THE MOST GALLING moment came when the notice of a sheriff’s sale was nailed to a tree in our front yard. The message to passersby was all too clear: “Deadbeats live here.”
Except they didn’t. Our house was in foreclosure—but the debts weren’t ours. They belonged to the people we had bought the house from. How did we escape what turned out to be a two-year ordeal? Three words: owner’s title insurance. How did we get caught up in such a mess?
MY WIFE AND I PAID just $234 in federal income taxes on 2021 adjusted gross income of $98,370, giving us an effective tax rate of less than 1%.
How did we end up paying so little? It all started with my October 2020 layoff. I was age 57 and had, until then, enjoyed a 34-year newspaper career. One of my immediate concerns: getting health insurance coverage.
That turned out to be easy in 2021.
Comments
I began researching investing in 1987, when I joined my employer's new 401(k) plan and had additional cash in CDs that I wanted to invest in taxable accounts. A friend recommended Andrew Tobias' "The Only Investment Guide You'll Ever Need." I read other books and financial magazines, and an NPR interviewee cited Fidelity and Vanguard as good fund companies. I tiptoed into the market with a defensive mindset, spreading $3,500 in non-retirement money among four funds: one each at Fidelity, Mutual Series, Neuberger Berman and Nicholas. Obviously, their minimums were tiny. As I have noted here before, I mailed in the checks in the last week of August 1987, not knowing the S&P 500 had peaked on Aug. 25. Two months later ... my in-for-the-long-haul stance kept me invested, and I shoveled money in each month. Within a year, I had added an IRA at Vanguard, where I eventually consolidated our investments. P.S., re Twentieth Century Ultra: I recall in the early 1990s noting in Morningstar's report on the fund that two-thirds of the quarterly returns in the previous five years or so had been double-digit percentages.
Post: No Barriers to Entry by Jonathan Clements
Link to comment from December 27, 2024
“What war did the Boston Tea Party precede,” he answered, “World War II.” ... Well, given the wording, he's not wrong. He could have picked any war in U.S. history.
Post: Spending Tip: Don’t
Link to comment from June 27, 2023
I have used Fidelity Charitable's donor-advised fund for several years, funding it with donations of taxable mutual fund shares from Vanguard, where our investments are. I have one horror story, however: A few years ago, I checked on one such donation a few weeks after requesting it, having heard nothing. Fidelity said they had not received anything, while Vanguard said they'd said it. Where was our five-figure sum? Who knew? The wrong person's FC account? In the ether? Thankfully, Vanguard set up a three-way call, and within 24 hours, Fidelity Charitable's website posted the donation -- without explanation.
Post: Giving Made Easy
Link to comment from January 27, 2023
I, too, am a fan of the Swedroe and Grogan book and have recommended it to others.
Post: Two Decades to Yes
Link to comment from July 25, 2022
Another thing on HSAs: If you leave your employer's plan midyear and switch to coverage that is not a high-deductible health plan, and thus you are no longer eligible for an HSA, your maximum contribution for that year is pro-rated. That is, if you work six months under the HDHP, your HSA maximum is half the normal max. Work 3 months, and it's one-quarter. Etc. So don't unknowingly overfill it.
Post: On Your Way Out
Link to comment from September 23, 2021