Short and Sweet

Jonathan Clements

AS I WAS PREPARING for HumbleDollar’s January 2017 launch, my web developer suggested I add a mission statement to the top of the homepage. That mission statement morphed into a daily insight, which then became a daily Tweet that also found its way onto my Facebook page. Like the family that moves from a three-bedroom house to a one-bedroom apartment, I embraced the challenge of shoehorning financial ideas into 140 characters or less.

Twitter has since expanded the allowable character count to 280, but I try to stick to the old 140 limit. I keep a running list of my daily comments and have vague plans to turn them into a book. But for now, here are 41 of those comments—some published, some yet-to-be published—that I hope will inspire, amuse and guide you as we begin 2018:

  1. We get just one shot at making the journey from birth to retirement. Flirting with financial disaster is not advisable.
  2. If you waste money, you can make more. If you waste time, life gets old really fast.
  3. Picking superior investments is a crowded trade. Saving more is an easy win.
  4. What’s the difference between an equity-indexed annuity and an index fund? One needs an army of salespeople. The other sells itself.
  5. Want to feel short? Hang out with people who are tall. Want to feel poor? Hang out with folks who are rich.
  6. If your kids can borrow it or your friends can admire it, it doesn’t count as an investment.
  7. Draw up a list of your greatest pleasures in life. Then ask yourself: Do you need great wealth to enjoy any of them?
  8. If your portfolio isn’t built around broad market index funds, you’ve got to ask yourself one question, “Do I feel lucky?” Well, do ya, punk?
  9. When you’re ill, you realize how great it is to feel healthy. Money’s similar: When you’re broke, you realize how great it is to be solvent.
  10. If you think money managers are overpaid, imagine how much they’d charge if they actually beat the market.
  11. You want investments that you boast about when you sell—but you’re too nervous to discuss when you buy.
  12. A boat is not your financial friend, but a friend with a boat is.
  13. If you keep investing simple and make it understandable, you’ll lose half your audience, who assume success lies in their own befuddlement.
  14. Never confuse the appearance of affluence with affluence. One is the mortal enemy of the other.
  15. We are voracious acquirers of financial information, but mostly to buttress opinions we already hold.
  16. If your children want for nothing, they have too much.
  17. A quick way to lose half your wealth: Get divorced. The slower route: Marry someone with bad financial habits.
  18. If folks claim their home has been a great investment, ask to see their detailed financial records—and their degree in advanced mathematics.
  19. Whenever you open your wallet, you’re voting for one thing, but also voting against something else.
  20. Invest based on dinner seminars, glossy brochures and TV advertisements, and you foot the bill for your own fleecing.
  21. If you think today’s purchase will make you happy forever, you need to spend more time looking through your closets.
  22. Everybody’s a long-term investor when the market is going up.
  23. Is it time to have the talk with your kids? You know, the important one—about how much you’ll help with college costs.
  24. Trying to beat the market is a game for the rich. Only they can afford the inevitable disappointing results.
  25. Want to be free of financial worries? That hinges on the size of your bank account—and the magnitude of your wants and anxieties.
  26. Cash value life insurance isn’t an investment, it’s a religion—and you’ll never meet a more prickly group of disciples.
  27. If you save $5 a day for 40 years by not buying coffee, you’ll miss out on an awful lot of caffeine.
  28. Overconfident investors trade too much, damaging their returns. But heartened by their brokers’ applause, they courageously carry on.
  29. Dollar-cost averaging is for wimps. You’d be amazed how many rich wimps there are.
  30. Forget this year’s stock market angst—and ponder the riches that will accrue to those who can ignore it.
  31. Another year passes and still there are no inductees to the market-timing hall of fame.
  32. It’s hard to know who is less truthful, teenage boys boasting of their sexual conquests—or middle-aged men touting their investment prowess.
  33. What would happen if everybody indexed? Seriously? Are we really worried about a global outbreak of financial prudence?
  34. Good news is bad news: When markets rally, our portfolios may grow fatter—but future returns will likely be lower.
  35. We might retire from the workforce, but we should never retire from the pursuit of a fulfilling life.
  36. Gold is like your crazy uncle at the wedding: He dances wildly—and he dances alone.
  37. Your kids will grow up to imitate your financial habits. Will you like what you see?
  38. If the answer necessitates making a short-term market prediction, you’re asking the wrong question.
  39. The results speak for themselves—and that’s a problem for active money managers.
  40. The big financial risk isn’t dying early in retirement but, rather, living longer than we ever imagined.
  41. Our only earthly immortality will be the recollection of others. Make sure those memories are good.

A morbid aside: I’m able to schedule the new content for HumbleDollar’s homepage well in advance. This allows me to publish updates, even if I’m traveling or on vacation. One result: Should I go under the next bus, new insights will continue to appear at the top of the homepage—as well as on Twitter and Facebook—for months afterward. Thanks to the miracle of technology, it seems we’re now able to be productive, even in death.

Taxing Matters

SHOULD YOU MAKE any changes to your finances in response to the new tax law? Three steps come to mind:

  • Make extra-principal payments on your mortgage. With the standard deduction now so much higher, and the itemized deduction for state, local and property taxes capped at $10,000, all that mortgage interest is likely saving you little or nothing in taxes, as I explained in a recent article.
  • Rethink your strategy for charitable giving. Bunching two or three years’ worth of charitable gifts into a single year may allow you to itemize and get some tax benefit from your generosity. If you’re charitably inclined and over age 70½, also consider qualified charitable distributions from your IRA.
  • Revisit your estate plan. The federal estate tax exclusion has climbed from $675,000 in 2001 to $11.2 million in 2018, plus that exclusion is now “portable,” meaning married couples can potentially bequeath $22.4 million tax-free. Got an estate plan that’s designed to avoid federal estate taxes? There’s a good chance it needs to be revised—or there could be unintended consequences.

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