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Applying for college financial aid is a blind date that almost always disappoints.

Seizing the Moment

AS RETIREMENT approaches, one of the pivotal decisions many individuals face is when to start claiming Social Security benefits. It’s a choice that carries significant implications for financial security in the later stages of life. While the full retirement age (FRA) for Social Security benefits is typically between 66 and 67, many opt to claim benefits as early as age 62. This was the case for my husband and me, and our decision was guided by a blend of personal circumstances and financial considerations.

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Bucking the Trend

RETIREMENT. THE GOLDEN years. A time for travel, relaxation, and maybe a move to a quaint, low-maintenance condo. At least, that’s the image often portrayed. But for us, retirement wasn’t about shrinking our lives. We decided against the downsizing trend, opting to stay put in our familiar home filled with memories. Here’s why we chose comfort over perceived practicality:
The Heart of Our History. Our house isn’t just bricks and mortar; it’s a chronicle of our lives.

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Recent Writing

All You Need Is Three

IN THE DYNAMIC AND often volatile world of investing, simplicity can be a powerful ally. While the allure of complex strategies and exotic investments may seem appealing, many investors find themselves overwhelmed and underperforming as a result. Enter the three-fund portfolio—a straightforward, diversified approach that offers numerous benefits to investors of all levels. In this article, we delve into why investors should embrace this minimalist strategy and explore specific index funds that can help build a robust portfolio.

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Selling My Soul

THE GLINT OF a polished mahogany desk, the thrill of a closing handshake—that’s the image they paint of being a financial advisor. But for many of us starting out, the reality was a cramped cubicle and the relentless pressure to churn out variable annuity sales. For five years, I was a cog in that machine, and let me tell you, the shine wears off fast.
The Allure of the Annuity. Fresh out of college,

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How to Buy Happiness

MONEY MAY NOT BUY happiness directly, but it can certainly be a powerful tool for creating a more fulfilling life. The key lies in spending strategically, focusing on experiences and investments that nurture well-being rather than fleeting pleasures. Here are five smart ways to leverage your finances for a happier you:
1. Invest in Experiences, Not Things. Research shows that experiences bring us more long-term joy than material possessions. Think about it: The thrill of a weekend getaway with friends or the excitement of learning a new skill likely linger in your memory far longer than the satisfaction of a new gadget.

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No Advantage for Me

THE GOLDEN YEARS of life are often heralded as a time of relaxation and freedom, but for many, this period brings with it the daunting complexities of health care management. My journey through the labyrinth of Medicare Advantage and the elusive Medigap plan is a testament to the challenges faced by countless seniors across the nation.
The Allure of Medicare Advantage. Initially, the promise of Medicare Advantage seemed like a beacon of hope.

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Home Call to Action

Man vs. Machine

COULD HUMBLEDOLLAR be replaced by a website chock-full of articles created using artificial intelligence? The short answer: It would be remarkably easy—and I fear readers wouldn’t object, especially if they didn’t know how the articles were generated.
To show what’s possible, I requested eight personal-finance articles from three freely available artificial intelligence (AI) tools, ChatGPT, Google’s Gemini and Microsoft’s Copilot. The first of those articles is published today, with the other seven appearing over the next four days.

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The Lift I Needed

LIFE HAS A CURIOUS way of presenting us with unexpected opportunities for growth and learning. For me, one such moment occurred during an ordinary workday when I found myself trapped in an elevator with none other than Jack Bogle, the iconic figure in the world of finance and founder of Vanguard Group. Little did I know that this unforeseen predicament would lead to a profound exchange of ideas and invaluable investment lessons.
The day had started like any other,

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Where’s the Value?

I’VE NEVER BEEN MUCH of a collector. As a kid, I tried collecting comic books for a short time. I found that, after I read them, I had little use for them. I stored the comic books in an open box in my closet, where their translucent sleeves attracted a thick blanket of dust but little interest.
Later in life, I started a small wine collection. I didn’t get too far. It turns out I drank the wine at a rate far quicker than I acquired new vintages.

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Waiting It Out

THOSE WHO REGULARLY read posts on Bogleheads.org—and I’m guessing a good chunk of HumbleDollar readers do—know that the Bogleheads’ philosophy is to:

Never time the markets.
Buy only broad-market index funds via either mutual funds or exchange-traded funds.
Invest 25% to 75% of a portfolio in stocks using such funds, with the rest in bonds, and thereafter rebalance as needed. How big a percentage should you put in stocks? That’s based on risk tolerance.

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Get Educated

Truths

NO. 54: RISK GETS rewarded—usually. To earn high investment returns, we need to take high risk. But not all risk gets rewarded: Stocks should climb over time, but there’s no guarantee any one stock will triumph. Even entire national stock markets can suffer long periods of lousy returns, which is a reason to diversify globally and own some bonds.

Act

AIM TO BE debt-free by retirement. If you aren’t, you’ll have an added living cost to cover. That could necessitate larger IRA withdrawals or selling winning stocks in your taxable account. This extra income could trigger taxes on your Social Security benefit and larger Medicare premiums. Want to avoid that? Pay off all debt before you quit the workforce.

Think

FIXED COSTS. Our fixed monthly expenses include items like mortgage or rent, car payments, insurance premiums, utilities and groceries. The higher these costs, the less we’ll have for savings and for discretionary spending. The latter includes things like vacations, concerts, eating out and hobbies—typically the spending that brings the greatest happiness.

Money Guide

11 Happiness Tips

HOW CAN WE SQUEEZE more satisfaction out of our time and money? Here are 11 insights from the academic literature:
  1. Spend time with friends and family. Throw a party. Go out to dinner with friends. Fly across the country to see your children or grandchildren. Join family and friends in volunteering for a local charity. Happiness research suggests a robust network of friends and family can be a huge source of happiness.
  2. Devote yourself to work and hobbies that you find challenging, you’re passionate about, you think are important and you feel you’re good at. While achieving our goals often isn’t as satisfying as we imagine, making progress toward these goals can give us great satisfaction. Think about those moments when you’re engaged in activities you love, you’re completely absorbed and time just whizzes by. These moments of what psychologists call "flow" can be among our happiest times.
  3. Buy experiences, not possessions. The new car will likely go from a source of happiness to a source of unhappiness as it gets dinged up and breaks down. By contrast, a vacation can provide not just a wonderful week or two with family, but also many months of eager anticipation and many years of fond memories.
  4. Move closer to work. Research suggests a long commute can be terrible for happiness. We like to feel in control, and that’s tough to do when we're dealing every day with traffic or public transportation.
  5. Don’t move to a ritzier neighborhood than you can truly afford. Your wealthy neighbors will be a constant reminder that you aren’t so fortunate.
  6. Plan far ahead. When we spend money, often the best part is the anticipation, as we imagine how great it'll be to go on vacation or take delivery of the new car. Make sure you enjoy a long period of anticipation by avoiding impulse purchases—and instead pondering major purchases for at least a few months.
  7. Pay before you consume. For instance, if you're taking a trip, pay for the airfare and hotel rooms ahead of time. That way, you'll free yourself to enjoy the vacation without worrying about the cost involved.
  8. Don't treat yourself too often. If you have a favorite restaurant, you will probably enjoy each visit more if you go less frequently.
  9. Pay others to do chores you dislike, whether it's mowing the lawn, making dinner or cleaning the house.
  10. Give a little. Volunteering doesn’t just help others. It can also make us feel good about ourselves. Ditto for buying gifts.
  11. Count your blessings. Okay, maybe the new car doesn’t give you the same thrill it once did. But you might be able to squeeze a little more happiness from the vehicle if you pause for a moment, admire it and think how lucky you are.
Next: Main Menu Previous: Boosting Happiness Articles: Your Answers May Vary, 15 Ways to Happy and Spending Happily
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Manifesto

NO. 66: WE SHOULD build a low-cost, globally diversified stock and bond portfolio, so we’re highly likely to achieve our goals—no matter which parts of the financial markets shine.

Voices

What’s the best place to earn a safe yield?

"I find it interesting that “safe” yeilds are a moving target. Comparing rates and options from the comments given just 2 years ago would not be the optimal “safe” investment for today (April, 2024). For example, money settlement funds at Vanguard and Fidelity now significantly beat HSYA accounts, such as those at Ally. The safest bet may simply be to keep short term dollars flexible, no matter what the vehicle used."
- Jeff
Read more »

What would you happily buy even if it were twice the price?

"RM williams leather craftsman books Nutrabullet Ninja blender iPhone Bose QC35 noise canceling headset 1000TC linen sheets"
- Captain FI
Read more »

Second Look

Retirement

Losing My Balance

CNBC ANCHOR BECKY Quick recently summed up today’s retirement investing dilemma in one sentence: “You’re never going to make enough money if you have 40% of your money in bonds.” She, along with many pundits, believe the old standby recommendation to invest 60% in stocks and 40% in bonds—the classic balanced portfolio—is dead. Google “60/40 asset allocation” and the majority of recent articles have titles that include such words as “eulogy,” “endangered,” “dead,” “the end of” and “not good enough.”
Likewise,

Read more »

Family Finance

A+ for Effort

WE HAVE A PROBLEM: We may have saved too much for our daughter’s college education.
My wife and I started contributing aggressively to our daughter’s 529 college savings account as soon as she was born. For the first two years, we invested the full amount of the annual gift-tax exclusion, which was then $14,000. Now, the exclusion is at $16,000, but lately we haven’t been saving as much as we used to. The reason: Our early aggressive saving,

Read more »

Investing

Bullheaded

LOGIC AND DATA MAKE it abundantly clear that we’re highly unlikely to beat the market averages—and that indexing is the best strategy for the vast majority of investors. Yet half of U.S. stock fund assets remain actively managed and, for money that isn’t in mutual funds, the percentage is likely far higher.
That brings me to today’s contention: Maybe we should spend less time making the case for indexing. Instead, perhaps we should focus on the more obvious conundrum: If beating the market is a game that we’re extraordinarily unlikely to win,

Read more »

Lists

13 Rental Car Rules

IN SEPTEMBER 2017, my wife and I sold our home, car and almost all our earthly possessions. We spent the next four years driving across four continents. Along the way, I learned a great deal about renting a car that, in this rental-car-challenged world, could make your travels less costly and more reliable.
1. I use Expedia, Kayak and Hotwire to compare rental car rates. When you book, pay attention to whether your reservation is free cancellation or pay now (noncancellable).

Read more »
Home Call to Action

Mindset

Trial by Fire

DURING MARKET CRISES, I’ve sometimes made bad investment decisions—and sometimes I’ve successfully done nothing.
In 2008, I was living and working in Taiwan, meaning I heard what happened to U.S. stocks after the market was closed. When it’s 4 p.m. in New York, it’s 4 a.m. in Taiwan. I was also very busy at work.
This made it easier to do nothing about the 2008 stock market meltdown. I did nothing so well that by 2011,

Read more »

Free Newsletter

Get Educated

Manifesto

NO. 66: WE SHOULD build a low-cost, globally diversified stock and bond portfolio, so we’re highly likely to achieve our goals—no matter which parts of the financial markets shine.

Act

AIM TO BE debt-free by retirement. If you aren’t, you’ll have an added living cost to cover. That could necessitate larger IRA withdrawals or selling winning stocks in your taxable account. This extra income could trigger taxes on your Social Security benefit and larger Medicare premiums. Want to avoid that? Pay off all debt before you quit the workforce.

Truths

NO. 54: RISK GETS rewarded—usually. To earn high investment returns, we need to take high risk. But not all risk gets rewarded: Stocks should climb over time, but there’s no guarantee any one stock will triumph. Even entire national stock markets can suffer long periods of lousy returns, which is a reason to diversify globally and own some bonds.

Think

FIXED COSTS. Our fixed monthly expenses include items like mortgage or rent, car payments, insurance premiums, utilities and groceries. The higher these costs, the less we’ll have for savings and for discretionary spending. The latter includes things like vacations, concerts, eating out and hobbies—typically the spending that brings the greatest happiness.

Money Guide

Begin Here

11 Happiness Tips

HOW CAN WE SQUEEZE more satisfaction out of our time and money? Here are 11 insights from the academic literature:
  1. Spend time with friends and family. Throw a party. Go out to dinner with friends. Fly across the country to see your children or grandchildren. Join family and friends in volunteering for a local charity. Happiness research suggests a robust network of friends and family can be a huge source of happiness.
  2. Devote yourself to work and hobbies that you find challenging, you’re passionate about, you think are important and you feel you’re good at. While achieving our goals often isn’t as satisfying as we imagine, making progress toward these goals can give us great satisfaction. Think about those moments when you’re engaged in activities you love, you’re completely absorbed and time just whizzes by. These moments of what psychologists call "flow" can be among our happiest times.
  3. Buy experiences, not possessions. The new car will likely go from a source of happiness to a source of unhappiness as it gets dinged up and breaks down. By contrast, a vacation can provide not just a wonderful week or two with family, but also many months of eager anticipation and many years of fond memories.
  4. Move closer to work. Research suggests a long commute can be terrible for happiness. We like to feel in control, and that’s tough to do when we're dealing every day with traffic or public transportation.
  5. Don’t move to a ritzier neighborhood than you can truly afford. Your wealthy neighbors will be a constant reminder that you aren’t so fortunate.
  6. Plan far ahead. When we spend money, often the best part is the anticipation, as we imagine how great it'll be to go on vacation or take delivery of the new car. Make sure you enjoy a long period of anticipation by avoiding impulse purchases—and instead pondering major purchases for at least a few months.
  7. Pay before you consume. For instance, if you're taking a trip, pay for the airfare and hotel rooms ahead of time. That way, you'll free yourself to enjoy the vacation without worrying about the cost involved.
  8. Don't treat yourself too often. If you have a favorite restaurant, you will probably enjoy each visit more if you go less frequently.
  9. Pay others to do chores you dislike, whether it's mowing the lawn, making dinner or cleaning the house.
  10. Give a little. Volunteering doesn’t just help others. It can also make us feel good about ourselves. Ditto for buying gifts.
  11. Count your blessings. Okay, maybe the new car doesn’t give you the same thrill it once did. But you might be able to squeeze a little more happiness from the vehicle if you pause for a moment, admire it and think how lucky you are.
Next: Main Menu Previous: Boosting Happiness Articles: Your Answers May Vary, 15 Ways to Happy and Spending Happily
Read more »

Voices

What’s the best way to gauge an investor’s risk tolerance?

"Determining risk tolerance is a tricky thing. Its unknowable until one has a meaningful amount (to them) at risk during a prolonged bear market and it changes with wealth, life stage and life events."
- TechnoPeasantx
Read more »

When is it okay to drop life insurance coverage?

"I bought a small ($5,000) life insurance policy back in 1968 when I was 19 and still have it. I realize that I don't need it and never really did, I never married and have no children so there is nobody to protect. I looked into cashing in the policy a few years ago. With the dividends going towards buying additional insurance over the years, the cash value had risen to over $25,000. Even after deducting a half century of premiums ($100/year), the extra income would have put me over the limit for some tax benefits. I finally decided to borrow about half of it with no intention of ever paying back. The annual dividends increase the cash value each year by more than the interest on the loan so the cash value will never reach zero, which would trigger the taxes. When I die, the loan amount will be deducted from the death benefit with no tax consequences. I may eventually borrow more. If I had to do it over again, I likely wouldn't have gotten the policy, or at least had gotten a term instead of a whole-life policy. Yesterday I happened to run into the widow of the agent who sold me the policy, she's a resident of the same assisted living facility as my brother. I wonder how much he made from selling me the policy."
- GaryW
Read more »

Which financial tasks do you find most irksome?

"Calling companies. The VERY 1st thing they say is a lie, "Your call is very important to us" Ha! Their greedy CEO's obscene pay is the ONLY thing that's important to them! That's why they don't hire enough to help. Then they interrupt music every 20 seconds for yet another ad. Trying to get a callback never works -- again because they have lousy tech, because their priority is their greedy CEO. Trying to do anything online is almost is bad -- again because they have lousy tech, because their priority is their greedy CEO."
- John Elway
Read more »

Second Look

Retirement

Losing My Balance

CNBC ANCHOR BECKY Quick recently summed up today’s retirement investing dilemma in one sentence: “You’re never going to make enough money if you have 40% of your money in bonds.” She, along with many pundits, believe the old standby recommendation to invest 60% in stocks and 40% in bonds—the classic balanced portfolio—is dead. Google “60/40 asset allocation” and the majority of recent articles have titles that include such words as “eulogy,” “endangered,” “dead,” “the end of” and “not good enough.”
Likewise,

Read more »

Family Finance

A+ for Effort

WE HAVE A PROBLEM: We may have saved too much for our daughter’s college education.
My wife and I started contributing aggressively to our daughter’s 529 college savings account as soon as she was born. For the first two years, we invested the full amount of the annual gift-tax exclusion, which was then $14,000. Now, the exclusion is at $16,000, but lately we haven’t been saving as much as we used to. The reason: Our early aggressive saving,

Read more »

Investing

Bullheaded

LOGIC AND DATA MAKE it abundantly clear that we’re highly unlikely to beat the market averages—and that indexing is the best strategy for the vast majority of investors. Yet half of U.S. stock fund assets remain actively managed and, for money that isn’t in mutual funds, the percentage is likely far higher.
That brings me to today’s contention: Maybe we should spend less time making the case for indexing. Instead, perhaps we should focus on the more obvious conundrum: If beating the market is a game that we’re extraordinarily unlikely to win,

Read more »
Home Call to Action

Lists

13 Rental Car Rules

IN SEPTEMBER 2017, my wife and I sold our home, car and almost all our earthly possessions. We spent the next four years driving across four continents. Along the way, I learned a great deal about renting a car that, in this rental-car-challenged world, could make your travels less costly and more reliable.
1. I use Expedia, Kayak and Hotwire to compare rental car rates. When you book, pay attention to whether your reservation is free cancellation or pay now (noncancellable).

Read more »

Mindset

Trial by Fire

DURING MARKET CRISES, I’ve sometimes made bad investment decisions—and sometimes I’ve successfully done nothing.
In 2008, I was living and working in Taiwan, meaning I heard what happened to U.S. stocks after the market was closed. When it’s 4 p.m. in New York, it’s 4 a.m. in Taiwan. I was also very busy at work.
This made it easier to do nothing about the 2008 stock market meltdown. I did nothing so well that by 2011,

Read more »