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Fire the 4% Rule

I DID ACHIEVE financial independence and retire early—if you count age 64 as early. My friend Jose, a true believer in FIRE, or financial independence-retire early, celebrated his retirement at 44. That took a steely nerve that I lacked, plus I had big college bills to pay before retiring.
One big challenge of FIRE, of course, is that your savings might need to last 40 or even 50 years. Vanguard Group recently published a research paper to help FIRE followers go the distance.

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Six Rules for Wealth

IN SEPTEMBER 2014, The Wall Street Journal published a column entitled “The Simple Secret to Building Wealth.” An early paragraph began thus: “Wealth is born of great savings habits.”
As I read along, I found myself not only agreeing, but also wondering if the author had secretly consulted with my wife prior to penning the column. The similarities between his suggestions and our savings habits were striking.
I wrote an email to the author—who,

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We’re Overruled

I BEGAN TRYING TO figure out the laws related to retirement and employee benefits after the enactment of ERISA in 1974. I spent endless hours over many years in lawyers’ offices in Washington, D.C., as each new law or regulation came along.

TEFRA, DEFRA and COBRA are but a few of the many laws that now confound Americans. I bet most people think COBRA was only about health insurance. In fact, it’s the Consolidated Omnibus Budget Reconciliation Act.

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My Eight Rules

I’M AN 81-YEAR-OLD retired radiologist. Early in my medical career, I realized my stock broker was managing my account for his benefit, not mine. I fired him and took charge of managing my own investments.
Today, I have four granddaughters who are starting to invest. Over the years, as I learned more about personal finance, I put together a 130-page financial notebook. My granddaughters probably don’t want to read my lengthy notes, so I decided to put together a one-page summary.

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Rules for the Wedded

ON DEC. 14, MY WIFE and I celebrated 54 years of marriage—not bad for a curmudgeon and the person who’s had to live with him.
Considering that the average marriage in the U.S. lasts seven to eight years and the divorce rate is near 50%, we’ve done pretty well. On top of that, we got married just 10 months after our first date—and I was in the Army for eight of them. I remember receiving a letter from my dad while I was in the Army in which he basically asked,

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Rules for Gift Giving

IT’S THE MOST wonderful time of year—for trying to figure out what gifts to give. If you’re like me, you may be wringing your hands. But some studies and a bit of psychology could help.
While searching my favorite websites for gift ideas, I came across a helpful article by psychologist Jill Suttie. She offered five suggestions.
The first is to make sure the gift is practical. I didn’t see that one coming. Practical gifts are remembered.

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New Rules for Success

FOUR DECADES OF falling inflation and declining interest rates have come to an abrupt halt—and that’s changed the calculus on a fistful of financial decisions.
Want to make smarter money choices in the months and years ahead? Here are seven new rules for financial success:
1. Carrying debt is less foolish—in some cases. Thanks to inflation, families can now repay the money they’ve borrowed with depreciated dollars. That won’t help you with credit card debt,

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Divide and Rule

EACH OF US TAKES our monthly income and then makes countless decisions—some big, some small—about how to use those dollars. How can we get the most from the money that flows through our hands? I find it helpful to look at this “income allocation” through three prisms.
Divvying it up. We can use our income for three main purposes: spending it today, saving it for tomorrow or giving it to others. Our instinct is to spend today,

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The Taylor Rule

IF YOU’VE TRIED TO buy a car or a home recently—or have even just been to the grocery store—I’m sure you’re aware how much prices have jumped over the past year. John Taylor certainly has an opinion on the topic.

Taylor is an economics professor at Stanford University. While not a household name, he’s a leader in economic circles. Before Jerome Powell was appointed Federal Reserve chair in 2018, Taylor was a candidate for that spot.

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Rules for Retirement

WANT A HAPPIER, more fulfilling retirement? You work your entire life to get there, and you want to make the most of the time you’re given. But how? Here are my 10 rules for retirement:
1. Have a purpose and a plan, but be flexible. You might have devoted more than 70,000 hours to your career, so it wouldn’t be a big surprise if your work has become a huge part of your identity.

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Seven Money Rules

I DESCRIBED A SET of ideas last year that I called truisms of financial planning. They’re concepts I’ve found helpful in navigating the world of personal finance. Below are seven more.

1. Jeff Bezos is a bad role model. So are Bill Gates, Elon Musk and pretty much every other billionaire. Of course, they’re all great geniuses, so why would I say that? The problem is how they made their money. In each case,

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Rule Your World

I’VE NEVER BEEN a fan of financial planning rules of thumb. To understand why, consider a common shortcut for choosing an asset allocation: The allocation to bonds in a portfolio, according to this rule of thumb, should equal an investor’s age.

For example, if an investor is 65 years old, his or her allocation to bonds should be 65%. That sounds reasonable—until you realize that Microsoft founder Bill Gates is 65. Should he have the same asset allocation as everyone else his age?

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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).

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Ignoring the Rules

ONE HALLOWEEN, some of my teenage buddies and I were having a great time throwing water balloons at trick-or-treaters. It was a lot of fun—until we got caught. After getting hauled down to the police station for a lecture, and then receiving another one when I got home, I’ve been pretty much on the straight and narrow ever since, including when it comes to money.
Over the years, I’ve discovered various tried-and-true rules of investing and those have been the keys to my success.

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About That 4%

IT’S SCARY TO RETIRE with a pool of money, knowing how you handle it determines your financial security for the next 25 years or so. It must seem even scarier to everyday Americans who don’t think they can count on Social Security.
A recent Tweet caught my eye. It linked to an article about the problems with the so-called 4% rule. As you might recall, the 4% rule states that, if you withdraw 4% of your portfolio’s value in the first year of retirement and thereafter step up the dollar amount withdrawn with inflation,

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