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Managing money is not a science, but a social science. People are involved—and that makes matters messy.

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Well That’s A Bummer!

"Olin, countless words and the gleaning of hundreds of worthwhile tidbits picked up on HumbleDollar… could this be the most significant one ever? My endless thanks to you! Lá Fhéile Pádraig sona duit."
- Dan Smith
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Guardianship

"Ed, I hope so too, for your sake. It has been awful. We are hoping the worst is over. She will lose money on her house, since she only bought it 2 years ago, before we knew things were as bad as they were. Luckily Spouse and brother were able to intervene before she lost all her money like her sister did. C"
- baldscreen
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What, Me Worry?

"I just read an article which reports the results of a survey conducted in July 2025 of older adults fear of retirement income. The study found the following, “Aside from Social Security, the only area where a majority of respondents believe (governmental) policy is likely to lead to severe changes in their lifestyle is inflation.”"
- David Lancaster
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Retirement in America is not a pretty picture…and not getting better.

"I’m Not sure how you put away $$$ that isn’t there."
- Nick Politakis
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Forget the 4% rule.

"RQ, I think it comes down to people don’t want to hand over a large sum of money to an insurance company even though it makes sense for some folks."
- Andy Morrison
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Questions Matter

"Thanks, Ed, I will check out the articles after my AARP Tax Aide gig today. IMO, I think our age 30ish brains are better equipped for life decisions than our younger brains are."
- Dan Smith
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How to Lose

MY OLD INVESTING self was like the guy in the meme who twists around to ogle a woman in a red dress, while his girlfriend looks ready to break his neck.

Just as jumping from one relationship to another introduces new risks, the same holds true for jumping in and out of different investments. For me—and for most people, I’d wager—investing in individual stocks and narrowly focused funds involves a certain amount of trading, and we know such trading is an exercise in futility. Even the vast majority of professional fund managers can’t consistently beat the market averages. If your reaction to that is, “Yeah, but maybe I can, I’ve got a good handle on the way the world works,” you may need professional help with your portfolio.

Despite ample evidence that most investors trail the market averages, we all tend to “feel lucky,” like the ill-fated villain staring down Clint Eastwood in Dirty Harry. Why? A key reason: Stock market averages get a big boost each year from a minority of stocks that post big gains, and those huge winners make beating the market look easy. So how about buying those big winners? Unfortunately, yesterday’s winners aren’t necessarily tomorrow’s top dogs.

In fact, past performance has no predictive power. It may seem obvious today that we should have bought Facebook, Apple, Netflix, Microsoft, Amazon, Tesla and Google’s parent company Alphabet. But these “obvious” winners only seem that way in hindsight.

On top of our unjustified confidence in our own stock-picking abilities, we have a host of other behavioral faults, including impatience, a desire for quick gratification and the feeling that the grass is always greener somewhere else. Result? In our efforts to beat the market, we flit back and forth among different investments, as our latest stock picks lose their luster.

After taking fliers over the years on gold and energy funds, biotech and telecom stocks, and emerging markets specialty funds that focus on consumer companies, I’ve learned three key lessons:

  • I’m not lucky.
  • I can’t predict world events or the market’s reaction to them.
  • Undiversified investment bets give me a few ways to win big and a lot of ways to lose.

I came by these lessons the hard way. I would make a new investment and be excited, thinking I’d made a good bet. I’d anticipate my potential gains and the validation that I’d outsmarted the market. I would tell myself I understood the potential downside, but really, I was practically counting my winnings.

But the thrill would soon fade, along with my original investment rationale. Perhaps the idea had come from some legendary portfolio manager or from something I read. But when my new holdings struggled, I lacked a frame of reference by which to decide whether to sell or hold.

A star manager might have said a drug company’s clinical trials were going well or that certain companies were going to gain market share. But then these things didn’t happen, and the stocks underperformed. Was this bad news now fully priced in? It’s nobody’s job on Wall Street to answer that, least of all the managers who touted the investments in the first place, and they probably wouldn’t know anyway.

Another example: About six years ago, I read a series of articles that convinced me that the next big trend was emerging markets consumer spending growth. That prompted me to buy some high-cost niche exchange-traded funds. But the two funds I bought consistently underperformed. One has continued to do so since I sold, while the other folded last May. Again, no one can tell you when or if such performance will turn around. Wall Street gets paid to sell you high-expense funds and keep you in them. Those high fees pay for a lot of research, writing and marketing, which in turn filters its way into the financial press, which then encourages you to buy.

There are two sources of investment risk: systematic risk, which is the danger that the broad market will fall, and unsystematic risk, which is the danger that your particular investments will lag behind the market.

Investors in individual stocks and sector funds face both risks. By contrast, owners of broad stock market index funds face only systematic risk. Indexing lacks the allure of sexy strangers and the prospect of quick investment scores, but the strategy’s risks are also far lower.

Success in broad market-cap-weighted index funds hinges on fewer variables. You just need aggregate share prices—driven ultimately by corporate profit and dividend growth—to rise at well above the rate of inflation, as they have for more than a century in the global stock market, despite two world wars, hyperinflation, stagflation, market crashes, panics and depressions. In other words, with broad stock market index funds, you’re making just one bet—and it’s a pretty good one for globally diversified investors with long time horizons.

William Ehart is a journalist in the Washington, D.C., area. In his spare time, he enjoys writing for beginning and intermediate investors on why they should invest and how simple it can be, despite all the financial noise. Follow Bill on Twitter @BillEhart and check out his earlier articles.

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Is there any point when a child needs financial help that you feel comfortable saying “not my problem?” 

"Thanks, we do enjoy seeing her move forward in life! The Fit is a great little car. I think she'll hang onto it for a long time. We changed the oil last week - an easy job on this car, and only $35 for oil and filter."
- David Mulligan
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What happens to Medicare Supplement coverage when moving to a different state?

"You asked for personal experiences. I resided in North Carolina when I became eligible for Medicare. At that time Plan F was an option, providing very good coverage, and I went with it, and chose a nationally-known carrier with decades of experience and good reputation. A few years later, we moved to Florida. No underwriting needed. No change in monthly fee. The transition was seamless. My same NC insurance carrier is still my Medigap policy-holder. The company is well-known throughout the US, including Florida. My advice is to choose the carrier that is highly-rated in both states. I am so glad I decided to pay monthly for a Medigap plan when I became eligible for Medicare. The older I get, the less I would have wanted to deal with extra recordkeeping, pre-approvals, co-pays,and so on. I can choose a specialist recommended by other trustworthy doctors and friends, make an appointment, and easily schedule what I need."
- Chris G
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Frugal Fitness

AS A PHYSICAL therapist, I’ve spent a large slice of each work day teaching and encouraging patients as they exercise their way to better health. Along with other elements of treatment, each patient pays for a custom exercise program tailored for their specific problem. These are folks looking for a way past the debilitating effects of injury or disease. Even so, many of them find it hard to follow my plea to “do your exercises”. If they struggle to follow the helpful recommendations of a health professional, what about the rest of us? Over the years, I’ve found that most of us have at least an inkling of the health benefits of exercise. Still, like my patients, we often fail to act on that knowledge. Why? Maybe we can find the answer in the list below. Here are five common barriers that I’ve heard keep people idle: 1. No time. I’m sure it’s true. Long commutes, lengthy work days and activity-packed weekends leave little chance to carve-out a few minutes for our physical health. Even in retirement, time can be siphoned-off by the endless list of errands, obligations and leisure pursuits that keep us running. 2. No knowledge. Strange environment. Strange vocabulary. Strange people who seem at ease and know more than us about everything. That’s the challenge facing the novice exerciser stepping into the gym for the first time. It can lead to fear–fear of embarrassment, fear of injury or just fear of feeling lost. 3. No support. Going against the social flow can be painful for the lone exerciser. Choosing to head into the gym, rather than out for pizza and beer with friends can be hard. Or, maybe our spouse thinks exercise time is selfish time. Like exercise, social connections are important for health as well. Ideally, we shouldn’t have to choose one over the other. 4. No money. Let’s face it, gym admission isn’t free, and a home equipment purchase can quickly run into thousands of dollars. That price is no sweat for a fitness aficionado with extra cash who’s hooked on the exercise habit, but what about the newbie? Few people want a gym membership or treadmill gathering dust, reminding them of the resolution they didn’t keep. 5. No energy or motivation. Hectic schedules leave many of us drained and dreaming of a quiet moment to just be still. Other folks find themselves stuck in a sedentary rut, never straying off the path that leads from one seat to the next. For those in either camp, any thought of pumping iron or pounding pavement holds no appeal. That’s my short, anecdotal list of hurdles hindering folks from launching into a new exercise routine. For an in-depth look at more barriers to physical activity for adults over age 70, check out this systematic review of the research literature. Meanwhile, our bodies are missing the movement that keeps them healthy. What to do? Here are five baby steps to help us past the roadblocks listed above: 1. Minutes matter. It’s easy to get hung up on the notion of needing a set routine of exercises performed within a solid block of time. That may be ideal, but it’s not necessary. We can try weaving convenient exercises into the actual fabric of our lives. By the end of our day, a few, short bouts of five to ten minutes each can add up to meaningful progress toward fitness. 2. Study time. The online world abounds with exercise advice. Experts promise results ranging from building a healthy heart to gaining the perfect glutes. The choices can be overwhelming. I recommend starting tiny. The simple routine I’ve included below can help nearly anyone take the first step. 3. New network. I’m not recommending we dump our motionless friends. Still, our moms warned us about spending too much time with the wrong crowd. Think about who in our circle is already doing a little exercise. Maybe they’d like a partner? Or, maybe there’s someone we could recruit with just a little nudge. 4. Frugal fitness. We don’t have to shell out bucks to a gym to get a workout. Any time we move our body against the force of gravity, we’re exercising. With a little thought, we can round up a robust routine of exercises to perform at home with little or no equipment. Read on to find a starter set of exercises for the true beginners among us. This list costs almost no money and just a little time. 5. Finding a cause. Stuck for a stimulus that rouses us to action? Remember, imagination is often stronger than willpower. Letting our thoughts dwell on the end game can often be helpful. Do we want to cut a fine figure? If so, we don’t have to get swimsuit-svelte to claim success. Even a little slimming and toning from exercise can give our normal clothes a nicer fit. How about feeling better? Researchers from Boston University and the University of Massachusetts found that even a low-intensity exercise program can help older adults improve both physical and psychological fitness. And their study doesn’t stand alone. Reams of other research support their findings, and highlight even more benefits from exercise. Still, on some days, the only force that will get us moving is old-fashioned discipline. It’s the same determination that moves most of us reading this to make better financial choices most of the time. No matter what our motivation, nearly all of us can kick off our trek to better health today with the following routine: 1. Wall push-ups. Stand facing a wall at fingertip distance. With arms held straight at shoulder height, place your palms on the wall a little more than shoulder-width apart. Bend your elbows until your nose almost touches the wall. Push back until your elbows are straight. Repeat until you’ve done 10-20 repetitions. When wall push-ups are too easy, progress to push-ups with your hands against a counter. These exercises strengthen the muscles of your chest, shoulders and arms. 2. Shoulder blade squeeze. Sit or stand and place palms together in front of your chest with elbows bent and pointing down toward your feet. Pull your arms apart while keeping your elbows down until you squeeze your shoulder blades together. Do 10-20 repetitions. To progress, add the resistance of an elastic exercise band. This exercise works the muscles of the upper back. 3. Sit to stand. This is a wonderful exercise for buttock and thigh muscles. To begin, sit at the edge of a firm seat. Lean forward from the hips, then stand up without using hands, if possible. Sit down and repeat for 10 or more repetitions. You should stay balanced, with feet in full contact with the floor, during the entire exercise. 4. Calf raises. Stand with your hands on a counter to maintain balance, Rise up on your toes for 20 repetitions to strengthen the muscles on the back of your lower legs. These muscles are important for walking and balance. 5. Easy crunch. Lie on your back on the floor or bed with your knees bent and feet flat on the supporting surface. Slowly curl your trunk forward as you try to touch your knees with your hands, then slowly return to the starting position. Do 10-20 repetitions to strengthen your abdominal muscles, one important part of your muscular “core”. The last five. This exercise requires a decent set of walking or running shoes. Begin by walking out the front door and up the street for five minutes at a brisk pace. Stop and retrace your steps for the return trip back home, for a total of ten minutes of heart-rejuvenating activity. Will this workout ready us to run a marathon or toned-up to star in the senior sports league? No. Could it be better? Probably. Still, nearly every muscle–including the heart–gets a little work. And it may just draw us into a habit that keeps our bodies sturdy enough to enjoy the years ahead. Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, “Are you saving for retirement?” Check out Ed’s earlier articles.
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Well That’s A Bummer!

"Olin, countless words and the gleaning of hundreds of worthwhile tidbits picked up on HumbleDollar… could this be the most significant one ever? My endless thanks to you! Lá Fhéile Pádraig sona duit."
- Dan Smith
Read more »

Guardianship

"Ed, I hope so too, for your sake. It has been awful. We are hoping the worst is over. She will lose money on her house, since she only bought it 2 years ago, before we knew things were as bad as they were. Luckily Spouse and brother were able to intervene before she lost all her money like her sister did. C"
- baldscreen
Read more »

What, Me Worry?

"I just read an article which reports the results of a survey conducted in July 2025 of older adults fear of retirement income. The study found the following, “Aside from Social Security, the only area where a majority of respondents believe (governmental) policy is likely to lead to severe changes in their lifestyle is inflation.”"
- David Lancaster
Read more »

Retirement in America is not a pretty picture…and not getting better.

"I’m Not sure how you put away $$$ that isn’t there."
- Nick Politakis
Read more »

Forget the 4% rule.

"RQ, I think it comes down to people don’t want to hand over a large sum of money to an insurance company even though it makes sense for some folks."
- Andy Morrison
Read more »

Questions Matter

"Thanks, Ed, I will check out the articles after my AARP Tax Aide gig today. IMO, I think our age 30ish brains are better equipped for life decisions than our younger brains are."
- Dan Smith
Read more »

How to Lose

MY OLD INVESTING self was like the guy in the meme who twists around to ogle a woman in a red dress, while his girlfriend looks ready to break his neck.

Just as jumping from one relationship to another introduces new risks, the same holds true for jumping in and out of different investments. For me—and for most people, I’d wager—investing in individual stocks and narrowly focused funds involves a certain amount of trading, and we know such trading is an exercise in futility. Even the vast majority of professional fund managers can’t consistently beat the market averages. If your reaction to that is, “Yeah, but maybe I can, I’ve got a good handle on the way the world works,” you may need professional help with your portfolio.

Despite ample evidence that most investors trail the market averages, we all tend to “feel lucky,” like the ill-fated villain staring down Clint Eastwood in Dirty Harry. Why? A key reason: Stock market averages get a big boost each year from a minority of stocks that post big gains, and those huge winners make beating the market look easy. So how about buying those big winners? Unfortunately, yesterday’s winners aren’t necessarily tomorrow’s top dogs.

In fact, past performance has no predictive power. It may seem obvious today that we should have bought Facebook, Apple, Netflix, Microsoft, Amazon, Tesla and Google’s parent company Alphabet. But these “obvious” winners only seem that way in hindsight.

On top of our unjustified confidence in our own stock-picking abilities, we have a host of other behavioral faults, including impatience, a desire for quick gratification and the feeling that the grass is always greener somewhere else. Result? In our efforts to beat the market, we flit back and forth among different investments, as our latest stock picks lose their luster.

After taking fliers over the years on gold and energy funds, biotech and telecom stocks, and emerging markets specialty funds that focus on consumer companies, I’ve learned three key lessons:

  • I’m not lucky.
  • I can’t predict world events or the market’s reaction to them.
  • Undiversified investment bets give me a few ways to win big and a lot of ways to lose.

I came by these lessons the hard way. I would make a new investment and be excited, thinking I’d made a good bet. I’d anticipate my potential gains and the validation that I’d outsmarted the market. I would tell myself I understood the potential downside, but really, I was practically counting my winnings.

But the thrill would soon fade, along with my original investment rationale. Perhaps the idea had come from some legendary portfolio manager or from something I read. But when my new holdings struggled, I lacked a frame of reference by which to decide whether to sell or hold.

A star manager might have said a drug company’s clinical trials were going well or that certain companies were going to gain market share. But then these things didn’t happen, and the stocks underperformed. Was this bad news now fully priced in? It’s nobody’s job on Wall Street to answer that, least of all the managers who touted the investments in the first place, and they probably wouldn’t know anyway.

Another example: About six years ago, I read a series of articles that convinced me that the next big trend was emerging markets consumer spending growth. That prompted me to buy some high-cost niche exchange-traded funds. But the two funds I bought consistently underperformed. One has continued to do so since I sold, while the other folded last May. Again, no one can tell you when or if such performance will turn around. Wall Street gets paid to sell you high-expense funds and keep you in them. Those high fees pay for a lot of research, writing and marketing, which in turn filters its way into the financial press, which then encourages you to buy.

There are two sources of investment risk: systematic risk, which is the danger that the broad market will fall, and unsystematic risk, which is the danger that your particular investments will lag behind the market.

Investors in individual stocks and sector funds face both risks. By contrast, owners of broad stock market index funds face only systematic risk. Indexing lacks the allure of sexy strangers and the prospect of quick investment scores, but the strategy’s risks are also far lower.

Success in broad market-cap-weighted index funds hinges on fewer variables. You just need aggregate share prices—driven ultimately by corporate profit and dividend growth—to rise at well above the rate of inflation, as they have for more than a century in the global stock market, despite two world wars, hyperinflation, stagflation, market crashes, panics and depressions. In other words, with broad stock market index funds, you’re making just one bet—and it’s a pretty good one for globally diversified investors with long time horizons.

William Ehart is a journalist in the Washington, D.C., area. In his spare time, he enjoys writing for beginning and intermediate investors on why they should invest and how simple it can be, despite all the financial noise. Follow Bill on Twitter @BillEhart and check out his earlier articles.

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Free Newsletter

Get Educated

Manifesto

NO. 36: WE SHOULD consider working at least part-time into our late 60s and possibly beyond. That’ll not only help financially, but also it can bring a sense of purpose to our retirement.

act

ROUND UP the mortgage check. If you’re paying $1,512 a month, send the mortgage company $1,600 instead. It’s a painless way to increase savings, the extra $88 a month could allow you to pay off your mortgage years earlier and you’ll earn a pretax return equal to your mortgage’s interest rate. That return could be higher than you can get with high-quality bonds.

humans

NO. 69: WE'RE typically happier when we have regular contact with others. Eating at a restaurant or going to a concert is more fun with a companion. Those who are married tend to say they’re happier, while widowhood can devastate happiness. Indeed, a robust social network is associated not only with greater life satisfaction, but also greater longevity.

Truths

NO. 6: SAVE WHEN you’re young—and you’ll enjoy big cost savings later. If you salt away money in your 20s and quickly amass a modest nest egg, you won’t just clock decades of investment gains. You can also cut your cost of living by, say, raising your insurance deductibles, borrowing less, and avoiding bank fees for low account balances and bouncing checks.

Great debates

Manifesto

NO. 36: WE SHOULD consider working at least part-time into our late 60s and possibly beyond. That’ll not only help financially, but also it can bring a sense of purpose to our retirement.

Spotlight: Investing

Interest Rates Battle

EARLIER THIS WEEK, the Federal Reserve’s Open Market Committee met and decided to lower interest rates by a quarter-point. This immediately sparked a war of words.
At a press conference, Fed chair Jerome Powell took a swipe at the White House, blaming the president’s new tariff policies for an uptick in inflation.
President Trump wasted no time in responding. All year, he has been lobbying Fed officials to move rates lower. And while they have been taking steps in that direction,

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AI Rally Market Risks

LAST WEEK, OPENAI founder Sam Altman sat down for an interview with venture capitalist Brad Gerstner and Microsoft CEO Satya Nadella. Both are investors in OpenAI, so it seemed like a friendly audience. But Gerstner posed a question that seemed to make Altman uncomfortable.
Since introducing ChatGPT three years ago, OpenAI has posted impressive growth, but Gerstner wondered whether the company was, nonetheless, getting ahead of itself.
“How can a company with $13 billion in revenues make $1.4 trillion of spend commitments?” Gerstner asked.

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Hedge funds, venture capital. private equity, etc. in a 401k. BAD IDEA!

President Trump signed an executive order Thursday 8/7 to allow 401(k) participants to invest in private  assets.
The directive instructs the Department of Labor and the Securities and Exchange Commission to draft guidance for defined-contribution plans to incorporate private-market investments, including private equity, venture capital, hedge funds, real estate, and possibly gold and crypto.
Plan sponsors are not required to offer these investments-and I hope they don’t. This is a bad, short-sighted idea.

That’s all we need in 401k plans,

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How to Beat the Market

ANDREW CARNEGIE USED to say that competitors were welcome to tour his factory, to see his production line up close. Why? Because of Carnegie Steel’s massive scale and complex operations, he was confident no one would ever be able to replicate what he’d built.
Hedge fund manager Seth Klarman is a modern-day Carnegie. Klarman founded the Boston-based Baupost Group in 1982, and while performance numbers aren’t publicly available, the firm’s track record is believed to be among the best in the industry.

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How I Use a Simple Analogy to Teach Investing

Jonathan Clements, through his decades of work and his recent “Getting Going on Savings Initiative,” has inspired countless people—including me—to think about how to empower the next generation. The initiative’s core mission is to give young adults a tangible head start by funding their Roth IRAs, a concept that perfectly aligns with the most important lesson I’ve ever learned about money: time is a young adult’s greatest asset.
For many years I’ve been that person who talks to younger people about saving for retirement and investing for their future.

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The Benefits of 401(k)

I WAS HAPPY to read in The Wall Street Journal that 401(k) plans are “minting a generation of moderate millionaires.” I spent the last two decades of my professional life promoting 401(k) plans to workers, so the news felt like validation.
Moderate millionaires were loosely defined as coupon-clippers with seven figures. Sound familiar? It should to many HD readers. At Fidelity, a record 654,000 investors had a million or more in the 401(k) in the third quarter of 2025.

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Spotlight: Housley

Our Special Relationship

A Family Correspondence. Letter from the Son… Dear Mom and Dad, When I stormed out of your house, I was furious. It just didn’t seem fair that you taxed me for my morning tea—especially when it wasn’t even that good. In hindsight, it was probably a blessing. I switched to coffee, which at least wakes me up before my workday rather than lulling me back to sleep. Of course, it didn’t help that a few years later you burned down my house. It was such a nice, pretty White House, too. Took me ages to rebuild. Did you hear we’ve rebuilt it and we’re adding a ballroom? You should come visit when it’s finished—though please leave the matches at home this time. Looking back, the events we endured together were not easy. We bled, we argued, we made mistakes—but we also stood shoulder to shoulder when it mattered most. Those sacrifices still ache in our bones, though they’ve done much for the rest of the neighborhood. Time has a way of softening grudges. At Thanksgiving dinner this year, we raised our glasses to our “special relationship.” We were grateful that we still speak the same language—mostly. I confess, I once worried you might be forced to swap Shakespeare, but thanks to our teamwork, Hamlet still soliloquizes in English. These days, I have my own house, my own family, and my own bills. You taught me well: I not only charge my kids rent, I’ve introduced them to the fine tradition of “taxation without representation.” They grumble, of course—but I remind them that’s how I was raised. And yes, I still visit. We bicker, we reminisce, and then we go back to saving the world together—because let’s face it, no one else will do it properly. Love, Your sometimes-rebellious but always…
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Average vs. Humble Average

No one describes themselves as average at anything. We’re above-average drivers. Above-average parents. Above-average judges of character. Statistically, that can’t be true—but it’s how we think. Investing is no different. The average investor almost always believes they are above average. They read. They pay attention. They try to make smart decisions. And yet, year after year, investors as a group earn returns that fall short of the market itself. That raises a simple but uncomfortable question: What’s the difference between earning the market’s average return and earning the return of the average investor? Two Very Different “Averages” When we talk about average in investing, we usually mean one of two things: The market average The average investor They sound similar. They are not. The Market Average The market average—think of the S&P 500—is “average” only in the sense that it owns everything: Every sector Every style Every winner and every loser When you look at long-term sector performance charts, the S&P 500 is never at the top and never at the bottom. Because it owns every sector, it must fall between the extremes. What looks like mediocrity is actually design. The index doesn’t chase leadership or flee weakness. It simply holds everything and lets time do the work. The market average: Never chases performance Never panics Never second-guesses itself Rebalances automatically Its advantage doesn’t come from prediction or insight, but from limiting mistakes. The Average Investor The average investor, by contrast, is very human. They: Chase recent winners Sell laggards just before recoveries Trade too often React to headlines Confuse activity with progress Ironically, the average investor rarely earns the market’s average return. Not because they lack intelligence—but because they make predictable behavioral mistakes. The tragedy isn’t that investors get average returns. It’s that most don’t. Sector Chasing in Action…
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Everything About Retirement on a 3×5 card

Here's the 3x5 card challenge: Summarize everything essential for retirement on a 3x5 card, and then share your summary here. For the sake of this post, please limit your advice to eight to ten bullet points. This is the first in a series of posts on: Everything You Need to Know on a 3x5 Card. Have fun… Bill
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Does My Sister Need a Financial Advisor?

My sister called and asked if she should get a financial advisor. Her question made me pause, because I’ve wondered the same thing myself. How “right” do you have to be when you invest? How much better does an advisor need to be to make up for their fee? Is it more important to pick the right investments or to be tax-efficient? And if I’ve managed to stay the course through market storms, do I even need an advisor at all? So, I asked AI — and here’s what came back, along with what I learned as I compared its logic to real life. How Right Is Right Enough? AI: You don’t have to be perfect to succeed at investing — just disciplined. If you’ve stayed the course through market downturns and used broad-based index funds, you’ve already solved the hardest part. Markets reward patience more than cleverness. But be honest: when markets fell 20%, did you feel a strong urge to sell before things got worse? If you truly stayed the course, you may not need an advisor. But if you felt panic rising, that’s a sign you should probably find one before the next downturn. Me: My sister never looks at her investments, so she’s never tempted to sell. I look more often than I should, but I tend to buy on dips. Between the two of us, we’ve both stayed steady—one by ignoring the noise, the other by leaning into it. The point goes to self-directed investing for both of us. Sometimes doing nothing—or calmly doing the opposite of the crowd—is the best financial advice of all. The 1% Question AI: Most advisors charge around 1% of assets under management. Over 25 years, that fee can reduce your ending balance by about 20%. To earn that back,…
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My Favorite Websites

Portfolio Back Test: https://www.portfoliovisualizer.com/analysis Calculators: Retirement, How long will my money last, Etc. https://www.saving.org Compound calculator: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator Sector Performance: https://www.barchart.com/stocks/market-performance https://novelinvestor.com/sector-performance/ Fund overlap: https://www.etfrc.com/index.php Can you add to my list?
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The Victim Might Be You

Who Is the Victim of a Ponzi Scheme? Age: Often 50 or older, particularly retirees looking for stable income or to preserve capital. Education: Many victims are college-educated—some with advanced degrees. Financial Status: Typically middle to upper-middle class, with meaningful retirement savings or liquid assets. Investment Experience: Usually have some experience, but not deep technical knowledge—confident, but not always skeptical. Sounds like a typical HumbleDollar reader, doesn’t it? Each year, 20 to 40 Ponzi schemes are uncovered in the U.S., though the true number may be higher due to underreporting and undetected cases. Based on historical patterns: Small schemes are usually exposed within 1 to 3 years. Mid-sized schemes tend to last 3 to 5 years. Large-scale frauds can run unchecked for 10 to 20 years. Notable examples: Bernie Madoff: Operated for 17–20 years, defrauding investors of an estimated $65 billion (including fictional profits). Allen Stanford: Ran a 15–20 year scheme involving about $7 billion in losses. Tom Petters: Lasted roughly a decade, with losses around $3.65 billion. If we assume 30 schemes are discovered each year and each one lasts around 5 years, that implies there may be about 150 active Ponzi schemes in the U.S. at any given time. With each scheme affecting 50 to 200 people, that puts an estimated 7,500 to 30,000 people currently invested in active Ponzi schemes—completely unaware their money is at risk. How Much Do Victims Lose? Typical individual losses range from $20,000 to $100,000, though some victims—especially retirees or those targeted by trusted advisors—lose far more. In 2020 alone, over $3.5 billion in losses were tied to reported Ponzi schemes, according to data compiled by regulatory agencies and sites like Ponzitracker.com. In larger schemes, victims have lost entire retirement accounts, life savings, or in some cases, millions. Who Are the Schemers? Ponzi…
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