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Looking Back On My Hard Luck Days

DAN SMITH | Aug 7, 2026

"I am sorry for the loss of your wife. Bob"

- Mom & Dad Schneider

What is the right percentage?

R Quinn | Aug 9, 2026

"For us, it wasn't replacing any specific % of working income, it was when our income streams would more than cover our expenses (yes, calculated with a ... spreadsheet) and also allow us to continue to save each month. Our pensions have a COLA which has more than kept up with Medicare and other increased costs. My wife started receiving social security in February and all that goes into savings. So, we don't anticipate needing to tap into our T-IRA, Roth IRA's, or savings accounts in order to pay monthly bills. While I hope that our politicians do something positive to save social security with no benefits reduction, even if reduced benefits happen it won't interfere with our retirement lifestyle."

- Dave Melick

Short term and long term Social Security planning

William Perry | Aug 4, 2026

"Interesting question Robert that sent me down a rabbit hole. Using the CMS 271 page report with a transmittal letter of June 9, 2026 titled "THE 2026 ANNUAL REPORT OF THE BOARDS OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE AND FEDERAL SUPPLEMENTARY MEDICAL INSURANCE (SMI) TRUST FUNDS" the best answer I can find appears to be that the IRMAA contributions are not broken out from the approximate 22% of total revenues that come from beneficiary premiums. Page 13 reads in part - For SMI, government contributions represent the largest source of income. These contributions covered about 75 percent of program costs in 2025. Also, beneficiaries pay monthly premiums for Parts B and D. Those premiums financed roughly 22 percent of the total cost in 2025... "

- William Perry

Roth Conversions and Taxes

ArticleJohn Urban | Aug 8, 2026

EVERY ARTICLE ABOUT Roth conversions says the same thing: pay the tax from taxable money, not from the IRA. That is good advice if you have taxable money. Plenty of retirees do not. Their savings sit almost entirely in a traditional IRA, built from years of 401(k) contributions and a rollover at retirement, with little brokerage money and no cash reserve worth naming. For them, “pay from outside money” is not advice. It is a condition they do not meet. Their real choice is a self-funded conversion or no conversion at all. The familiar warning is that self-funding requires a gross-up. You withdraw money to pay the conversion tax, that withdrawal is itself taxable, so you have to withdraw a little more. Less discussed is what else that withdrawal sets off. It makes more of your Social Security taxable, it raises your Medicare premiums two years later, and in a high-tax state it enlarges the amount that has to leave the IRA. Here is what those three cost, on one household. A cautious conversion Meet Dianne, a composite rather than a real person. She is 66, single, retired to Florida, with $1 million in a traditional IRA and nothing outside it. Social Security pays her $28,000 a year. She is past 59 and a half and already on Medicare. Florida keeps state income tax out of the arithmetic for now. She converts $40,000. Careful, modest, the size people choose when they are trying not to do anything dramatic. The tax on that conversion, paid from a checking account she does not have, would be $4,234. Funding it from the IRA instead, the withdrawal that covers it is $5,125, and her tax rises to match. That extra $891 is 17.4% of the $5,125 she withdrew. Her ordinary-income bracket is 12%. Twelve of those points are the tax on the withdrawal itself, which is the gross-up everybody expects. The other 5.4 points come from $2,300 of her Social Security being pulled into taxable income by that same withdrawal. Paying from cash, $21,500 of her benefit would be taxable. Self-funding, $23,800 is. The difference is caused by how she paid, not by what she converted, and nothing on her return will label it. Not a smaller version of a large one The effect is not linear. Run the same woman at $150,000 and 85% of her benefit, the statutory maximum, is already taxable before she funds the tax. The funding withdrawal drags in nothing further, and this particular cost is zero. That is not an argument for converting more. It is an argument against assuming a small conversion is simply a smaller version of a large one. The one that looks cautious can carry the higher marginal rate. What self-funding actually costs Give Dianne the $150,000 conversion, still with no outside cash, and add the state question. Still in Florida, $195,469 has to leave the traditional IRA to put $150,000 into the Roth. Move her to California, changing nothing else, and it is $219,751. That is $1.30 of IRA spent for every dollar reaching the Roth, against $1.47, and the gap is California income tax compounded through the gross-up. If a move across state lines is anywhere in your plan, the order of operations may matter more than the size of the conversion. But $1.47 invites a conclusion it does not support, and I would rather correct that myself than let it travel. A conversion is taxable whichever pocket pays. Of the $69,751 Dianne withdraws in California, roughly $44,639 replaces cash she would have spent anyway. The incremental cost of self-funding, in wealth given up, is $25,111. About 17% of the conversion, not 47. The bill that arrives in 2028 At that $150,000 conversion, self-funding also costs Dianne $1,735 in higher Medicare premiums, a surcharge of $6,355 rather than $4,620, charged on top of the standard premium, for one year, and hers alone as a single filer. The bill arrives two years late. Medicare sets her 2028 premiums from her 2026 income, so the cost is invisible at the moment she is deciding how to pay the 2026 tax. When it can still make sense Doing nothing is not free either. Money left in a traditional IRA comes out eventually, under required distributions, at whatever rates apply then, possibly to a survivor filing single, possibly to heirs facing a 10-year deadline. Where self-funding still holds up, a few things tend to be true. The rate gap is durable rather than a one-year accident. Whether it repays a cost this size depends on time, future tax rates and investment returns. A temporary dip in income is a thin foundation. A structural window, after retirement and before Social Security or required distributions begin, is more compelling. There is runway, because shrinking the portfolio to change its tax character needs years of tax-free growth to earn back. Age 59 and a half is cleanly behind you. The converted amount is not subject to the 10% additional tax on early distributions. A separate distribution taken to pay the tax generally is, unless an exception applies. And enough is left afterward. Check the balance after the funding withdrawal, not after the conversion. Dianne’s California IRA drops to $780,249, and whether that funds the next 30 years matters more than whether the conversion was tax-efficient. A practical warning about withholding Withholding from the conversion is not a cheaper way to pay the tax. It reduces what reaches the Roth. Elect 24% on Dianne’s $40,000 conversion, as this illustration does rather than as any custodian requires, and $9,600 goes to the IRS while $30,400 lands in the Roth, against $4,234 actually owed. The cash comes back next spring as a refund. The Roth room does not come back at all. Restating the rule Pay the conversion tax from outside cash if you have it. That remains the best answer. It is not an answer for the retiree whose savings are almost entirely in a traditional IRA. For that person, “never pay from the IRA” skips the actual decision, which is whether a self-funded conversion, with its full marginal cost, beats leaving the money where it is. Before deciding, count the gross-up, the Social Security effect, state tax and the Medicare bill two years later. Sometimes that arithmetic still says no. It beats applying a rule written for somebody with a different balance sheet. ________________________________________________________________________________ John Urban is the founder of RetireSmartIRA, a retirement tax-planning app. Earlier, he founded GT Nexus, a supply-chain software company acquired by Infor in 2015. He lives in Northern California with his wife, Kathy, and enjoys time with family, travel, reading, Bay Area sports, and the occasional deep dive into the fine print of the tax code.

Risk and Taxes

ArticleAdam M. Grossman | Aug 8, 2026

AFTER YEARS OF heady gains in the stock market, many investors are facing the same question: To manage risk, they’d like to cut back on one or more of their holdings. But because of the potentially costly tax bill that might result, they aren’t sure exactly how to do that. How can you square this circle? One easy option would be to donate appreciated assets to charity. But that would make sense only if it aligns with your charitable goals and, of course, if you don’t need those funds for other uses. How else could you strike a balance between managing risk and limiting taxes? Here’s how I would answer this question. Step 1. I’d start by estimating the potential risk level among your holdings. While there’s no single litmus test, you could ask the following questions. First, how large a portion of your assets does any single holding represent? As a rule of thumb, I’d focus first on individual stocks that top 5%. Why 5%? My operating assumption is that any individual stock could experience a 50% decline during a crisis. So if a holding is limited to 5%, then a 50% drop would result in an overall portfolio impact of just 2.5%. I see that as very manageable. To be sure, stocks can certainly decline by more than 50%, but I view this as a reasonable figure for risk management. While I worry most about the risk posed by single stocks, it’s also important to examine the overall composition of your portfolio. That’s because, counterintuitively, a portfolio of 30 stocks could end up being riskier than a group of just 10. Harry Markowitz, the father of Modern Portfolio Theory, explained why. In his initial work back in the 1950s, Markowitz used railroad company stocks to explain the concept of diversification. There’s nothing inherently wrong with railroad stocks, Markowitz explained. But if a portfolio consists of only railroad stocks, then that would be a problem—because companies in the same industry are often impacted by the same economic factors. In other words, a portfolio consisting of a large number of holdings might only appear diversified, so it’s important to look under the hood. Another risk factor to consider: Do you work for a public company and own the company’s stock? If so, that would be a reason to consider diversifying more quickly (within the permitted time windows). What if you own only mutual funds or ETFs? Diversified funds tend to be less risky than individual stocks, but that’s not always the case. The fund industry launches as many as 1,000 new funds each year, including many with very aggressive strategies. So it’s important to check each fund’s holdings. You can find that information on the fund company’s website or on a site like Morningstar (Here, for example, are the top holdings in Vanguard’s S&P 500 index fund). Step 2. Next, you’d want to estimate how much a loss might impact you. As with most questions in personal finance, there are two answers to consider: how it might affect you in dollar terms, and the degree to which a loss would simply be upsetting. Both are important. Step 3. If you determine the holding in question does represent a material risk, then you’d want to estimate the potential tax impact. Here are questions you might ask: What would the tax be if you exited the entire position? Would it push your income into the next capital gains bracket? Are there tax lots with less appreciation you could take advantage of? Do you have losses you could use to offset some of the gains? Do you expect to be in a higher or lower tax bracket next year? Step 4. If you conclude that the tax bill might be significant, what steps could you take to reduce a holding tax-efficiently? Here are strategies to consider: For starters, I suggest deciding on a target percentage for the holding. While ideally I prefer bringing any individual stock down to a 5% weighting, that figure isn’t a rule. All things being equal, the larger a portfolio, the more risk you can afford. After deciding on a target percentage, the simplest approach would be to set up a long-term sale plan—like dollar cost averaging but in reverse. Suppose you’d like to sell 1,200 shares of a given stock. You could sell 100 shares each month for twelve months. You’d do that regardless of whether the stock happens to be up or down that month. That 12-month schedule isn’t a rule. If your holding is very significant, you might opt for a longer timeframe. On the other hand, if you feel the stock has a particularly highflying valuation, you might choose a quicker pace. The key, in my view, is just to get started. As the writer Carveth Read wrote, “it’s better to be roughly right than precisely wrong.” Selling a stock down over time is the simplest way to reduce risk, but it’s hardly the most tax efficient. Another approach that’s been gaining in popularity is known as a 351 exchange fund. With a 351, the idea is that a group of investors, each with their own portfolios of appreciated securities, come together and collaborate to diversify their respective holdings. To provide a simplified illustration, imagine two investors, each with a concentrated holding, one in Microsoft and the other in Apple. Each would benefit by diversifying, and that’s what a 351 exchange fund allows. Each would contribute their respective shares into a common pool that would then hold some Apple and some Microsoft. This new investment would be structured as an ETF, and each investor would be issued shares proportional to the size of their contribution. Importantly, the initial creation of a 351 fund doesn’t entail any tax. Taxes are due only when an investor later sells shares of that ETF. This is a simplified example. In reality, a 351 exchange fund would hold many more than just two holdings. They’re actually required to meet various diversification requirements. As a result, investors in 351 funds may end up feeling sufficiently diversified and thus comfortable holding their fund shares for the long term. That would make this strategy potentially the most tax-efficient way to manage portfolio concentration risk. This is just an overview, though. If you’re interested in 351 strategies, I suggest further research. In July, The Wall Street Journal discussed these funds in some detail. In addition, a firm called Alpha Architect, the largest player in this area, has a number of helpful explanatory videos on its site. Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

Taxing Social Security benefits

R Quinn | Aug 6, 2026

"I am going on a reading strike about Social Security. If the title says Social Security I do not read."

- Nick Politakis

Before Someone Else Decides

Kathleen Rehl | Aug 2, 2026

"Martin, you raise an important point. The financial implications of a later-life move can vary greatly by state and by family circumstances—and estate and inheritance taxes may outweigh the more immediate tax differences. Your comment is a good reminder that “Where should I live next?” is both a lifestyle decision and an estate-planning decision. I hope your next move gives you the setting you want and helps you preserve more of what you have built for your children."

- Kathleen Rehl

For most retirees, the greatest fear is not death—it is running out of money before they die.

Matt Halperin | Aug 6, 2026

"This is very well framed. thanks"

- Rick Connor

FIFA Financials

R Quinn | Jul 19, 2026

"If you're a LedZep fan, try to catch one of Jason Bonham's "Led Zeppelin Experience" shows. Jason is, of course, John Bonham's son. Caught it at Wolftrap in Northern Virginia a couple years back. Fantastic show! Jason is currently touring too! Check www.jasonbonham.net I think."

- Mark Ukleja

“Gerontocracy” in America

Chris Rush | Aug 6, 2026

"Thanks for sharing this, Chris. I found Moyn’s notion that “age limits for political office are a must” ageist, and his book’s loaded, buzzword-laden title polarizing. His sprawling narrative seems to conflate a demographic anomaly (the baby boom) and long-lamented political challenges such as special interest money and the incumbency effect, among other factors. Given that, his prescribed remedies miss the root causes and aim for a more convenient target: the aged. At age 54, he might consider what his ideas mean for his own cohort: Generation X. As a considerably smaller generation, we already lack much influence. Under Moyn’s proposals, Generation X—and future generations—might have even less of a voice upon reaching our “golden years.”"

- D.J.

Jonathan’s Parting Thoughts: No. 8

Jonathan Clements | Aug 7, 2026

"Rob Berger had a YouTube video published 3 years ago titled "Avantis All Equity Market ETF (ticker: AVGE) Pros and Cons" where he discussed this fund which was new as it started in 2022 and he also made some comparisons with VT. I interpret Rod Berger's main concern about AVGE was the fact that as the fund was new that the newness alone was then disqualifying for him to include in his holdings. AVGE is also a fund of funds, is actively managed, tilts toward value, tilts towards US and uses a mathematical formula to look at past profitability to help fund management project which investments will be profitable in the future. That may parallel your investing thinking but I have gone with VT, for better or worse, which tracks the appropriate world equity index. A couple of key numbers and considerations - Expense ratios (net current) - AVGE 0.23%, VT 0.06% YTD gain per Morningstar 8/6/2025 to 8/7/2026 - AVGE +28.71%, VT +23.32% The VT fund at 6/30/2026 was about 80 times the size of AVGE The AVGE has a large Bid/Ask Spread which likely is caused because it is a "fund of funds" that trades underlying small-cap and value-tilted global equities and because of lower daily trading volume compared to a much larger fund like VT."

- William Perry

Inflation, prices, COLAs, retirement and the last 16 years

R Quinn | Jul 27, 2026

"I suspect the posts you read from seniors are those that do not really have adequate funds built up in IRAs (or other investment orientated savings) to act as the buffer on top of SS. The world has however changed and anyone who has retired in the past 10 years (or is coming up to retirement) should be aware of the utility in maintaining equity market exposure as a key part of managing inflation (and other life event) risks. As has been discussed before SWR is only a tool not the entire answer. If you're asking how much can I draw from $1m capital then 40k pa (rising with inflation) is a reasonable answer for a 30 year lifespan etc. That does nothing to tell you whether $40k will support your lifestyle and/or leave enough surplus for unexpected needs. Hence why you also need a budget or alternately the discipline to live within the income. I'd suggest it is wise to at least think about financial strategy in weathering unexpected needs. But it doesn't need to negate the overall drawdown strategy - for some it might be drawing at only 3.5%, for others maintaining a cash-like emergency fund or being prepared to sell a second home or whatever. My approach is to have a notional "when it's gone, it's gone" pot to cover lumpy one-off spend. Then I top it up from excess from my planned drawings or if it goes, replenish by paring back lifestyle spending a bit. Some people might need to see that as a physically separate fund/account. That's personal choice (possibly for those allergic to spreadsheets/budgeting ;) ) and largely just accounting presentation."

- bbbobbins

Looking Back On My Hard Luck Days

DAN SMITH | Aug 7, 2026

"I am sorry for the loss of your wife. Bob"

- Mom & Dad Schneider

What is the right percentage?

R Quinn | Aug 9, 2026

- Dave Melick

Short term and long term Social Security planning

William Perry | Aug 4, 2026

- William Perry

Roth Conversions and Taxes

ArticleJohn Urban | Aug 8, 2026

Risk and Taxes

ArticleAdam M. Grossman | Aug 8, 2026

Taxing Social Security benefits

R Quinn | Aug 6, 2026

"I am going on a reading strike about Social Security. If the title says Social Security I do not read."

- Nick Politakis

Before Someone Else Decides

Kathleen Rehl | Aug 2, 2026

- Kathleen Rehl

For most retirees, the greatest fear is not death—it is running out of money before they die.

Matt Halperin | Aug 6, 2026

"This is very well framed. thanks"

- Rick Connor

FIFA Financials

R Quinn | Jul 19, 2026

- Mark Ukleja

Manifesto

Aug 9, 2026

NO. 71: WE SHOULD take a broad view of our bond holdings—and include our paycheck, Social Security and other bond-like income streams. Result? We may find we have too much in bonds.

act

Aug 10, 2026

KEEP ENOUGH in cash investments to give yourself a sense of security. It’s tempting to invest as much as possible for long-term growth. But research suggests putting perhaps $5,000 in a savings account or a money market fund can greatly improve our sense of financial wellbeing. If your emergency fund isn’t that large, consider stockpiling some cash.

think

Aug 10, 2026

ENDOWMENT EFFECT. We prize the items we own. We might believe our homes are worth more than they really are and our investments have performed better than they have, making us reluctant to sell. We might also hang on to investments we inherited from our parents, because we endow them with meaning beyond their actual value.

humans

Aug 9, 2026

NO. 41: OUR APPETITE for risk isn’t stable. As we settle on a stock-bond mix, we should ponder how much risk we can reasonably take and how much we can stomach. The first part is easy, but the second part—deciding how much risk we can truly tolerate—is tough. The reason: Our risk tolerance rises as stocks climb, but can evaporate when prices fall.

Money Guide

Manifesto

Aug 9, 2026

NO. 71: WE SHOULD take a broad view of our bond holdings—and include our paycheck, Social Security and other bond-like income streams. Result? We may find we have too much in bonds.

Spotlight: Insurance

Rental Car Runaround

Michael Flack | Mar 15, 2021

IF YOU’VE EVER RENTED a car, you’ll inevitability have heard the collision damage waiver (CDW) sales pitch. It sounds something like this: “I assume you want us to protect you bumper to bumper on the car, right?”
If you say, “yes, please,” then—for anywhere between $10 and $30 a day—the rental car will be covered for losses due to theft or damage, except for damage to certain portions of the car. Hint: Read the fine print.

The Cloth Seller Who Invented Social Security

Mark Crothers | Aug 10, 2025

I’ve always had a deep fascination with maths, and recently, thanks to my retirement and the freedom of time it’s given me, I’ve been conducting a bit of “self-educating” on the topic of actuarial science. During this process, I discovered a little-known but fascinating historical character named John Graunt.
He was a 17th-century cloth seller from London who had a very strange hobby. Before starting his workday, he liked to study the Bills of Mortality, which were weekly records compiled by parish clerks,

Clues Left by a Killer Echo Widespread Anger at Health Insurers

R Quinn | Dec 6, 2024

So reads a Wall Street Journal headline.
This begs the question, how do Americans want to pay for their health care?

They don’t want to spend their money- even for relatively minor expenses like a co-pay
They want someone else to take the risk, but not make any money
They want quality care, but with little idea how to define that other than more of it at high prices
They don’t want high premiums or taxes
They don’t want to wait for care
They don’t want restrictions on accessing care or selecting a provider
They don’t want anyone approving care or denying to pay for it.

Protecting Poppy

Kyle McIntosh | Sep 9, 2021

OUR DOG LIKES SOCKS. A few months after Poppy joined our family, she consumed her first sock. Since then, she’s eaten two more. After the first sock was removed, our veterinarian offered some valuable advice: Get pet insurance because Poppy is likely to do this again. Within a few days, we purchased a policy from Healthy Paws for $38 a month. The policy has proven valuable: We’ve had four other unplanned trips to the vet over the past 21 months.

Hitting Record

Sonja Haggert | Jan 30, 2022

OVER THE PAST TWO years, we’ve seen everything from tornadoes to devastating fires to hurricanes, often at unusual times and in unexpected places. That got my husband and me thinking about how to prepare for what may come our way—and how we could document what we might lose.
We decided to make a home movie. Our new phones are perfect for taking videos. What better proof of what we have? You’ve probably seen the suggestion that you do this,

Ambulatory Ambivalence

Michael Flack | Feb 22, 2026

“Never cross the street when you hear an ambulance coming, it’s very dangerous, because it’s you it’s trying to run down.”
– Ernie Souchak (John Belushi), Continental Divide, 1981
I just returned from “a free, no obligation presentation on how to protect yourself from expensive emergency ambulance bills and related costs not covered by your primary insurance,” or I like to call it, a free steak.
While this may have been my 15th free one,

How Big Is Your Umbrella, Follow-Up

Philip Stein | May 1, 2025

I recently posted a request for comment about the appropriate amount of umbrella insurance one should have. I was hoping to learn of some formula or rule-of-thumb stating that "if your net worth is $X, you should carry $Y of umbrella coverage." As far as I can tell, there is no such formula or rule. Many thanks to those who responded. Mark Eckman wrote that most insurance companies offer a maximum umbrella of $5 million. Patrick Brennan’s insurance representative regarded $500,000 of liability coverage on his auto policy and a $1 million umbrella as sufficient for his needs. John Yeigh indicated that the most common legal settlements are in the $1-2 million dollar range. He personally has $3 million of umbrella coverage. Rob Jennings and David Lancaster both cover their net worth. Edmund Marsh has coverage a step above his net worth. Adam Grossman, in his post Grab an Umbrella, dated May 2, 2021, doesn’t explicitly call for matching umbrella coverage to your net worth. Instead, he asks how large a legal judgement against you might be. He cites one study reporting that most settlements fall in the $1-5 million dollar range. He therefore recommends that your umbrella coverage falls in that range as well. The website www.ramseysolutions.com (affiliated with radio personality Dave Ramsey) recommends carrying umbrella insurance if your net worth exceeds $500,000. Beyond that, your umbrella policy should cover your net worth according to the site. Ultimately, the extent to which your lifestyle exposes you to potential lawsuits (e.g., you have a pool, you coach youth sports, etc.) will dictate what an appropriate level of umbrella coverage is for your needs. My conclusion: If your net worth falls within the $1-5 million range cited by Adam, match your coverage to your net worth. Beyond that, talk to your…

A Profitable Read

Philip Stein | Oct 31, 2023

I RECENTLY FINISHED reading the second edition of William Bernstein’s The Four Pillars of Investing—twice. This new edition is a significant rewrite of the first edition that was published in 2002. Even if you’ve read the first edition, reading the second edition is worth your time. Though I’ve read most of the books written by well-known investment luminaries familiar to HumbleDollar readers, there were still pearls of wisdom I gathered from this second edition. Here are six of my takeaways: 1. Meet Sylvia Bloom. Many HumbleDollar readers are likely familiar with the story of Ronald Read, a humble man from Vermont who worked at a service station and as a janitor. His periodic investments in blue-chip stocks over his working life enabled him to amass a seven-figure portfolio despite his blue-collar income. Bernstein—an occasional HumbleDollar contributor—introduces us to Sylvia Bloom, a legal secretary from New York who, like Read, invested in stocks over her working life. She also amassed a seven-figure portfolio. I’m inspired by stories like these that show how folks of modest means can build significant wealth during their lifetime through patience and perseverance, all the while ignoring the short-term volatility of the stock market. Bernstein cites Charlie Munger, Warren Buffett’s business partner, who admonishes us to never do anything to interrupt compounding. Both Read and Bloom allowed compound growth to catapult them to millionaire status. Some people may claim that dying with a multi-million-dollar portfolio means you never enjoyed the money during your lifetime. But neither Read nor Bloom cared about living more lavishly. Both made generous donations to their favorite charities in their wills. They were satisfied with their modest lifestyles. It was charitable intent that drove them. 2. Stay the course with safe assets. Bernstein argues that it’s important to structure a portfolio with sufficient…

Meet Marcus

Philip Stein | Jun 23, 2024

I have a high-yield savings account and several CDs at Marcus bank, owned by Wall Street powerhouse Goldman Sachs and named after one of its founders, Marcus Goldman. I originally discovered Marcus bank while perusing rankings on bankrate.com. Marcus is an online bank and a member of FDIC. All accounts are insured up to $250,000. Marcus charges no monthly fees. There is no minimum balance to open a high-yield savings account, but a minimum balance of $500 is required to open a CD. Interest is compounded daily and reported monthly. In fact, you begin earning interest as soon as your deposit is received. The yields on my accounts are competitive with the offerings from other banks. For example, as of this writing, both American Express and Capital One offer high-yield savings accounts with an APY of 4.25%. Currently, my Marcus high-yield savings account sports an APY of 4.40%. One drawback: Marcus doesn’t offer checking accounts. You can link your Marcus account to an external bank account to move your money via electronic funds transfer. I linked my Marcus account to my Capital One checking account. I’ve also linked TreasuryDirect to my Marcus savings account to purchase or redeem T-bills. Other potential drawbacks: Marcus does not participate in the Zelle network nor does it have an ATM network. I depend on my Capital One checking account for these features. Because Marcus is not a full service bank, it’s usefulness is limited to anyone wanting to take advantage of its savings products. I’ve found the Marcus web site to have a professional, uncluttered appearance which makes it easy to navigate. If you’re looking for savings products with good yields, you may want to consider Marcus. For more information, simply point your browser at marcus.com.

Cash Ain’t Trash

Philip Stein | Dec 26, 2025

Occasionally, I read a newspaper article or web posting where the author prophesies that digital payment systems will eventually dominate the economy, and cash (currency and coinage) will become obsolete. Not so fast. While the use of digital payment technology is widespread and growing, cash will remain an important backstop in times when digital payment systems fail. And they do fail. Unfortunately, power grids and communication networks aren’t as robust as we’d like to believe. We know that severe weather events can knock out power grids, and software glitches can take down portions of the internet. Electronic payments won’t work when there is no power or no internet communication. Under those circumstances, cash is king. Consider what happened in Texas in February, 2021. Winter storms dealt a blow to the Texas power grid leaving millions of homes and businesses without electricity for over two weeks. During the blackout, people were lined up in freezing temperatures to buy desperately needed groceries, fuel, propane, and other goods. Unfortunately, you couldn’t transact using a credit or debit card because merchant systems were down. But you could purchase whatever you needed with cash. Spain suffered a power outage in June 2025 that caused widespread failures of digital payment systems. Businesses had to rely on cash transactions. A software bug in CrowdStrike’s security software in July 2024 temporarily halted digital payment systems globally. Once again, you could only transact using cash during the outage. During such crises, running to the ATM to get cash won’t help because ATMs are also down. To protect yourself when digital payments are not possible, it behooves you to consider keeping some cash in safe places around the house where it’s readily available during an emergency. We’re not talking about hiding a twenty dollar bill in your sock drawer. You’ll…

Harmful Illusion

Philip Stein | Jan 1, 2024

MANY FOLKS EQUATE a stock market downturn with losing money. I often hear comments like, “I lost money yesterday. The stock market went down.” I believe this impression of loss is an illusion, one that can be detrimental to our financial health—because it blinds us to certain fundamental truths. 1. Illusion of lost money. You only lose money if you sell shares at a loss. If you don’t sell amid a downturn, you still have the same number of shares as before. To the extent those shares pay dividends, that income stream should continue. And if you reinvest those dividends, you’ll be buying more shares at lower prices. While the value of your portfolio may be lower than it was previously, it doesn’t represent a real loss of money if you don’t sell. 2. Temptation to tinker. Behavioral economists have found that we experience the regret of a loss with twice the intensity that we feel the pleasure of a gain. If you believe you’ve lost money in a market downturn, the pain of that illusory loss could tempt you to tinker with your portfolio to either make up the loss or prevent further losses. Such actions rarely benefit investors. You’re more likely to harm yourself because such tinkering is usually an emotional reaction to events—and emotions don’t serve us well when making investment decisions. 3. Increased dividend yields. Dividend yields often rise in the wake of a market downturn. Dividend yield is the amount of the annual dividends divided by the current stock price. Simple arithmetic tells us that when the current stock price declines and dividend payments continue undiminished, dividend yields rise. A rising dividend yield hardly represents a permanent loss of money. 4. Higher expected returns. During a bull market’s euphoria, share prices at elevated levels probably…

Saved by Compounding

Philip Stein | Apr 13, 2023

IF I MADE A LIST of all the dumb things investors do, I likely committed them all. I chased performance, sold stocks in a bear market, invested in things I didn’t understand—you get the picture. Yet, despite the numerous setbacks I suffered before I matured as an investor, I was able to retire comfortably. How was that possible? My conclusion: compound growth. Indeed, I believe compounding is a surer way to wealth than picking market-beating investments. That belief originated with, and was reinforced by, Warren Buffett. The book Warren Buffett’s Ground Rules, written by Jeremy Miller, details lessons to be learned from Buffett’s annual letters to Berkshire Hathaway’s shareholders. The book’s second chapter is devoted to compounding. Here are three highlights from that chapter: 1. “The power of compounded interest is unmatched by any other factor in the production of wealth through investment,” says Buffett. “Compounding over a life-long investment program is your best strategy, bar none.” The words “bar none” jumped out at me. Here is one of the world’s most astute investors saying that compounding trumps stock picking when it comes to building wealth over the long-term. That was an eye opener. One of Warren Buffett’s favorite long-term holdings is Coca-Cola. He started purchasing shares in 1988. Today, it’s the fourth largest holding in Berkshire Hathaway’s portfolio. According to Buffett, “The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million. Growth occurred every year, just as certain as birthdays. All Charlie and I were required to do was cash Coke’s quarterly dividend checks.” I’ve owned Vanguard Total Stock Market Index Fund (symbol: VTSAX) in my taxable account since 1998, and have reinvested distributions and purchased additional shares over the years. In 2022, this one investment yielded more…

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