportunity to buy a Klimt. I was in a gallery in Salzburg and came across a drawing of his which was titled Stehender Rückenakt –
IT SEEMS QUAINT NOW, but a quarter century ago conversations would often degenerate into arguments over facts. How much do homes typically appreciate? How much does the average American have saved by retirement? What does a nursing home cost? Such questions would trigger tedious debates built on anecdotal evidence and half-remembered newspaper articles.
But as my father—who died in 2009—often remarked during the final decade of his life, there’s no point anymore in arguing over facts.
MRS. J. LIVED IN southeast Virginia and had purchased an eight-year-old truck at auction for her college-bound child. It turns out that the truck had spent its entire life in and around Rochester, New York, in the heart of the Rust Belt. Mrs. J. had been advised by her local garage that many of the exposed chassis components on her truck were covered in rust. Her neighbors’ cars did not exhibit this condition. She felt the truck was unsafe and that the vehicle’s manufacturer—my employer—owed her a solution.
NO. 57: WE FAVOR possessions for their lasting value, but often we get greater happiness when we spend money on experiences. Forget the new car. Instead, take the family to Paris.
CONSIDER A ROTH conversion. Is your taxable income for the current year less than normal, so you’ll end up in a lower income tax bracket? To take advantage, you might convert part of your traditional IRA to a Roth IRA, where the money will grow tax-free thereafter. One warning: Make sure you have the necessary cash set aside to pay the resulting tax bill.
NO. 99: A REAL ESTATE agent’s greatest financial incentive isn’t to get us the best price, but to get us to act quickly. If we spend an extra month hunting for the right house to buy—or holding out for a higher price if we’re looking to sell—the real estate agent might make little or no additional commission, but he or she will have to put in substantially more work.
FAT TAILS. We imagine investment returns will look like the standard humped-back normal distribution curve, with annual results mostly clustering around the average, while extremely good and bad years are relatively rare. But in reality, great and terrible years occur with surprising frequency, causing the performance distribution curve to have “fat tails.”
IT’S ONE OF THE stranger arguments for claiming Social Security retirement benefits at age 62—but I’m hearing it with increasing frequency. The contention: We should claim benefits early because we’ll enjoy the money more in our 60s, when we’re traveling and spending more, than in our 80s, when we’ll likely be sticking closer to home.
It isn’t clear to me that we should expect to spend less in our 80s, when we may have significant medical expenses.
UPON RETIREMENT, I picked up additional duties at home. One was cooking and the other was grocery shopping, both of which I enjoy. The shopping part furthers my ability to observe people, a favorite pastime.
I have concluded that you can tell a great deal about people’s spending and lifestyle habits simply by what’s in their shopping cart. And you can tell quite a bit about individual responsibility and personal behavior by what people do with their empty shopping cart.
I HAD THE OPPORTUNITY to view Gustav Klimt’s most famous work of art, The Kiss, while visiting Vienna a few years back. It depicts a couple locked in an intimate embrace. It’s an oil painting with a significant amount of gold leaf—quite distinctive.
A few weeks later, I had an opportunity to buy a Klimt. I was in a gallery in Salzburg and came across a drawing of his which was titled Stehender Rückenakt –
IT SEEMS QUAINT NOW, but a quarter century ago conversations would often degenerate into arguments over facts. How much do homes typically appreciate? How much does the average American have saved by retirement? What does a nursing home cost? Such questions would trigger tedious debates built on anecdotal evidence and half-remembered newspaper articles.
But as my father—who died in 2009—often remarked during the final decade of his life, there’s no point anymore in arguing over facts.
MRS. J. LIVED IN southeast Virginia and had purchased an eight-year-old truck at auction for her college-bound child. It turns out that the truck had spent its entire life in and around Rochester, New York, in the heart of the Rust Belt. Mrs. J. had been advised by her local garage that many of the exposed chassis components on her truck were covered in rust. Her neighbors’ cars did not exhibit this condition. She felt the truck was unsafe and that the vehicle’s manufacturer—my employer—owed her a solution.
Do you favor Roth or traditional retirement accounts?
How much of a stock portfolio should be invested abroad?
What should be the top priorities for those in their 20s?