Jonathan Clements

WHEN I STARTED writing about personal finance in the late 1980s, my focus was on giving “actionable” money advice. Here, at the end of my career, I’m more interested in offering thoughts that’ll help folks with all areas of their life, financial and otherwise.
I’m not sure how many articles I have left in me. Fingers crossed, it’ll be many more than my current diagnosis suggests. But whatever the case, here are four thoughts that I’d like readers to remember:
1.

WE’RE ALWAYS STRIVING—the next pay raise, the next consumer purchase, the next self-improvement goal. But to what end?
Our time on this earth is fleeting, our impact minimal and our legacy quickly forgotten. A decade after we’re gone, we might be remembered by family and close friends, but not by many others. And yet we keep pushing forward.
Does death’s approach shed any light on this curious behavior? Far from it. If anything,

MANY FINANCIAL IDEAS are tough to embrace. But perhaps the toughest can be summed up in one simple word: enough.
Will we ever feel like we have enough and that we’ve accomplished enough? Accepting that we have enough and done enough might seem like worthy goals, a serene acceptance that’s possible for those at peace with themselves and the world around them. Indeed, for many, “retirement” and “enough” seem to be pretty much synonymous,

WHICH FINANCIAL dangers should we focus on? The possibilities seem pretty much endless. In fact, five years ago, I decided to make a list—and ended up offering readers 50 shades of risk.
Yet our notion of risk used to be far more circumscribed.
In the late 1980s, when I started writing about personal finance, insurance was considered important, but it wasn’t much discussed. Instead, the only risk that seemed to merit serious analysis was investment risk,

I LIKE TO THINK I’M rational in the way I spend my dollars, and I suspect most readers do, too.
We are, of course, deluding ourselves.
Spending is never simply about buying what we want or need. Instead, behind every dollar that leaves—or doesn’t leave—our wallet is a complex mental dance that reflects how we feel that day, the influence of others, how we want to be perceived, and our own financial history. We might declare that we’re using our money to buy happiness.

IT’S THE ONE ASSET we’re all born with, and it pretty much defines our financial life. I’m talking here about our human capital, our ability to pull in a paycheck.
That paycheck—or the lack thereof—drives our ability to save, service debt and take investment risk. It also dictates our insurance needs and how much emergency money we should hold. Put it all together, and our human capital should arguably determine how we manage our money over our lifetime.

I MOVED FROM LONDON to New York City in 1986, when I was age 23. That’s when my financial education truly began.
I’d previously studied economics for three years and spent a year writing about the international financial markets for Euromoney magazine. Still, I knew almost nothing about investing, insurance, homeownership and other topics crucial to managing a household’s finances.
I’ve learned a ton since, and the focus of that education keeps changing,

RETIREES ENDLESSLY debate how best to draw down their retirement savings, and yet it all comes down to two simple rules: Don’t spend too much each year, and don’t sell stocks during down markets.
How do we put these two rules into action? Retirees can pick from a host of withdrawal strategies, including the five popular choices listed below. You’d likely fare just fine with any of the five strategies—but that doesn’t mean you shouldn’t pick carefully.

I’VE SPENT MUCH OF MY life trying to better understand the world, especially the financial world. But I wonder whether I should have spent more of that time trying to better understand myself.
Why do some financial situations scare us, while others leave us unperturbed? Why do we spend time and money in ways we later regret? Why do we find our bad habits so difficult to change? Why do we admire some folks,

IT’S SEVEN MONTHS since I received my terminal diagnosis. Cancer is now the reality that looms over each day, and it’s been a rocky road, though the latest abdomen scan suggests I’ll be around for a while longer.
Where’s my head at? Here are four questions I’ve been asking myself—questions, I suspect, that might also be interesting to those who aren’t facing a terminal diagnosis.
1. Am I afraid of dying? No,

I’M WRAPPING UP MY final big investment. Going into it, I knew it would lose money, unleash unwanted disruption and chew up time when it’s never been more precious—and yet I still went ahead.
As readers might recall, last year, Elaine and I remodeled the kitchen in our Philadelphia home. This year, we decided we’d revamp the upstairs bathroom, despite my cancer diagnosis and the forecast that I might live just 12 more months.

THE STOCK MARKET HAS been one of my life’s enduring interests. No, it’s not because I try to pick market-beating investments. I gave up on that nonsense more than three decades ago.
Rather, I’m fascinated by the way we humans engage with this maddening market that promises both riches and peril, and which seems both ruthlessly efficient and utterly nuts. What have I learned from a lifetime of following the stock market? The sad truth is,

MANAGING MONEY IS about managing risk. But which risks? We all have a different collection of financial worries, and that drives the investments we buy and the insurance we purchase.
Problem is, every choice we make comes with a tradeoff. If we seek to fend off one risk, we often open ourselves up to other dangers. Consider five such tradeoffs:
1. Dying young vs. living long. When should we claim Social Security?

I FEEL GRATITUDE for the life I’ve had. But that doesn’t mean I don’t have a few regrets: Friendships that turned sour or simply faded away. People who died before I got to see them one last time. Professional endeavors where I felt I could have done better. Purchases I made that didn’t live up to my expectations.
But my list of regrets has three glaring omissions.
First, it doesn’t include any of the investments I’ve made.

IT’S AN ARGUMENT I’ll never win. But perhaps I can sow a few seeds of doubt.
The anti-foreign-stock drumbeat has grown louder with each additional year that international markets underperform U.S. shares. Indeed, even though foreign stocks beat U.S. shares in the 1970s, 1980s and 2000s, there are folks today who argue there’s no reason to own foreign shares.
Really? Before you throw in the towel, ask yourself six questions:
1. If U.S.

THE TOUGH PART COMES last.
Saving for retirement is pretty straightforward: You sock away as much as you can, favor stock funds, diversify broadly, keep investment costs low and make the most of tax-advantaged retirement accounts. By contrast, paying for retirement can involve mind-boggling complexity—and a big reason is the tax code.
The good news: Once you quit the workforce, you have a fair amount of control over your annual tax bill, especially if you aren’t yet taking required minimum distributions (RMDs) from your traditional retirement accounts,

WHEN HANNAH AND HENRY were children, I talked a lot about money. This was partly self-preservation: It would have been embarrassing if the kids of a personal-finance columnist grew up to be financial ne’er-do-wells.
Fortunately, they didn’t. Hannah and Henry are now in their 30s. Both have good financial habits, and today I typically don’t talk to them about money except when they have questions. Still, given my cancer diagnosis, perhaps a few final reminders are in order—13,

I MAY NOT BE THE best source of retirement advice. After all, I’ve called myself semi-retired for a decade and yet, faced with a grim medical diagnosis, I continue to work far too hard. Moreover, even if I opt to fully retire—which is doubtful—cancer will likely ensure my retirement will be all too brief.
On the other hand, I do run a website devoted to retirement issues, and that means I spend a lot of time reading and thinking about the topic.

I TURN AGE 62 IN January—which means I could claim Social Security retirement benefits and perhaps collect at least a few monthly checks before I succumb to cancer.
But is that the smartest strategy? One of my top priorities is ensuring Elaine is financially comfortable after I’m gone, so I want to make sure she gets as much from Social Security as possible.
We got married in late May, a few days after I was told I had lung cancer that had metastasized to my brain and elsewhere.

AT A FAMILY DINNER in the early 1980s, I remember one of my brothers—probably then age 20 or so—saying, “But isn’t the economy built on sand?”
My economist stepfather offered one of his trademark droll responses: “The economy’s always built on sand.”
The same could be said for the stock market. In the minds of many investors, it’s always teetering on the verge of collapse. After two years of rising share prices, and amid concerns about high stock valuations,

FOUR MONTHS AGO, I was told I might have just a year to live. It’s been a whirlwind ever since.
I’ve been inundated with messages from acquaintances and readers, gone to countless medical appointments, my diagnosis has received a surprising amount of media attention, I’ve been hustling to organize my financial affairs, and Elaine and I have taken two trips.
Where do things stand today? Here’s what’s been going on.
Medical update. After three radiation treatments to zap the 10 cancerous lesions on my brain and an intense opening round of infusion sessions,

HERE’S A FINANCIAL topic on which I claim scant expertise: spending. Still, I’ve belatedly been getting a lot of practice.
Over the past four years, I’ve spent more freely than at any time in my life. While part of it might be explained by post-pandemic splurging, mostly it’s because I finally convinced myself that I had more than enough saved for retirement. Added to that has been my recent cancer diagnosis, which has prompted Elaine and me to take our spending to a whole new level,

WE ALL HATE LOSING—and life, alas, is full of it.
I’m not just talking about investment losses. There are the career successes we never had, the relationships that didn’t pan out and the purchases that fell short of our expectations. Almost all of us, I suspect, can recall countless situations that turned out less gloriously than we’d initially hoped.
Yet, even though my failures pain me, they don’t stop me from getting up each day and trying again.

I’M RELUCTANT TO ADMIT that HumbleDollar is run using smoke and mirrors. But if someone said that, I’d be hard-pressed to disagree.
I’ve long believed that the principles of sound money management are pretty timeless. What you should be doing with your money this year isn’t a whole lot different from what you should have been doing last year, and the year before that, and the year before that.
This notion is baked into how much of the site operates.

MY FIRST REACTION ON hearing my cancer diagnosis: I’m okay with this. My reaction a few hours later: I’m being self-centered.
My time is short, though how short remains an open question. Still, my truncated life expectancy makes something of a mockery of my pre-diagnosis comments about how we should view retirement not as the finish line, but rather as the beginning of a journey that might last two or three decades and perhaps account for almost half of our adult life.

WE MAKE CONSTANT tradeoffs as we allocate our time and money across our life’s many competing demands. What if we feel like all is not right in our world? We may be confronting the seven choices below—and favoring one option at the expense of the other, leaving us with what feels like an unbalanced life.
1. Between doing what we should and doing what we want. Here, I’m thinking about taking care of ourselves physically.

THE OLDER WE GET, the easier it is to see the progress we’ve made, both as individuals and as a society. But I’m not just thinking about personal wealth, higher standards of living, better health care and extraordinary technological advances.
As I look back, I also see impressive progress in our financial thinking. Here are eight notions that were conventional wisdom half a century ago—but which today aren’t universally accepted and, in my estimation,

DEATH AND TAXES are inevitable—and, as I keep getting reminded, also inextricably entwined.
I’m not so fortunate that I need worry about federal estate taxes. That privilege belongs to those who die with $13.61 million in 2024. But that doesn’t mean the taxman isn’t hovering over my demise, raising a host of lesser issues.
Paying the piper. Over the past few years, my focus has been on making big Roth conversions while staying within the 24% federal income-tax bracket.

FIRST WAS THE VOICE of my father’s friend. Then a policeman came on the line. While riding his bicycle, my 75-year-old father had been struck and killed by a speeding driver.
That was 2009. There were no goodbyes. Instead, seared into my memory are the photograph I was shown at the hospital, so I could identify my father’s body, and the details in his final medical report, which I never should have read.
My death will be far different.

WE MAKE FOREVER PLANS—and often end up shredding them in a few short days.
Think of the folks who hike their portfolio’s allocation to stocks, only to turn tail when the next market downdraft reminds them of their true risk tolerance. Or the families who are forced to move because of a job change, or the arrival of children, or the need to help aging parents. Or me, who thought he might have 30 more years,

RETIREMENT BRINGS with it a host of questions. The No. 1 question: Do we have enough for a financially comfortable retirement?
It’s an issue that’s no longer relevant to me, but it’s certainly relevant to my wife Elaine and to almost all HumbleDollar readers. But that fundamental question is just the beginning.
There’s a host of other retirement questions we ought to ask ourselves—about whether we have the right investment mix, how we’ll spend our time,

WHO HAS TIME TO die? I never realized death would be so busy.
I thought I had my financial affairs in good order. But in the two months since my cancer diagnosis, I’ve made countless financial tweaks, mostly with a view to making things easier after my death for my wife Elaine and my two children.
Here are just some of the steps I’ve taken:

I took my two checking accounts—my personal account and the business account for HumbleDollar—and made Elaine the joint account holder with rights of survivorship.

TODAY’S FINANCIAL lesson: We can manage risk—but terrible stuff can still happen. This thought, of course, was prompted by my recent cancer diagnosis. But the notion is also all too relevant to money management.
But let’s start with health matters. In 1995, I began training for my first marathon, which I ran in May 1996 in Pittsburgh and finished in just under three hours. Ever since, I’ve been a bit of an exercise nut.

I’VE ALWAYS ASSUMED my financial life wasn’t so different from that of others—and that made writing personal-finance articles a whole lot easier. I, too, wanted to own a home, buy the right insurance, pay for the kids’ college, and amass enough for a long and comfortable retirement.
On top of that, I wasn’t some financial minority—a highly paid executive, or a successful business owner, or the recipient of a hefty inheritance. Instead, I was like most everybody else,

OVER THE PAST SEVEN years, HumbleDollar has become my professional life’s passion. Cancer means I have maybe another year in me—and then it’ll be up to you. My hope: The site will have a life beyond me.
On the site’s homepage, just below the latest articles, you’ll find a new feature dubbed Forum. Will HumbleDollar have a lively future, rather than fading into a dusty collection of old articles? That all depends on whether readers and writers embrace the Forum,

ON SUNDAY MORNING, May 19, I was enjoying croissants and coffee with Elaine at the kitchen table, while watching the neighborhood sparrows, finches, cardinals and squirrels have their way with the bird feeder. All was right in our little world, except I was a little wobbly when walking—the result, I suspected, of balance issues caused by an ear infection.
It was going to be a busy week, and I figured that it would be smart to get some antibiotics inside me,

IF 20-SOMETHINGS ASK me for financial advice, I suggest getting a job right out of college and saving like crazy, so they quickly get themselves on the fast track to financial freedom.
If 60-somethings ask me for advice, I advocate a phased retirement, seeking part-time work in their initial retirement years and, if they enjoy it, perhaps keeping it up into their 70s.
Yeah, I know, I sound like a real killjoy. My advice raises an obvious question: Is there ever a time when we should cut ourselves some slack and not have a job?

COULD HUMBLEDOLLAR be replaced by a website chock-full of articles created using artificial intelligence? The short answer: It would be remarkably easy—and I fear readers wouldn’t object, especially if they didn’t know how the articles were generated.
To show what’s possible, I requested eight personal-finance articles from three freely available artificial intelligence (AI) tools, ChatGPT, Google’s Gemini and Microsoft’s Copilot. The first of those articles is published today, with the other seven appearing over the next four days.

OUR RETIREMENT INCOME is built on a slew of financial products and strategies. But we should think less about the gory details of each—and more about the role they play in our overall retirement finances.
The fact is, while each of us comes to retirement with different levels of wealth and different desires, we all want both a sense of financial security today and confidence about our financial future. How can we best meet those twin goals?

IN RECENT YEARS, I’ve confronted a choice: I could fund my solo Roth 401(k)—or I could use the dollars to cover the tax bill on a large Roth conversion. I wish I could do both. But after using my earned income to pay living expenses and make financial gifts, I don’t have the necessary cash.
My choice: Go for the big Roth conversion.
Why? In part, it’s because I’m focused on shrinking my traditional IRA before I turn age 75 and have to start taking required minimum distributions (RMDs),

SUPPOSE YOU KNEW you’d live until at least age 90. How would that change your thinking about retirement?
It seems most of us focus less on the possibility of a long life and more on the risk of an early death. This grim view is buttressed by endless anecdotal evidence—celebrities who pass away in their 40s and 50s, terrible accidents that take multiple lives, old classmates and colleagues who die at tragically young ages.

I HAVE NO IDEA HOW stocks will perform this year or next. But I have full confidence that a globally diversified stock portfolio will fare just fine over the decades ahead.
My optimism, it seems, isn’t shared by many HumbleDollar readers, who fear we’re facing some rough years for the economy and the stock market. How do I justify my optimism about the long term? Here are five reasons.
1. Heads I win,

IF YOU THINK IT’S irritating to debate an issue with folks who have already made up their mind, there’s one situation that’s even worse: debating an issue with those who have not only made up their mind, but also gone ahead and acted on their decision—especially if that decision is irreversible.
And, yes, many retirement decisions are irreversible.
Take issues such as when to claim Social Security, whether to take pension payments or a lump sum,

I HAVE ONLY A VAGUE idea of how much I spend. I figured it was time to find out.
I’ve never budgeted because I’ve never seen the need. From my early 20s until three-plus years ago, I kept an iron grip on my wallet, spending with the utmost care and saving great heaps of money. Over those 35 years of fierce frugality, I don’t feel like I deprived myself, but I do feel like I thought about money far too much—and tracking my spending would only have made that worse.

WHEN WE SPEND MONEY, we’re looking to get something in return. But what? Forget classic budgeting categories like housing, food, utilities, insurance and entertainment. Instead, suppose we used a completely different classification system—one that reflected the physical, social and emotional benefits we garner.
The list below is, I suspect, far from complete, especially when I compare it to the 16 basic desires developed by psychologist Steven Reiss. Moreover, as you’ll see, while an expenditure might fall predominantly into one category,

LET’S START WITH a contention that’ll get nods of agreement from the vast majority of HumbleDollar readers: Your portfolio’s core holdings should be total market index funds.
But which funds?
Frankly, the differences among the most popular total market index funds are modest and perhaps not worth worrying about. Still, worry we do. As I see it, which ones you choose depend on what you’re most focused on. Here are four key considerations:
Low cost.

HAVE YOU EVER HAD one of those debates where you come up with the winning argument—hours later, long after everybody has gone home?
Among the many financial topics that cause confusion, extra-principal payments on a mortgage deserve a special mention. For decades, I feel like I’ve been trying to stamp out the nonsense that’s spouted on this topic, and I think I finally have the answer. Maybe.
The chief reason for all the confusion is a mortgage’s shifting mix of principal and interest.

WHAT’S THE BETTER choice? This is the perennial question for all of us, as we ponder how best to use our time, how to invest our savings and how to get the most out of the dollars we spend.
Want to lead a more thoughtful financial life? As I try to make better choices, here are five questions I find particularly useful.
1. Why would I stray from the global stock market’s weights?

INVESTING IS MESSY. Get used to it.
In the financial markets, you’ll typically pay a high price for certainty. That price is paid in lower investment returns, and sometimes also in greater financial hassles. Yet I see investors paying that price again and again.
Consider equity-indexed annuities. Investors imagine they’re getting stock market returns without any downside risk. But in truth, what they’re buying is an overhyped investment that captures only a portion of the stock market’s gain,

MONEY IS A TOOL. But a tool for what? We might imagine it’s simply a way to purchase the goods and services we need or want. But in truth, there are all kinds of things that money can do for us—some worthy, some not so much.
Want to use your wealth more wisely? I think all of us should spend time pondering what money represents to us, how we use it and why we like to have it.

WHAT WILL BE YOUR legacy? It’s a question many of us ponder as we get older. My conclusion: It’s the wrong question to ask.
The fact is, the whole notion of a legacy is a tad delusional, and very likely a trick played on us by our genes, which want us to care deeply about future generations. The reality: Most of us will leave scant mark on the world and we won’t be remembered for very long after we’re gone.

HAVE WE GOT IT ALL wrong? “It” is our relentless, lifelong focus on socking away great wads of money, so we don’t have to worry about earning another penny once we reach our 60s.
In fact, adherents of the FIRE—financial independence-retire early—movement aim to reach this blissful state far earlier, perhaps even in their 30s. This, of course, involves saving voraciously, with all the financial sacrifice that’s entailed. Even retiring in our 60s can seem like a Herculean task,

WE’RE ALL CAPTIVES of our own experiences. Want to behave more rationally? We should set aside our life’s anecdotal evidence and instead make decisions using the best information we can find. Yet our experiences—especially those during childhood and that involve family—tend to triumph, shaping our world view and potentially setting us up for costly financial mistakes.
What drives your behavior, financially and otherwise? A little introspection could help you better understand your financial choices—a crucial first step to behaving better.

MY FAMILY HAS BEEN regularly visiting a remote corner of southwest England since 1968, when I was five years old. My maternal grandparents retired to the area, and for a while my parents owned a holiday house nearby. It is, to me, the world’s most beautiful place.
Decades ago, while walking the country lanes, I came across the ruins of a church that was under the protection of a group called Friends of Friendless Churches,

AND NOW FOR SOMETHING completely different: I’d like to try a HumbleDollar meetup on Monday, March 4, at 5 p.m. at Pizzeria Vetri, 1615 Chancellor Street, Philadelphia.
All attendees will be responsible for their own bill, but it shouldn’t be wildly expensive, not least because happy hour runs through 6 p.m. I believe Vetri has the best pizza in Philly. The restaurant doesn’t take reservations, but the manager assures me that things should be quiet at that time.

CALCULATING THE RETURN from homeownership typically involves some mix of delusion and dubious math—and that’s never truer than when it comes to remodeling projects. On the numbers alone, it’s all but impossible to justify a major renovation. Trust me, I’ve tried.
We just finished a project that proved so expensive that, if I revealed the cost, my reputation for frugality would be in tatters. The cost was comfortably—or perhaps uncomfortably—into six figures. What if we sold our Philadelphia townhome tomorrow?

HUMBLEDOLLAR JUST marked its seventh birthday. I didn’t set out to launch a site that would devour endless hours of my time and derail my plans for something that looked like a normal retirement. But I have no regrets.
The site hasn’t been a huge success. Still, I find running it to be hugely satisfying. It’s the reason I typically crawl out of bed before 5 a.m., and do so happily. Here are five key lessons I’ve learned from my first seven years running HumbleDollar—lessons that I suspect may be useful to others,

WHAT SHOULD YOU DO with your money next year? The same things you should have done this year, and the year before, and the year before that.
The rules for a successful life—financially and otherwise—are, I believe, pretty timeless. What rules? Here are 24 of my favorites.
1. Ask why. If you don’t know where you’re going with your finances, you’ll likely end up somewhere you don’t like. What are your money goals for 2024 and beyond?

AT THE RISK OF CAUSING readers to think too much on a Saturday morning, let me start by offering a pair of seemingly contradictory statements:

The financial markets are efficient, but occasionally go stark, raving mad.
Nobody knows what stocks are worth, but they have fundamental value.

My contention: There’s a payoff to be had from grappling with these two apparent contradictions—a payoff that takes the form of greater calm in the face of market turmoil and improved long-run portfolio performance.

INVESTING IS ABOUT finding a strategy that’ll allow us to meet our life’s goals—and which we can live with along the way. That brings me to a major portfolio change I made two years ago, and a series of changes I’m planning for the years ahead.
In late 2021, I split my portfolio in two. One part I’ll use to fund my retirement, while the other part I’ll leave to my two kids. This “bequest” portion consists of my three Roth accounts,

PROGRESS IN RECENT decades has been remarkable. We no longer do math using slide rules, talk on phones attached to walls, choose from just a handful of TV channels or drive clutching an unfolded map.
Less obvious—but arguably just as important—has been the progress in our financial thinking. Looking back over the post-World War II period, I see five key phases in our thinking about money, and those phases roughly parallel the needs and wants of the baby boomers,

I BELIEVE MANAGING money should be kept as simple as possible. That’s usually the route to lower costs, fewer mistakes and greater financial peace of mind. But, alas, three crucial areas of our financial life defy simplicity: health insurance, taxes and paying for college.
This is hardly an original insight. Folks have complained for decades about the maddening complexity involved with all three. All are ripe for a total revamp, but there’s no sign that’ll happen any time soon.

IT’S HARD TO OVERSTATE how challenging it is to generate retirement income: We need our money to last at least as long as we do, and yet we don’t know how financial markets will perform, what the inflation rate will be, whether we’ll get hit with hefty long-term-care costs and how long we’ll live.
Moreover, the generic advice offered inevitably doesn’t work for many—and perhaps most—folks because we all start retirement with different attitudes,

WE LEARN EARLY ON whether we’re stronger, faster or have better hand-eye coordination than other kids. We might initially harbor dreams that we’ll get better. But after a while, it’s hard to ignore the mounting evidence of our athletic mediocrity.
If only life were always so simple.
I’ve heard parents say, “You don’t have to tell your kids that they aren’t good at something, because the world will do it for you.” That’s true—except there’s an additional step involved: Your kids have to listen.

HERE’S SOMETHING that’ll surprise exactly zero readers: I’m a planner. Even though I haven’t yet fully retired, I’m already worrying about how short the active part of my retirement will be.
For this, I blame my fellow HumbleDollar writers, as well as those who post comments. Many folks who are active on the site are older than me, and they’ve given me a sneak peek at what lies ahead. One thing I’ve learned: At some point between age 75 and 80,

WHAT’S THE STATE of America’s family finances? The Federal Reserve just released its once-every-three-year look, in the guise of the 2022 Survey of Consumer Finances, which is based on in-depth interviews with some 4,600 families.
You can read the Fed’s analysis here. Below are some key insights from the latest survey:
Net worth. The typical (or “median”) net worth—meaning the value of all assets minus all debt for those American families halfway down the wealth spectrum—was $192,700 in 2022. 

“GOD, GRANT ME THE serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”
No matter what our religious beliefs, we’re constantly bombarded with reasons to invoke the serenity prayer. There are so many things we can’t control: what our bosses decide, what acquaintances say behind our back, how stocks and interest rates perform. This lack of control can be a source of endless anxiety,

I’VE KNOWN AT LEAST half-a-dozen folks who regularly carried five-figure credit card balances. In fact, I was once friends with a woman who had $100,000 in card debt—not just a staggering sum, but also a warning sign about her spending habits that I should have heeded far earlier than I did.
Folks who flock to HumbleDollar tend to be financially disciplined, so this sort of behavior will no doubt spark tut-tutting among some readers.

AS WE GET OLDER, the financial hits often grow far larger, for two reasons. First, we’re typically wealthier, which means the potential dollar losses are bigger. Second, as we age, there’s greater risk of hefty health-care costs, notably long-term-care expenses.
Almost everybody endures at least a few big financial hits during their lifetime. Perhaps you lose your job, and it then takes many months to find work. Maybe your parents need nursing-home care and you end up footing part of the tab.

I’M DOING RELATIVELY well—and therein lies the problem. No, it isn’t the “doing well” part that’s the issue. Rather, the problem lies with that all-corrupting word “relatively.”
We’re constantly reminded of how we stack up against others. Early in life, that can be useful. If we aren’t cut out to be professional athletes, effective leaders, academic stars or market-beating investors—this last one would include almost all of us—it’s good to find that out, so we don’t spend countless years pursuing goals we’re unlikely to achieve.

WE ALL LIKE TO THINK we’re consistent in our views. I certainly do. Yet, as I recall how I thought about the financial world two decades ago and how I think about it today, I’m amazed at how much my views have changed.
Here are five pieces of advice that I give now—but which I wouldn’t have given two decades ago:
1. Don’t waste time on investing. In the early 2000s, I thought endlessly about how to structure a portfolio,

WHEN WE RETIRE, we win back control over our daily life. Gone is the boss, the expectation that we’ll be at work at a certain hour, the worry about what the next office email will bring. We have a degree of freedom that, in many cases, we last knew when we were students contemplating a long summer vacation.
But even as we gain that freedom, there’s also much that we lose. If we’re to be happy retirees,

THERE ARE ALL KINDS of financial talents that seem desirable. Who wouldn’t want a knack for finding undervalued stocks, identifying star fund managers, and figuring out which way the stock and bond markets are headed? The problem: While some folks may briefly appear to possess these talents, it usually turns out that their apparent prescience was nothing more than dumb luck.
Where does that leave us? Forget the obvious but elusive financial superpowers, and focus on those that—with a little work—are available to all of us.

DON’T CONFUSE THREATS to your happiness with financial threats.
For instance, it would be devastating if one of your children died at a young age, and no doubt that’s why some folks buy life insurance on their children’s lives. But while the death of a child is a threat to your happiness, is it a threat to your finances? It’s terrible to say it, but just the opposite is true: You’d probably be better off financially.

THERE ARE CERTAIN things I did right during my financial journey, notably saving like crazy, tilting heavily toward stocks and favoring index funds. But if only all my doing had stopped there.
Looking back over almost four decades of investing, what I see is far too much tinkering. At various times, I’ve owned funds devoted to precious metals, global real estate, commodities, emerging market bonds and more. I know this tinkering devoured precious time—and I strongly suspect it hurt my investment results.

AS SOMEONE WHO HAS marched through life—and made money along the way—by putting one word in front of another, maybe it’s no great surprise that I’m a big fan of writing things down.
My challenge to you: Follow the example of the 30 HumbleDollar writers who contributed essays to the book My Money Journey, and devote a few thousand words to detailing your financial journey, including your mistakes, triumphs and the lessons you learned along the way.

WANT TO DONATE TO charity? It usually makes sense to give now rather than upon death. You’ll get the pleasure of helping a cause you care about, and your generosity may also earn you an immediate tax deduction.
But what about giving money to your children or other heirs? This is a much trickier question, one I’ve thought about a lot ever since my first child was born almost 35 years ago.
Giving now.

THE STOCK MARKET offers limited downside and unlimited upside. That might not seem like a big deal. But this asymmetry has huge implications for how we manage our money—and, for prudent investors, it should be a great comfort. How so? Consider five key implications.
No. 1: The most a stock can lose is 100% of its value. Sound grim? There’s a silver lining. Assuming you own your stocks outright, your potential loss is limited to the sum you invested.

WE LIVE IN A WORLD rife with intolerance—and that intolerance, alas, has infected the once-civilized world of index-fund investors.
Back in the 1990s, we indexers were such a small minority that simply owning index funds was a common bond. But now that more than half the fund market is given over to index funds, internecine skirmishes regularly erupt, with folks debating what’s the right way to index and belittling those who take a different approach.

AS WE MANAGE OUR financial life, we’re compelled to cope with heaps of uncertainty—which way the stock and bond markets will head, what financial misfortunes will strike, how long we’ll live and so much more.
But there are also ways we can exert a measure of control: spend thoughtfully, save diligently, keep a close eye on risk, hold down investment costs and manage our annual tax bill. To this list, I’d add one other key way to reclaim the advantage: have a good handle on who we are.

MY PORTFOLIO HAS bounced back nicely from October 2022’s stock market low—and that’s a problem: I’ve learned over the decades that I’m not good at handling prosperity.
At issue is the question of when to rebalance my portfolio, in this case selling stocks and buying bonds to bring them back into line with my target percentages. Among experts, there’s no agreed-upon strategy, which is almost an invitation to bad behavior. We investors do better with hard-and-fast rules.

AS FOLKS HURTLE toward retirement, they often wonder whether they’ve saved enough, debate when to claim Social Security and fret about how they’d pay for long-term care. Make no mistake: Such issues are hugely important.
But amid these financial musings, we should also spare a thought for four other questions:
How can I transform myself from a diligent saver to a happy spender? This sounds so easy, and yet many struggle with it,

DON’T ASSUME YOUR PATH up the mountain is one that everybody else should also follow.
I don’t budget, I earmark 80% of my retirement savings for stocks and I’m currently well above that level, I don’t have a separate emergency fund, I expect to live comfortably in retirement on half of what I currently earn, I plan to delay Social Security until age 70 and my stock market money is entirely in index funds,

I DON’T TRACK MY finances that closely and I don’t make big financial moves very often. Partly, it’s because I’m so busy with other things. But partly, it’s because I’ve come to see the virtue in benign neglect.
Still, this is shaping up to be a surprisingly busy year. I’ve taken a handful of financial steps—with three key goals in mind:
No. 1: Prepaying retirement. Like many others as they approach retirement,

I’M ABOUT TO MOVE OUT of my home for four or five months. Yeah, this takes some explaining.
In February 2020, when I was planning my move to Philadelphia, I wrote down 10 criteria I’d use to pick my new home. I recently re-read the article—and realized I broke the final two rules I’d laid down for myself.
To be sure, the home search didn’t go quite the way I planned. For starters, there was this little hiccup called the pandemic.

HOW WOULD YOU DEFINE financial freedom? That’s the intriguing question I’ve been asked twice in recent weeks by journalists curious about the new HumbleDollar book, My Money Journey: How 30 People Found Financial Freedom—And You Can Too.
Financial freedom is something that pretty much everybody wants, and yet there’s no agreed-upon definition. Still, I think most folks would focus on two key elements: time and money. But I don’t think it’s a simple matter of having lots of dollars and lots of free time.

IMAGINE YOU TOOK a group of folks—mostly male, mostly older, mostly upper-middle class, mostly well-educated—and had them describe their financial journey. They’d all be pretty similar, right? You might be surprised. I was.
Next Tuesday marks the official publication of My Money Journey, which you can now order from Amazon and Barnes & Noble, as well as directly from Harriman House, the publisher. When I asked 29 writers for HumbleDollar to join me in contributing essays to the book,

COMMENTS FROM READERS are one of HumbleDollar’s greatest strengths. Just finished perusing an article? If you don’t scan the comments posted below, you’re often missing out on some savvy financial insights and eye-opening personal stories.
With an eye to tapping into this strength, I launched the Voices section two years ago. My hope: The questions—now 133 in total—would offer a way to organize readers’ collective wisdom and become a go-to resource for those seeking help on a particular financial topic.

WHENEVER FOLKS declare that their goal is to one day write a novel, or get in great physical shape, or learn to speak Italian, my immediate reaction is always the same: If these were things they really had a burning desire to do, they’d have done them already.
Which is why you should be skeptical of the article that follows.
Now that I’ve turned 60, I’m thinking about how I’ll divvy up my time in the years ahead.

THE BEAR MARKET HAS now dragged on for 15 months—and no doubt plenty of anguished investors are second-guessing their allocation to stocks. But as for me, I grow more enthusiastic with every drop in the Dow Jones Industrial Average. In fact, I’d be happy to see the bear market last a few months longer, so I can finish fully funding various tax-advantaged accounts for 2023.
Not only are stocks better value than they were 15 months ago,

IF YOU’RE LIKE MANY readers of this site, you’ll reach your 60s and discover one of those nice problems to have—that you’ve over-saved for retirement.
What now? For answers, check out a new book, More Than Enough: A Brief Guide to the Questions That Arise After Realizing You Have More than You Need. Author Mike Piper is the driving force behind both the Oblivious Investor website and the free Open Social Security calculator.

MONEY BUYS HAPPINESS—but it may not buy us very much. Indeed, no matter how much we earn and no matter what other steps we take to boost happiness, we may discover the impact is modest and fleeting.
That brings me to a recent academic debate. In 2010, Princeton University’s Angus Deaton and Daniel Kahneman noted that happiness, on average, didn’t appear to increase beyond an annual income of $75,000 or so—a finding that’s since been widely reported in the mainstream media.

RETIREMENT IS LIFE’S most daunting financial puzzle, not least because many of the decisions we make are difficult or impossible to reverse. To make matters worse, we’re often making decisions we’ve never made before, so we have no real expertise.
What sort of decisions am I talking about? Here are 10 examples.
1. When should I quit work? Needless to say, this is the most important retirement decision. Once you quit the workforce,

I SPENT NINE YEARS at English boarding schools. The food was beyond disgusting. The buildings were cold and drafty. I was constantly bullied. I would go as long as 14 weeks at a time without seeing my parents, who were based first in Bangladesh and then Washington, D.C.
But I also knew I was getting a good education, and I opted to stay when I had the chance to return home and go to the local U.S.

WE BUY ALL KINDS of investments and financial products. But what is it that you haven’t bought, do you have a good reason for not buying—or is there a gaping hole in your finances?
Below are some of the investments and financial products I’ve chosen not to own. The list, of course, isn’t comprehensive—and I didn’t bother to touch on financial products that are beyond the pale. Equity-indexed annuities, anyone? How about leveraged exchange-traded funds?

I MESSED UP MY retirement planning—but I have few regrets.
I don’t know if or when I’ll fully retire. Arguably, I’ve been at least semi-retired for the past nine years. That’s how long I’ve gone without a fulltime job. On the other hand, during those nine years, I’ve continued to earn enough to cover my living costs and I’ve worked longer hours than at any time in my life, thanks mostly to that insatiable mistress known as HumbleDollar.

I’VE PENNED MORE THAN 450 articles for HumbleDollar, so picking 10 favorites could have been a laborious task—if I’d bothered to look back through all the articles I’ve written.
But instead, I took an easier route, simply listing the articles that I could most easily recall. What made these articles memorable? Some were quite personal, while others broached ideas that I continue to grapple with to this day.

Really Useful Engine (Dec.

IF YOU KICK AROUND Wall Street for long enough, you’ll witness all kinds of investment fads—special purpose acquisition companies, cryptocurrencies, meme stocks, to name just a few. Each bubble differs, but the eventual comeuppance always feels brutally familiar.
But there aren’t just fads among investments. There are also fads among investment concepts. But while naïve investors tend to get caught up in investment bubbles, it’s the brainy types who fall in love with investment concepts,

RUNNING OUT OF MONEY is retirement’s biggest financial risk—though this, of course, never actually happens. Thanks to Social Security, almost all retirees will have some monthly income, no matter how long they live.
Still, Social Security alone probably won’t make for a comfortable retirement, though it is the financial cornerstone for many. In fact, Social Security accounts for at least 50% of income for half of retirees. That includes a quarter of those age 65 and up for whom their monthly benefit is at least 90% of their income—a statistic I find shocking.

WE LIKE TO ESCAPE the Northeast’s cold each winter, so we just spent 10 days in Sarasota, Florida. Like many others when they’re on vacation, we found our noses pressed against the windows of real-estate offices, perusing the listings and musing about whether we’d want to live there.
Fantasizing about the future is fun and free, but it can also be dangerous. It’s how folks end up buying timeshares and second homes during wonderfully relaxing vacations.

WHEN I FIRST LOOKED at the issue of portfolio withdrawals more than two decades ago, many financial experts suggested retirees follow a simple strategy: spend taxable account money first, traditional retirement accounts next and Roth accounts last. That way, you’d squeeze more years of tax-deferred growth out of your traditional retirement accounts, and even more out of your tax-free Roth.
If only things were so simple today.
Why have portfolio withdrawals become more complicated?

I GREATLY VALUE honesty. I think it’s important to be scrupulously honest with others and brutally honest with ourselves. That brings me to HumbleDollar’s annual report card.
After steady growth over the site’s first five years, our sixth year—2022—saw mixed success. Below are five key metrics that I track. These numbers, I believe, tell you not only about HumbleDollar, but also a little about the mood of Americans over the past 12 months.

MOST OF US ARE forever striving to be better versions of ourselves—usually with mixed success. Still, the changing of the calendar often prompts renewed efforts. But what should we focus on? Let me offer 10 words that I try to live by.
1. Pause. Throughout the day, we make snap decisions, and they usually work out just fine—except when it comes to spending and investment choices. Got an overwhelming urge to buy an expensive bauble or make a portfolio change?

I HAVE A CONUNDRUM: In 2023, I’ll have ample opportunities for tax-free growth—but probably not enough cash to take advantage.
It doesn’t get much better than tax-free, right? I remember the excitement when Roth IRAs came into being, thanks to 1997’s Taxpayer Relief Act. But today, the Roth is just the tip of the tax-free iceberg. Indeed, for 2023, I’m eyeing four tax-free accounts.
I want to fund a health savings account and my solo Roth 401(k),

READERS HAVE PERUSED almost 18 million HumbleDollar pages over the past six years. Many of those pageviews were garnered by the homepage, the latest articles page and the main money guide page. But what about the site’s articles? Below are the 30 best-read pieces since the site’s launch on Dec. 31, 2016.
If the list seems a little eclectic, there’s a good reason: Many of the articles that have enjoyed big traffic over the past six years have been those that got promoted by far larger sites.

WANT TO BE A PERSONAL finance columnist? I can’t claim expertise on many topics, but this is one where I draw on a lifetime of experience.
And it isn’t just as a writer. At HumbleDollar, I have a hand in editing every piece that appears, plus I get to see the numbers on which articles catch readers’ attention—and which get the cold shoulder.
To be sure, popularity isn’t necessarily the best way to gauge an article’s quality.

‘TIS THE SEASON WHEN many of us open our wallets and spend with reckless abandon. Along the way, we often end up buying a gift or two for that special person in our life—ourselves.
I don’t put too much stock in the accuracy of quick consumer surveys, but it seems the percentage of folks who self-gift might be 22% or 57% or even 77%. Whatever the right number is, I’m not inclined to be too judgmental,

LIKE A SLOW-MOTION train wreck, we’ve spent recent decades inching toward a world where we have too few workers and too many retirees dependent upon their labor. Have we finally reached the tipping point?
Consider today’s confluence of economic events: a labor shortage, sharply higher inflation, massive government budget deficits, and depressed stock and bond prices. To be sure, all this can be explained by the pandemic and what followed—excessive government stimulus, supply chain issues,

THE TWO-MINUTE CHECKUP is, I like to think, a unique financial tool: It aims to offer feedback across someone’s entire financial life based on no more than nine pieces of information. That’s an ambitious goal and—perhaps no surprise—some users have found the calculator wanting.
Meet Checkup 2.0.
Sanjib Saha, who writes for HumbleDollar when he isn’t busy writing software, and I went through all the comments that the calculator had received and made a host of changes.

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,

WHEN I PICK HEALTH insurance each year, my focus is twofold: What’s the monthly premium—and what’s the out-of-pocket maximum?
Sure, I want to stay with my primary care physician. But my doctor just announced that she’s leaving Philadelphia to return to her native Massachusetts, so that became a non-issue for 2023.
Meanwhile, I’ve long wanted a high-deductible health plan so I could fund a health savings account (HSA). But since 2014, when I started working for myself and had to buy individual coverage,

PESSIMISTS SEEM LIKE they’re clever and sophisticated, but—if you want to make money—take my advice: Invest like an optimist.
I’m not talking wild-eyed optimists who are over-enthused about meme stocks and nonfungible tokens. Instead, I’m talking about a fundamental belief that economic setbacks are temporary and the future will be better than the past. Struggling to stay cheery amid 2022’s rotten financial markets? Here are five reasons for optimism.
1. The news is terrible.

WHEN MARKETS PLUNGE, investors start questioning whether they have the right mix of stocks, bonds and cash. That’s no great surprise: Bear markets hammer home the investment risks we’re taking—and many folks discover their portfolio is too aggressive for their taste.
That’s a useful insight for the future. But it’s hardly one you want to act upon when, even after Thursday’s rally, the broad stock market remains down some 16% for the year-to-date and the bond market is off 14%.

COMPARISONS ARE the death knell of happiness—and they aren’t good for our wallets, either.
If we’re to get the most out of our time and money, we need to devote those two precious resources to things we consider meaningful. But how do we figure out whether something is indeed meaningful to us, and not a reflection of the influence of others?
For “meaningful,” dictionaries offer synonyms such as “important” and “significant.” What we’re talking about are things that have some special emotional resonance,

BILLIONS OF DOLLARS poured into Series I savings bonds toward the end of October, as investors rushed to snag the 9.62% annualized rate then on offer, which was guaranteed for the first six months. But it turns out these folks were a tad too hasty.
How so? Buyers of I bonds are promised a pretax return equal to the inflation rate, plus they sometimes also get an additional fixed rate of interest, over and above inflation,

THE COLUMN I WROTE for The Wall Street Journal for more than 13 years was popular with readers—which was just as well, because it wasn’t always popular with Journal editors.
As best I could tell, top management appreciated the column, as did most of the editors I reported to directly. But others were critical. One editor, during his annual review of my performance, even demanded that I change my approach to writing the column.

FIVE YEARS AGO, I realized I’d spent my adult life doing something that was totally unnecessary—drying my hair with a hair dryer. I’m not sure why I got into the habit, but one day I realized it made zero difference to my appearance. I’m not saying using a hair dryer is a bad use of time for others. But for me, it was a minute or so each day that was completely wasted.
And it isn’t just the hair dryer that I’ve ditched.

IF YOU’RE AN OWNER of financial assets, inflation doesn’t offer much reason to cheer. Lost 16% on your bonds this year? Once you factor in inflation, the hit to your bond portfolio’s real, inflation-adjusted value would be more than 20%.
By contrast, if you’re a borrower, inflation is a bonanza. Suppose you owe $2,000 every month to the mortgage company on your fixed-rate loan. As inflation climbs, your mortgage payment stays the same—but, if your income rises with inflation,

I’LL CONCEDE IT’S HARD to justify—but I don’t believe it’s 100% unjustifiable. At issue: my strategy of overweighting stocks during big market declines. I did so in 2007-09 and early 2020, and I’m doing so today.
“Market timer,” cry the critics. That, in financial circles, ranks as pretty much the nastiest insult you can hurl, even worse than calling someone an “annuity salesman.”
Today, if I ignore the money I’ve set aside for a big home remodeling project,

WHAT DO ALL BEAR markets have in common? By definition, stock prices must fall at least 20%. But often, that’s pretty much where the similarity ends.
For instance, ponder the differences between 2020’s one-month, 34% plunge in the S&P 500 and this year’s grinding nine-month descent, which saw the S&P 500 yesterday close 25% below its early January high.
The 2020 slump had folks fretting about the economic shutdown and possible deflation, while this year’s big worry is surging inflation amid a 53-year low in unemployment.

THE CLOSER IT GETS, the more attention I pay.
“It,” in this case, is retirement. In January, I’ll celebrate my 60th birthday. I have no intention of fully retiring, but I am thinking about how to work less, travel more and prep my finances for the years ahead. As I sketch out my plans, I’m drawing not only on a lifetime of writing and thinking about personal finance, but also on an even more valuable resource: you.

WHEN I WORKED at The Wall Street Journal, editors used to quip that, “There are no new stories, just new reporters.” I don’t know whether that’s the case with politics, sports and technology articles, but it sure rings true for personal finance and investing stories. All too often, the latest hot topic just seems like a rehash of something I’ve witnessed—and often written about—before.
That brings me to three financial arguments that never seem to end.

WE ALL WANT TO LEAD happier lives, but that’s no easy task. Our first stumbling block: Most of us aren’t even sure how to define happiness.
Fortunately, philosophers and psychologists have come to the rescue, suggesting that there are two different types of happiness. First up: hedonic happiness. Think of a wonderful party with delicious food, sparkling conversation and all your favorite people in attendance. There’s great momentary pleasure and—fingers crossed—scant pain involved.
Meanwhile,

IT SEEMS ONE IS NEVER enough. I’ve known folks who collect handbags, wine, Mark Twain first editions, pennies, vintage posters, Pez dispensers, old cars, British royal family memorabilia, antique furniture, lunch boxes, motorcycles, Beanie Babies, Portmeirion china and more.
Near where I live is the Barnes Foundation, which houses Albert Barnes’s art collection, with its 181 paintings by Pierre-Auguste Renoir. Doesn’t that seem a tad obsessive? Most of us, I suspect, would be content with just three or four Renoirs.

TO MEASURE IS TO improve. Businesses, investors, athletes and others embrace this notion, and it undoubtedly has value. Still, earlier this year, when my bicycle’s decade-old computer—which measured speed, distance and cadence—finally quit on me, I didn’t replace it.
These days, when I go out for my morning 20-mile bike ride, I like to think I’m going reasonably fast and I’m not happy if another cyclist passes me. But I also know that, when I occasionally use the Strava app on my phone to clock my average speed,

AS I’VE GROWN OLDER, I have become more willing to open my wallet and splurge. But I still get a thrill from what feels like a bargain. One example: I’ve long been a fan of restaurant happy hours, when you can often get a glass of wine and some appetizers at a cut-rate price.
But I have a new favorite low-cost indulgence. Elaine and I will grab a bottle of vino out of the basement—screw top preferred,

I MOVED FROM LONDON to New York in 1986. For the next three-plus years, I worked as a lowly reporter (read: fact checker) and then staff writer at Forbes magazine, before I was hired away by The Wall Street Journal. During those three years, I set out to educate myself on U.S.-style personal finance.
Forbes was a great place to do that. The magazine’s Greenwich Village offices had a well-stocked library of financial books and company reports,

IN THE WEEKS BEFORE my annual physical, I made a concerted effort to lose a few pounds, drink more water, skip my evening glass of wine, eat more fiber, and avoid red meat, French fries and cheese. The happy result: My blood pressure was low. My weight was down slightly from my previous checkup. My cholesterol count was good. My A1C level suggests my prediabetic condition hasn’t got any worse. All in all, last month’s physical found that I had little reason to worry.

MEET THE LATEST feature added to HumbleDollar—as well as the website’s first calculator: the Two-Minute Checkup.
How does it work? All you need to do is input up to nine pieces of information, the sort of stuff most of us know off the top of our head. There’s no need to create an account or link to your brokerage firm or bank, and none of your information is saved on HumbleDollar or anywhere else. 

INDEXING IS A GREAT strategy—and yet there’s also a constant temptation to stray.
When stocks soar, so does our self-confidence, as we attribute our investment gains to our own brilliance. At such times, there’s a risk that even hardcore indexers will start dabbling in individual stocks, actively managed funds, cryptocurrencies and goodness knows what else. Meanwhile, amid market slumps, index funds suffer just as much as the market averages, and some indexers may look to sidestep the pain—by “temporarily”

THE MOST POWERFUL financial ideas are those that help us make better money decisions—by providing a lens through which to understand ourselves and the world around us. Examples? Think about notions like loss aversion, diversification and market efficiency, all ideas frequently mentioned in HumbleDollar articles. Every investor, I believe, should understand such concepts.
To that list of key ideas, I’d favor adding five others—all underappreciated, I’d argue, but all central to how I think about the financial world.

AS WE WATCH OUR portfolios get pummeled by 2022’s imploding financial markets, this might not seem like the time for self-congratulation. After all, Vanguard Total Stock Market Index ETF (symbol: VTI) is down 19% in 2022, while Vanguard Total Bond Market ETF (BND) has lost almost 11%.
But ponder this: If you’d been less sensible with your money, your results could have been far, far worse. In particular, take a bow if you:

Didn’t buy cryptocurrencies.

THE LONGER WE LIVE, the more perspective we have—and the more foolish many of our earlier beliefs seem. We start our adult journey confident that we’ll make our mark on the world and that the financial rewards we collect will greatly enhance our life. By the time we reach retirement, things look quite different. Here are five things I’ve learned along the way:
1. Fame is fleeting. How many entertainers, sports stars and politicians have each of us forgotten?

I’M NOT IN THE HABIT of celebrating half-birthdays, but my next one has me thinking. In a few days, I’ll turn age 59½.
That, of course, is the age at which you can tap your retirement accounts without paying the 10% early withdrawal penalty. Though I don’t currently need to pull spending money from my retirement accounts, I like the feeling that I can now do so penalty-free.
Even without that 10% penalty, however,

ARE WE HAVING FUN yet? I take no pleasure in seeing my portfolio shrink, but I love buying stock index funds at discount prices and I’m always amused by the hand-wringing in the financial media.
Two years ago, we were hiding out in our homes, fretting over a global pandemic and worrying about an economic collapse. Today, COVID is still spreading like wildfire, but vaccines have helped slash the number of hospitalizations and deaths,

ON MONDAY, MAY 2, I logged onto my Chase bank account—and discovered my balance was $992.43, many thousands of dollars less than I expected. My first thought: I’m going to get hit with a low-balance fee.
That, alas, should have been the least of my worries.
I clicked through to see the account details, and discovered that check No. 1126 had been made out to Milton Cherry for $7,000. But none of the writing on the check was mine,

WHEN I WAS IN COLLEGE, late in the evening and usually after a few drinks, someone would often play Edith Piaf’s Non, Je Ne Regrette Rien, her stirring and defiant 1960 song about regretting nothing.
It’s a sentiment worth recalling as we look back on our financial life. Here are four things we shouldn’t regret:
Saving too much. Is that really something to regret? It’s undoubtedly better than the alternative: saving too little.

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,

I THINK SERIES I savings bonds are a great place to stash money you’ll need to spend in five or six years, and yet I’ve resisted buying. I’ve seen credit cards that offer more cash back than the cards I currently carry, but I haven’t taken the bait. The reason: My goal is to have fewer financial accounts, not more, even if it means fewer dollars in my pocket.
As I discussed in an article earlier this year,

“OLD PEOPLE’S DISEASE.” That’s how I describe my shock every time I go to the grocery store and see how much everything costs.
Partly, this is because I remember how cheap things used to be. My memory of lower prices goes back to the 1960s. My parents would give my brothers and me 50 cents per week in pocket money. I can still recall buying a pair of Reese’s peanut butter cups, then my favorite candy and still top of my list for stealing from a child’s Halloween haul,

FOR AS LONG AS I’VE been writing about investing—37 years now—grumpy old men have been declaring that the stock market’s party will soon end with a world-class hangover.
Is it time to stock up on Tylenol?
I, of course, don’t have the slightest clue. But when the S&P 500 rises 3% on Wednesday and then plunges 3.6% on Thursday, you sure get the sense that investors are a tad uncertain about the future. That brings me to two questions I’ve been pondering.

BETWEEN 1972 AND 2018, the percentage of Americans who described themselves as very happy ranged from 29% to 38%. The number for 2021 was recently released: Just 19% of us said we’re very happy—10 percentage points lower than any prior survey.
Our happiness, it seems, is another victim of the pandemic. Indeed, COVID-19 and the resulting social isolation has delivered a bigger blow to our collective happiness than 2008-09’s Great Recession, 2001’s terrorist attacks and countless other distressing events from the past half-century.

SINCE EARLY JANUARY, this site has published a series of essays every Saturday, each from a different HumbleDollar writer. The theme: my money journey. The essays, 30 in all, will appear in a book of the same name, which will be published by Harriman House in March 2023. With this blog post, you get a sneak peak at the book’s cover.
As you might imagine, the book has meant a lot of work for the writers involved—and a ton of editing for me,

THIS IS A TEST. This is only a test. This is a test of our stock market resolve. Remember how you told yourself you’d stand pat during the next stock market decline, that you wouldn’t get rattled like you did in 2008-09 and early 2020? That moment has arrived.
Like any person with an ounce of decency, I’m appalled by Russia’s invasion of Ukraine and the unnecessary death and suffering that will result. But I’m also confident that the Russians will come to regret their actions.

ROUGHLY A QUARTER of my investment portfolio sits in three Roth retirement accounts. Ever since I first funded a Roth a dozen years ago, I’ve thought of this as money I’d avoid spending for as long as possible, so I milk maximum gain from the tax-free growth. But lately, it’s dawned on me that it’s highly unlikely I’ll ever dip into these accounts—and that realization has triggered a slew of investment decisions.
My three Roth accounts are all at Vanguard Group.

WHEN WRITERS SUBMIT their latest article or blog post, I often thank them for “feeding the beast.” While tiny by internet standards, HumbleDollar has indeed become something of a beast, larger and more time-consuming than I ever imagined, but also—I like to think—occupying a unique place in the financial world’s ongoing conversation. This, I tell people, is the place where money grows up.
Here’s a look at what happened at HumbleDollar in 2021,

READERS HAVE CAST an eye on more than 13 million HumbleDollar pages over the past five years. Not surprisingly, many of those pageviews were garnered by the homepage, the latest articles page and the main money guide page. But what about the site’s articles? Here are the 30 best-read pieces since the site’s launch on Dec. 31, 2016:

Terms of the Trade (2019) by Jim Wasserman
Nobody Told Me (2020) by Jonathan Clements
Farewell Money (2019) by Richard Quinn
He Gets,

IT’S NEVER GOOD TO be self-indulgent, and that’s doubly true on a day like this. Still, while the rest of you relish the gifts that came your way this holiday season, let me offer a guided tour of my most prized possessions.
I now have a firm idea of what they are, thanks to a ruthless process of subtraction. I’ve spent the past four months throwing out and selling countless things I don’t greatly care about. 

TIME TO PLAY MARKET strategist. Trying to figure out what sort of U.S. stock returns we can expect over the next 10 years? Nobody knows for sure, of course. But we can at least think about it in a reasonably logical way—by using what some folks call the Bogle method.
What’s that? In a 1991 article for the Journal of Portfolio Management, Vanguard Group founder John Bogle—who died in January 2019—laid out a relatively straightforward method for estimating stock returns.

MY PORTFOLIO HAS evolved over my 35 years as an investor, as I’ve learned more and as new funds have become available. A total stock market index fund? Sure, I’ll consolidate money in that. An emerging markets index fund? Yeah, a modest stake looks promising. How about a small-cap value index fund? The academic literature says that makes sense.
Today, I own a dozen different Vanguard Group mutual funds, each giving me exposure to a different part of the global financial markets.

MILLIONS OF RETIRED baby boomers struggle financially, and yet they don’t eat avocado toast, don’t have a daily Starbucks habit and didn’t graduate college with a degree in women’s studies.
What’s my point? In the comments section of HumbleDollar, there are two recurring themes—that young adults spend recklessly and that college is of questionable value. I understand these concerns and even share them to some extent. But I’d favor a more nuanced view.

WHAT SEEMS OBVIOUS isn’t always true. Here are seven examples from the financial world:

Just because an investment has performed well doesn’t mean that’s a good guide to the future. This is usually mentioned with regard to stocks. But today, my bigger concern is folks who are extrapolating past bond fund returns. Their strong past performance was driven by a huge drop in interest rates over the past four decades—something that can’t be repeated starting from 2021’s tiny yields.

HOW DO WE KNOW we’re ready to retire? When I posted a link to Mike Drak’s recent article on HumbleDollar’s Facebook page, one commenter offered three questions that those approaching retirement should ask themselves:
1. Do I have enough? This, of course, is the question that gets asked most often. Do we have the financial wherewithal to carry us through a long and comfortable retirement?
2. Have I had enough? This may be easy to answer for folks who are lukewarm about their work,

THE S&P 500 STOCKS are up roughly 100% since March 2020’s market low. I’m 100% clueless about how much longer this remarkable run will last. But I’m 100% confident that, when the next downturn comes, many investors will rush for the exit, fearful that their stock holdings will soon be worth little or nothing.
Which brings me to one of the most important investment concepts: intrinsic value.
No, intrinsic value isn’t a simple notion and,

BURTON MALKIEL, in his bestseller A Random Walk Down Wall Street, recounts showing a stock chart to a friend who was a devotee of technical analysis.
“What is this company?” the friend asked Malkiel. “We’ve got to buy immediately. This pattern’s a classic. There’s no question the stock will be up 15 points next week.”
Problem is, the chart that Malkiel shared wasn’t that of an actual stock. Instead, it was the result of flipping a coin and then assuming the share price rose or fell each day depending on whether the coin came up heads or tails.

WE ALL TEND TO VIEW our money as a series of distinct financial buckets. Economists consider such “mental accounting” to be irrational, and perhaps it is. But it’s also mighty useful. Consider some recent articles from HumbleDollar’s writers:

Bill Ehart talked about the separate savings accounts he has for financial emergencies, a new car and his daughter’s wedding. Sure, it would be simpler and perhaps more rational to have a single savings account.

PANDEMICS MAKE US hungry and thirsty, or so say the monthly spending data from the Commerce Department’s Bureau of Economic Analysis.
In March 2020, as the pandemic hit with full fury, our collective spending on groceries jumped 23% from a month earlier. We can chalk that up to hoarding. Since then, monthly spending on groceries has never matched March 2020. Still, it also hasn’t fallen back to pre-pandemic levels, no doubt partly because of food price increases.

SUPPOSE THE S&P 500 ended the year at Friday’s close of 4455.48. Let’s also assume that the analysts at S&P Dow Jones are correct, and the S&P 500 companies have 2021 reported earnings equal to an index-adjusted $185.32. That would put the S&P 500 at 24 times earnings, versus today’s 34.8.
That would be considered high by historical standards, though it isn’t outrageous given today’s low interest rates. But what would it take for stocks to look like a compelling investment?

OTHERS MIGHT BE hoping to add to their wealth by picking the next hot stock. But here at HumbleDollar, we’re much more concerned about subtraction.
The goal: Keep more of whatever the financial markets deliver by minimizing investment costs and avoiding unnecessarily large tax bills. This is a reason to favor index funds. But even if we index, we need to be alert to another threat—that posed by the person in the mirror.

ON SEPT. 11, 2001, I spent an hour and a half standing on a crowded subway train two blocks from the World Trade Center. During that time, both towers collapsed. No smoke came shooting down the subway tunnel. The earth didn’t noticeably shake. There were no deafening noises. Instead, we were just another subway car packed with disgruntled passengers, muttering about the perils of public transport.
It was only when the train backed up to Penn Station in midtown Manhattan that we learned what had happened that day.

U.S. AND FOREIGN STOCKS are highly correlated, with monthly returns that move in the same direction almost all the time. Because of this, some have argued that there’s scant reason to diversify internationally.
But there’s a small problem with this argument: Just because investments move in the same direction doesn’t mean they generate the same return. For proof, consider the past 20 calendar years.
Over that stretch, there were only three years when U.S.

WHEN WE CHOOSE TO do one thing with our time and money, we’re also choosing not to do countless other things. The purchases made and the possibilities forgone sometimes turn into lasting regrets.
That is, to a degree, unavoidable. We often misjudge not only what we want today, but also the wants of our future self. Still, I firmly believe we can all do better—if we avoid impulsive decisions and instead spend time thinking through life’s key tradeoffs.

WE SAVE TOO LITTLE, spend too much and what we buy often disappoints. Is there an antidote for this financially self-destructive behavior? One intriguing possibility: visualization.
If you’re like me, the word itself makes you a little queasy. It conjures up images of both self-absorbed, navel-gazing yuppies (not something I aspire to be) and Olympic athletes getting in the zone (not something I’ll ever be). Still, I think there’s value in spending serious time pondering our financial goals.

FORGET BUYING A HOME or paying for college. In terms of complexity and cost, nothing comes close to retirement—a topic that encompasses saving, investing, taxes, Social Security, health care expenses and countless other financial issues.
Fortunately, there’s a growing body of research to guide us, and some of the best studies come from Boston College’s Center for Retirement Research (CRR). Here are just some of the insights I’ve lately garnered from CRR studies:
Valuing annuities.

IT’S RISKY TO LAY down hard-and-fast rules for money management because, for every rule, there will almost inevitably be exceptions.
Still, as they say, “nothing ventured, nothing gained.” Below you’ll find 18 rules. Want to quibble? Hey, that’s why HumbleDollar allows readers to comment on articles.
1. Minimize cash. With short-term interest rates so low, keeping money in savings accounts and money market funds seems especially grim right now. But the truth is,

SERIES I SAVINGS bonds have lately garnered a lot of investor interest because—if you buy during the current six-month purchase period—your initial annualized interest rate will be 3.54%. You’ll only earn that for the first six months. Thereafter, your yield will match the inflation rate. For bonds purchased between May and October, there’s no additional interest paid, over and above the inflation rate.
Still, the higher inflation climbs, the more interest your I bonds will earn.

WE JUST LAUNCHED our newest feature: A blog that’ll be updated two or three times a day with new posts that typically run some 300 words. These posts will, I hope, complement the site’s longer articles, which we’ll continue to publish, though perhaps less frequently.
Why introduce a blog? It’ll allow HumbleDollar to be more timely. It’ll be a way to tackle topics that don’t require full-length articles. And it’ll be another opportunity to highlight the financial philosophy that drives much of what we write—and what makes HumbleDollar different from most other financial sites:

We think harping on the stock market’s daily action is foolish and that the forecasts of Wall Street’s chattering class aren’t just worthless,

IF YOU THINK BITCOIN or any other cryptocurrency will one day be used as readily as dollars and cents, give some thought to this year’s volatility. Suppose you were using your bitcoin stash to pay your $2,000 monthly mortgage payment. Between April and today, the effective cost of your mortgage would have doubled—because bitcoin’s value has been pretty much cut in half.
Now, if you were paid in bitcoin and your mortgage payment was fixed at some value specified in bitcoin,

IF YOU WANT TO SEE your fellow citizens at their least appealing, look no further than online discussion forums. All too often, they’re a repugnant cesspool of anger, bullying and boastfulness. The comments posted on HumbleDollar are typically fairly civil, though even they occasionally veer toward the unnecessary nastiness that’s rampant everywhere else.
But here’s what these virulent commenters miss: Their postings reveal far more about themselves than about the subject they’re opining upon.

THERE’S NOTHING THAT deters financial planning like a scarily large price tag.
We should ask ourselves all kinds of tough financial questions. But many of the toughest never get asked—because we know answering them will involve agonizing choices, difficult conversations and unthinkable amounts of dollars. Consider these four:
1. How would you cope if you were out of work for six months? As I’ve noted in earlier articles, the big financial emergency isn’t replacing the roof or the air-conditioning system,

WHAT WORRIES ME? It isn’t the stock market, but rather stock market investors.
Despite all the hand-wringing, this doesn’t strike me as an especially dangerous time to own stocks. Corporate earnings are rapidly recovering from last year’s economic shutdown—not exactly a scenario where you’d expect a big stock market decline. Meanwhile, bonds and cash investments are offering scant competition for investors’ dollars, which is another reason to be bullish on stocks.
But even if the overall market appears no riskier than usual,

EMERGENCY MONEY IS dead money—and it’s rarely looked more dead.
Just as we shouldn’t carry more insurance coverage than we really need, we shouldn’t hold more emergency cash than necessary. Why not? Excessive money spent on insurance and kept in our emergency reserve will likely come with a hefty opportunity cost. Indeed, thanks to the double whammy of inflation and taxes, our cash reserve will slowly depreciate, and that’s especially true given today’s rock-bottom interest rates.

IT MIGHT SEEM LIKE an obscure academic question: Do stocks truly follow a random walk or can we count on them reverting to the mean? Depending on which side we favor in this debate, it can make a huge difference to how we invest—and to our confidence as investors.
Like me, many HumbleDollar readers have most or all their investment dollars in index funds. A key reason we invest this way: It’s impossible to predict which stocks will shine because they follow a random walk.

WHAT DOES IT TAKE to manage money prudently? Yes, we should save diligently, favor stocks, diversify broadly, hold down investment costs, buy the right insurance and so on. But all these smart financial moves stem from key assumptions we make about our lives and the world around us.
What assumptions? I believe prudent money management starts with five core notions—which, as you’ll discover below, sometimes contradict one another:
1. We’ll live a long life.

I JUST HAD MY SIXTH bicycling accident—which made me think about my investment portfolio.
I started cycling seriously in 2005, when foot problems forced me to cut back on running. That was the year I bought my “starter” bike—part aluminum, part carbon—purchased for $1,000 from a bike shop that was going out of business. Within a few months, I added the special pedals with the shoes that clip in.
Early on, I had my fair share of embarrassing falls,

IF WE WANTED TO design a portfolio that appeals to our worst investment instincts, we might couple a savings account with lottery tickets. Some governments have even issued bonds with just these characteristics.
What’s the attraction? The savings account ensures that part of our portfolio never loses value, while the lottery tickets let us dream of riches in return for a relatively small investment.
This year, we’ve seen the lottery-ticket mentality writ large, as investors take fliers on meme stocks,

WE ALL HAVE LIMITED time and limited money. How can we make the most of these two scarce resources?
More than anything, the answer lies in getting the big picture right. That means thinking through the tradeoffs involved, so we don’t allocate too much time and money to some parts of our financial life, while neglecting others.
On that score, it’s hard to offer hard-and-fast rules because personal preferences play a key role. Still,

RETIREMENT MAY MARK the end of fulltime work—but that doesn’t mean we should stop working on our finances. Even after we quit the workforce, there’s much we can do to strengthen our retirement plan and, indeed, that may be necessary if we find we’re drawing down our nest egg too quickly.
Are you concerned that you might outlive your savings? Consider these six financial tweaks:
1. Work part-time. I’ve heard folks claim that if you’re still doing some work for pay,

THE ECONOMY IS recovering and the stock market has recovered. The pandemic isn’t over, but it seems we’re past the worst, at least in the U.S. Feeling better? Take a deep breath, take a step back—and think about the past two decades.
Since early 2000, we’ve had three major stock market declines, or roughly one every decade:

In 2000-02, the S&P 500 tumbled 49%, excluding dividends. The first leg down was triggered by the bursting of the dot-com bubble.

MY FATHER LOATHED the idea that he would spend his final years in a nursing home. In the end, he never had to confront that possibility: At age 75, while riding his bicycle, he was struck and killed by a speeding car.
Still, I think often about his reluctance—because I share it. Despite exercising every day, I know I’m not as flexible or as fast as I once was, and it takes longer for the stiffness in my muscles to ease each morning.

IS THIS A TIME TO be fearful? In Berkshire Hathaway’s 1986 annual report, Warren Buffett wrote, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Make no mistake: There’s plenty of greed on display right now, whether it’s bitcoin, nonfungible tokens, Robinhood traders, GameStop or special purpose acquisition companies. All of this has some observers talking of a market bubble. Indeed, I suspect much of this nonsense “will end in tears,” a phrase my mother often used when trying to control her four rambunctious children.

WARREN BUFFETT doesn’t have the best investment record over the past three decades. That accolade apparently belongs to Jim Simons. Buffett also isn’t the world’s richest person. In fact, he hasn’t held that title for the past dozen years and currently ranks No. 6, with barely half the wealth of today’s richest person, Jeff Bezos.
I doubt Buffett feels bad about this. Is your surname neither Simons nor Bezos? I don’t think you should feel bad,

WHEN WE’RE YOUNGER, we tend to focus almost exclusively on our portfolio’s performance. But as we grow older, risk becomes a bigger concern. The irony: That greater focus on risk is often the key to better long-run investment results.
Want to make wiser portfolio choices? Keep these nine notions in mind:
1. Bad results happen to good investors. Let’s start with one of the most counterintuitive notions in investing: Just because we score spectacular short-term gains doesn’t mean we made smart decisions—and just because our portfolio struggles in the short run doesn’t mean we got it badly wrong.

GET TO KNOW OUR NEW website: BraggingBucks.com. Intended as a sister site to HumbleDollar, the new website is designed for those who can’t quite shake that hankering for market-beating returns.
It’s become clear that notions like indexing, diversification and a sense of contentment have limited appeal—and that many folks want more excitement from their financial life. Perhaps an occasional flier on a hot stock. Or playing the commodities market. Or going from all-stocks to all-cash and then back again.

ARE FINANCIAL MARKETS in a bubble? It’s a question I’ve never liked. I believe stocks and bonds are fairly valued most of the time, which means it’s extraordinarily difficult to beat the market averages and our best bet is to buy index funds.
But at the same time, during my adult life, there have been three key occasions when markets lost touch with reality: Japanese stocks and real estate in the late 1980s, technology stocks in the late 1990s and housing in the mid-2000s.

THERE ARE MANY WAYS to fritter away our wealth. Pay high investment costs. Day trade stocks. Buy timeshares. Marry a spender. Purchase variable annuities. Retire too early. Buy leveraged exchange-traded funds. Mimic the spending of our wealthy friends. The list goes on and on.
But anybody can ruin themselves slowly—and plenty of people do. What’s really attention grabbing is when it happens quickly. Want to blow up your financial life? Here are nine ways to ruin yourself in a hurry:
1.

HERE’S A COMMENT I’ve heard countless times in recent years: You should claim Social Security early because you’ll enjoy the money more in your 60s and because you’ll spend less later in retirement.
I think this is nonsense that rests on three wrongheaded assumptions:

That spending needs should drive when you claim Social Security.
That you will indeed spend less each year as you age.
That you’ll be better able to enjoy whatever money you have in your 60s than later in retirement.

HAPPINESS RESEARCH fascinates me—and I’m not alone. Many of the insights uncovered by economists and psychologists have caught on with the general public, influencing countless life decisions.
Do you favor experiences over possessions? Do you strive to keep your commute short? Do you pause occasionally to ponder the good things in your life? Whether you realize it or not, you’ve likely been influenced by happiness research.
But it turns out that there are two popular insights that we need to unlearn—because they haven’t held up to close scrutiny:

Have you heard that happiness caps out at an income of $75,000 a year?

THRIFTY. FRUGAL. CHEAP. Pick the adjective you favor, and you could apply it to me.
I’ve spent almost my entire adult life being financially careful. I haven’t carried a credit card balance or overdrawn my checking account since my early 20s. I was an early convert to low-cost index funds. When I worked at The Wall Street Journal and at Citigroup, I brought my breakfast and a thermos of coffee to the office every day,

IF YOU SAW $20 ON the sidewalk, you’d pick it up, right? Unfortunately, when we buy stocks and stock funds, there are no guarantees we’ll emerge a winner. But elsewhere in our financial life, $20 bills abound—and it often takes little effort and scant risk to grab this free money.
Looking for some easy financial wins? Here are 15 of them:

If you’re eligible for a Roth IRA and you have the spare cash to fund the account,

I TURN AGE 58 TODAY—and, a few days ago, HumbleDollar turned four. The good news: Only one of us is slowing down.
In 2020, HumbleDollar garnered 3.6 million pageviews, up from 2.6 million in 2019, 1.7 million in 2018 and 900,000 in 2017, which was our first year. Here’s a closer look at those numbers and what’s been happening here at HumbleDollar:

Earlier this week, I posted a list of the 20 most widely read articles from the past four years.

OVER THE PAST FOUR years, readers have a cast an eye on almost 8.8 million of HumbleDollar’s pages. But which have they looked at most often? Below are the 20 most widely read articles since HumbleDollar’s launch at year-end 2016:

Terms of the Trade (2019) by Jim Wasserman
Nobody Told Me (2020) by Jonathan Clements
Farewell Money (2019) by Richard Quinn
He Gets, She Gets (2020) by James McGlynn
Don’t Delay (2020) by Dennis Friedman
The Taxman Cometh (2020) by James McGlynn
Still Learning (2019) by Richard Quinn
Don’t Get an F (2019) by James McGlynn
My Four Goals (2020) by Jonathan Clements
27 Things to Do Now (2020) by Jonathan Clements
Farewell Yield (2020) by Jonathan Clements
Ten Commandments (2018) by Richard Quinn
Enough Already (2017) by Jonathan Clements
Flunking the Test (2020) by Richard Connor
The Tipping Point (2018) by Jonathan Clements
12 Investment Sins (2020) by John Lim
This Too Shall Pass (2020) by Richard Connor
Unanswered (2018) by Jonathan Clements
45 Steps to Success (2019) by Jonathan Clements
The $121,500 Room (2018) by Joel M.

YES, MONEY BUYS STUFF—and we all need some stuff. But that’s probably its most prosaic use. Want to make the most of the dollars that pass through your hands? Here are a dozen other things that money can buy:

The warm glow that comes from helping those who are less financially fortunate.
The extra time you purchase by hiring someone to do chores you dislike.
The fun of daydreaming about all the experiences and possessions you might buy.

OUR MOST PRECIOUS resource is time. I’m determined to waste as little as possible.
Unless we’re at death’s door, none of us knows how much time we have, but we all know it’s limited. Yes, money is also limited—but, if we squander money, there’s always a chance we can make it back. Time lost, by contrast, is gone forever.
My preoccupation with time and its dwindling supply has grown as I’ve grown older. I may be patient with my investments,

IF MONEY ISSUES HAD the urgency of a broken air-conditioning system on a 100-degree day, we’d all be in great financial shape.
But all too often, financial troubles are years in the making. We bumble along, vaguely aware that things aren’t quite right. Sure enough, one day, the red lights are flashing and the alarm bells are ringing. But by then, it’s usually way too late to fix the problem—because the fix required taking action years earlier.

THE MARKETS AREN’T predictable—but the talking heads sure are. Like a dog with a favorite fire hydrant, financial commentators return to the same themes again and again.
The silver lining: There’s no need to waste hundreds of hours in 2021 reading the business section and watching financial news channels, because we already know what the pundits will be saying next year—and probably the year after that and the year after that. Look for these seven stories in 2021:
1.

HOW DO WE GET FROM here to retirement? Amid the financial markets’ daily turmoil, it might seem like one big crapshoot.
But in truth, navigating this journey is pretty straightforward, because there are just five key variables—our time horizon, current nest egg, savings rate, target nest egg and investment return. With a few tweaks to these “dials,” we may discover it’s far easier to reach our retirement goal. Which dials are most effective? Much depends on how close we are to retirement age.

MONEY IS IMPORTANT. But how do we ensure it has the right importance in our life—and no more? Here are 11 signs we’ve got it about right:

We aren’t jealous of others or lust after the things they have.
We borrow when we must—but we never borrow so much that we stress ourselves out today or put our future self at risk.
We consciously spend a little less today so we enjoy the long-run happiness that comes with money in the bank and the knowledge that we can cope with financial adversity.

KEEP AN EYE ON THE neighbors. They could be the reason you’re poor and unhappy.
We all like to think we’re independent thinkers who weigh the evidence and reach our own conclusions—and yet there’s ample evidence that our views are heavily influenced by those around us, whether we’re choosing presidential candidates, bottled water or mayonnaise. This extends to financial matters, sometimes with grim consequences.
Stocking up. Studies have found that those who live near one another tend to invest in a similar fashion.

THROUGHOUT THE DAY, we make countless snap judgments, often without realizing it. Think about navigating the grocery store. This involves a blizzard of decisions—which brand, what size, whether it’s good value, will it stay fresh—and yet we do so almost effortlessly.
Most of the time, this is a good thing. If we carefully pondered the assumptions behind every judgment we make, life would become painfully unproductive. Still, it’s helpful occasionally to question whether we’re misjudging the world,

WHY DO WE MAKE spending decisions that we later regret? Yes, we tend to live for today and give scant thought to tomorrow. But it’s more complicated than that—which brings me to four insights from psychology.
I find the insights below fascinating, in part because they describe how I behave with uncanny accuracy. Many readers, I suspect, will also catch a glimpse of their own behavior:
Moral licensing. If we do something good—exercise,

IT’S HALLOWEEN, but not much frightens me—at least financially. My portfolio is broadly diversified, I have the insurance I need, and I have enough set aside for retirement. The highly improbable could happen, but I’m not going to lose sleep over that.
Still, even for those of us in decent financial shape, I see two key reasons for concern. We have no control over either—which is why they might seem scary—but we can take steps to limit the potential fallout.

WE FIGHT ABOUT MONEY all the time. Politicians argue over how to spend the stuff and who should pay. Couples argue about why there isn’t enough and who’s to blame. And nerdy folks—that would include me—bicker over which investments to buy, when to claim Social Security, the virtues of homeownership and countless other topics.
These debates may amuse others, but I often find them frustrating—because they’re never just about facts and logic. Instead, far too many people come to these arguments with baggage that borders on cargo.

THIS YEAR’S PANDEMIC has unleashed financial turmoil for many American families, so data from last year might seem irrelevant. Still, there’s one set of 2019 data that deserves our attention—the Federal Reserve’s latest Survey of Consumer Finances, which was released last month.
Conducted every three years, the survey is perhaps the most in-depth look we get at the state of America’s personal finances. For the 2019 survey, 5,783 families (who may be individuals living alone) were interviewed at length about their income,

LET’S START WITH the obvious: If you buy high-quality bonds today, you’ll collect very little yield—and there’s an excellent chance you’ll lose money once inflation and taxes are figured in.
Take Vanguard Total Bond Market ETF, which aims to track U.S. high-quality taxable bonds. It yields some 1.2%, which is below the 1.7% expected annual inflation rate for the next 10 years, and the amount you pocket will be even less after deducting taxes.

MINDFUL. INTENTIONAL. Purposeful. These are the buzzwords of our time—and they make me slightly queasy, with their whiff of self-centered, self-satisfied self-indulgence.
Yet it seems those are my goals.
On Monday, a moving van will arrive to take my worldly possessions to a house in Philadelphia that, I hope, will be my last. All this has made me ponder what I want from the years that remain. Three items top my wish list:
Do good work.

THERE ARE FINANCIAL issues on which reasonable people can disagree. This article is not about those issues. Instead, it’s about issues where people disagree—because one side has a fundamental misunderstanding.
These misunderstandings, I fear, are leading folks to shortchange themselves financially—and we’re talking here about some of the most important money decisions we make. Examples? Based on the comments I’ve received, here are three widespread misconceptions:
1. Commissions equal trading costs. If you think it’s free to trade stocks because you aren’t paying a brokerage commission,

MANAGING MONEY is ridiculously simple—and unbelievably hard.
Figuring out what we should do with our dollars is typically straightforward: We should save regularly, diversify broadly, rebalance occasionally and so on. Instead, the tough part is getting ourselves to do what we intellectually know is right.
Take the notion of buying low and selling high. Every investor knows that’s the goal—and yet, when the S&P 500 slumped 34% earlier this year, many folks just couldn’t bring themselves to buy stocks.

EVERY SO OFTEN, I’m asked about my biggest investment mistakes—and I really don’t have much to say. Yes, like many others, I dabbled in individual stocks and actively managed mutual funds early in my investing career. Yes, like everybody who’s truly diversified, there are always parts of my portfolio that are generating disappointing short-term results. But such things don’t cause me any regrets.
Instead, as I look back, my big financial regrets fall into four buckets:
Pound foolish.

TO MANAGE OUR MONEY better, often we don’t need to know more. Instead, we need to unlearn what we think we already know.
Here are just some of the things that, at various points in my 35-year investing career, I’ve thought I’ve known:

Which fund managers will outperform.
Which way the economy is headed.
What’s next for interest rates and share prices.
Whether the overall stock market is overvalued or not.
Which individual stocks will beat the market.

TODAY, I SING THE praises of spending—on the little things in life.
We fiercely resist the suggestion that money doesn’t buy happiness. Commentators will often trot out the quote—which has been attributed to all kinds of folks—that, “I’ve been poor and I’ve been rich. Rich is better!”
I think that’s true. But it isn’t proportionally true. If you went from earning $100,000 a year to earning $200,000, or your portfolio grew from $500,000 to $1 million,

IT SEEMS QUAINT NOW, but a quarter century ago conversations would often degenerate into arguments over facts. How much do homes typically appreciate? How much does the average American have saved by retirement? What does a nursing home cost? Such questions would trigger tedious debates built on anecdotal evidence and half-remembered newspaper articles.
But as my father—who died in 2009—often remarked during the final decade of his life, there’s no point anymore in arguing over facts.

FOR THOSE WHO KNOW their A.A. Milne, they’ll recall Eeyore as Winnie the Pooh’s perennially gloomy donkey friend. Which brings me to my inner Eeyore—and a thought provoked by the stock market’s astonishing recovery.
Now that the S&P 500 is once again hitting new highs, it’s time to prepare for the next bear market. No, I haven’t reduced my stock holdings as share prices have bounced back and, no, I’m not predicting that another crash is imminent.

WHEN A FAMILY OPTS to purchase a Mercedes rather than a Subaru, the rest of us might think they’re being extravagant. But you likely won’t find many people saying, “How stupid is that? They could’ve got around town for half the price.” We accept that a car isn’t a strictly utilitarian purchase.
But we aren’t nearly so forgiving when it comes to “suboptimal” investment and personal finance decisions. Today’s contention: We shouldn’t be too quick to deride the money choices made by others—and,

THREE WEEKS AGO, I wrote about my plan for generating retirement income, including my intention to make a series of immediate fixed annuity purchases. Immediate annuities are a profoundly unpopular product, so I was surprised when the article generated a slew of questions from readers.
Perhaps that interest reflects today’s miserably low bond yields, which have left immediate annuities as one of the few ways to generate a safe and sizable income stream. Intrigued?

“BUYING THE DIP.” It’s a phrase often uttered with contempt by Wall Street strategists and money managers, who look down their nose at everyday investors who instinctively shovel more money into stocks simply because share prices have fallen.
Commentators “caution against” it, dismiss it as “not an investment strategy,” predict it’s going to “die,” argue it could get “very, very nasty” and contend that—when everyday investors buy on dips—it’s a “contrarian signal.” And I got all that based on a quick internet search.

WELCOME TO OUR new daily market report, which we’re going to run exactly once, which is probably once too many. In market action yesterday, stock prices fluctuated—a development that shocked market observers who noted they hadn’t seen anything like that since the day before.
“If we can stay above the psychologically important 3,200 barrier, that’ll create an important support level that could build a base for a new bull market,” opined market strategist Ross Nodamus,

IT’S NEVER BEEN cheaper to build a globally diversified portfolio of index funds. In fact, today, you could invest $100,000 and pay just $10 in annual fund expenses—equal to the cost of two Big Macs and a large fries.
Moreover, you don’t need $100,000 to build that portfolio. Not even close. The funds in question—which are managed by Fidelity Investments—have no required investment minimum, which means your four-year-old could start investing with the contents of her piggybank.

I’M PROBABLY A YEAR or two away from regularly tapping my portfolio for income. That prospect—coupled with this year’s market turmoil—has led me to tinker with my investment mix and ponder how I’ll generate cash once I’m retired. One surprising result: I have more in stocks today than I’ve had at any time in the past three years, and I’m thinking of increasing my allocation even further.
Since 2014, I’ve thought of myself as semi-retired.

WE DON’T PURSUE MONEY just to put food on the table and a roof over our head. Instead, the hope is to enhance our life. On that score, it seems we aren’t doing terribly well: Our reported level of happiness is no higher than it was half a century ago.
Could we do better? I believe so. There’s been extensive research on happiness in recent decades. For those who want to dig into the details,

“NICE OFFICES,” OFFERED the 30-something investor, as he cast a wary eye across the corporate art, barren desks and empty bookshelves.
“Yeah, we asked management if they could put us on the 12th floor, so our suite number could be 12b-1. Funny, right?” The financial salesman winked.
“Not sure I get it.”
“It’s a joke, but clients never get it, they pay it.”
“What qualifications do you have?”
“See those initials after my name?

IT’S INDEPENDENCE Day. But how truly independent are we, both financially and in our thinking? The two, I believe, are inextricably entwined.
Whether it’s the TV shows we watch, the political views we hold or the investments we buy, we often take our cues from family, friends and colleagues. They, in turn, may be influenced by advertising and the media. But however ideas get spread, the result is that most of us aren’t the fiercely independent thinkers we imagine.

YOU KNOW THOSE timeless financial principles? Sometimes they don’t age so well.
Since I started writing about money in 1985, all kinds of financial principles have gone out the window—and that’s continued right up until 2020. Indeed, if you’re still hewing to the financial wisdom of the 1980s, you’re likely hurting yourself today. Here are four examples:
1. Goodbye, Peter. In the late 1980s, America’s most celebrated fund manager was Fidelity Magellan’s Peter Lynch.

WE ALL WANT THE GOOD life, though we’d likely differ on what exactly that is. Still, our wish list might include things like meaningful work, a robust network of friends and family, minimal money worries, service to others, good health, a long life, and a sense of both serenity and purpose.
What stands in our way? As we strive to make the most of the limited time we’re given, it’s worth pondering how we’re constrained and what we can do to improve our lot.

THEY’VE LONG BEEN endangered, but 2020 may mark their demise: After four decades of falling interest rates, it seems safe investments offering attractive yields have finally disappeared.
At 0.7%, the payout on 10-year Treasury notes is below the 1.2% expected inflation rate for the next decade. High-quality corporate and municipal bonds offer more generous after-tax income, but hardly enough to excite investors. In the years ahead, the yield-obsessed will no doubt turn to riskier fare—high-dividend stocks,

DOES OUR PERSONALITY help determine our financial success? It seems it does, or so says academic research.
Psychologists have zeroed in on five key personality traits: extraversion, conscientiousness, agreeableness, neuroticism and openness to experiences. Think of each trait as a spectrum from, say, very conscientious to not at all. Each of us sits somewhere on the five spectrums. Maybe we’re a bit of an extravert, somewhat inclined toward neuroticism, and extremely open to new experiences and ideas.

WHEN I WAS A TEENAGER and bathroom walls were the equivalent of today’s Twitter, you’d often read that “100,000 lemmings can’t be wrong.”
It turns out that the bathroom scribblers were misinformed and that lemmings aren’t, in fact, given to mass suicide. Still, the scribblers’ confidence in the wisdom of crowds was spot on. If 100,000 lemmings did indeed commit mass suicide, there would likely be a good reason.
Which brings us to today’s stock market.

IT’S BEEN AN UNHAPPY few months. Stepping outside means risking our health. One out of six U.S. workers is unemployed or soon will be. The stock market has suffered its worst decline since 2007-09. And while we can take steps to help ourselves, the situation is largely out of our control.
Feeling glum? One of my abiding interests is happiness research, and that research offers ideas that can make our current situation a little cheerier.

THIS SHALL PASS—just not as quickly as any of us would like.
I’m talking about the bear market, but the same sentiment applies to both the coronavirus and the economic slowdown. Indeed, the three are inextricably entwined, with share prices the twitchy indicator that tells us the mood of the moment.
Amid the swirl of news—the latest fatality count, the unemployment claims, the Dow’s daily action—it’s easy to get unnerved and start second-guessing our investment strategy.

IT’S A SCARY TIME to own stocks. But for long-term investors who want their portfolio to clock significant gains, there’s simply no alternative.
To be sure, you could throw in your lot with the market-timing crowd, who are currently hiding out in bonds and cash investments. Their plan: When we get the final climactic plunge in share prices that sends the market back to valuations not seen in four decades, they’ll swap into stocks and ride the next bull market to astonishing wealth.

ON WALL STREET, there’s a story—apocryphal, I suspect—that’s told about an old trader, a young trader and the 1962 Cuban missile crisis.
Old trader: “They say this could lead to nuclear war.”
Young trader: “So we should buy bonds, right?”
Old trader: “No, we should buy stocks. If we don’t get war, the stock market will rally. And if we get a nuclear war, it won’t matter what we own.”
Today’s pandemic won’t lead to nuclear war (except perhaps in the Oliver Stone movie version).

WE’RE IN THE MIDST of a bull market—in talking. Stuck at home with our families, we’re chatting more with each other, while also frequently touching base with friends and family whom we can’t see in person.
How about devoting some of these conversations to money?
I’m not going to claim that, if we had more frank discussions about money, it would solve all of our financial problems. I’ve seen enough damning data and heard enough horror stories to know that many folks will make huge blunders,

INVESTING IS A GAME of subtraction—and I’m not talking about this year’s stock market decline.
Wall Street sells the fantasy of market-beating returns, using it to seduce investors into adding new stocks and funds to their holdings. Result? Performance-chasing investors cobble together badly diversified portfolios that they imagine will beat the market, while overlooking the hefty costs that Wall Street charges. This is a strategy that’s almost guaranteed to make heaps of money—for brokerage firms and money managers.

GOT QUESTIONS? WE’VE got answers. This week, a new chapter was added to HumbleDollar’s online money guide. The chapter’s goal: to tackle basic financial questions that often crop up, especially among those new to the world of investing and personal finance.
This might seem like an iffy moment to make financial changes. I’d argue just the opposite is true. With the stock market down sharply, this is a great time to get started as an investor.

IT’S BEEN AN unpleasant seven weeks for the stock market. Is it over? I have no clue. Still, last week’s rally offered investors at least a temporary respite. My suggestion: Use this moment to think about the market’s recent rollercoaster ride—and how you’ve handled it emotionally.
Financial experts distinguish between risk capacity and risk tolerance. It’s a useful distinction. Risk capacity is our objective ability to take risk based on our personal situation, notably the reliability of our paycheck and our investment time horizon.

THE PLOT, THE SCRIPT and the characters may have changed. But we’ve seen this movie before.
The current stock market swoon strikes many folks as unprecedented: It’s the frantic financial sideshow to a devastating global tragedy—one that’s seen 1.1 million people fall ill and 60,000 die, with every expectation that the numbers will be many multiples worse before the COVID-19 pandemic is over.
Yet, on closer inspection, 2020’s bear market doesn’t seem so different from earlier market declines.

IT’S BEEN A TAD OVER five weeks since the S&P 500 hit its all-time high. Five weeks have never felt so long.
It isn’t just all the articles that I’ve been writing and editing. I’ve also been busy with my own finances. I was on the verge of closing on the sale of my apartment here in New York and moving to Philadelphia. But then my buyer’s business collapsed amid the coronavirus slowdown and,

TIMES LIKE THESE test the mettle of investors. Want to pass the test? Here are 27 things to do now:

Keep buying stocks. Remember your regret at failing to load up on bargain-priced shares in early 2009? Don’t make that mistake again.
If you’re panicked and tempted to dump stocks, talk to a friend or, alternatively, hire a financial advisor—one required to act as a fiduciary—to coach you through this decline.
Ponder what makes you happy.

I DON’T KNOW WHEN the coronavirus will stop spreading, when we’ll have a vaccine and how much the economy will slow. I also don’t know at what level the stock market and interest rates will hit bottom—or whether we’ve already seen the worst. And nobody else does, either. But that doesn’t mean we should all just sit on our (frequently washed) hands.
While we don’t know how bad things will get, we’ve seen this movie before.

IS THE STOCK MARKET swoon messing with your head? You don’t want to make this market decline any worse than it has to be. To that end, here are 10 steps that’ll help preserve your sanity and your portfolio:

Avoid touching both your face and leveraged exchange-traded index funds.
Change the password on your investment accounts to “ItsTooLateToSell.”
Downgrade your opinion of investors based on their degree of hysteria.
Don’t watch Contagion,

I’M MANAGING MY MONEY with an eye to making it last another three decades. And yet, everywhere I turn, it seems somebody’s insisting I pay attention to what’s happening in the financial markets right now.
This isn’t just a coronavirus phenomenon. It is, alas, standard operating procedure for the financial media.
I understand the game. I’ve spent most of my career as a journalist, so I realize it’s no small undertaking to fill up a newspaper,

IT’S COME TO THIS: I’m writing an article discussing the virtues of EE savings bonds. To be sure, I’m not currently planning to buy them myself. But they could make a fine investment for more conservative investors who are happy to sit tight for the next two decades.
Yes, the current yield on EE savings bonds is a mere 0.1%. But if you hold EEs for 20 years, the Treasury Department guarantees that your savings bonds will double in value,

HERE’S THE LEAST surprising thing you’ll read this week: You can’t control the financial markets. They’re driven by news—and we simply don’t know what news we’ll get in the weeks and months ahead, whether it’s about the spread of the coronavirus, its impact on the global economy or something else entirely.
But don’t despair: There’s also much that we can control, including how much we save and spend, the amount of investment risk we take,

IMAGINE COVID-19 caused the U.S. economy to shrink 4%. What sort of drop in share prices might this trigger?
As it happens, we already know the answer. Over the 18 months through mid-2009, U.S. inflation-adjusted GDP slipped 4%. Investors—panicked over what the future might bring—drove down the S&P 500 stocks by a jaw-dropping 57%.
In retrospect, this seems like a bit of an overreaction.
To be sure, late 2008 was a wild time. It felt like the global financial system was on the verge of total collapse.

AFTER YEARS OF handwringing, you finally concede that it’s all but impossible to beat the market over the long haul, so you shift your portfolio into index funds. Next up: the truly tough decisions.
Almost every writer for—and reader of—HumbleDollar is a fan of indexing, and there’s no doubt that index funds are a wonderful financial tool. But how will you use that tool? Let the bickering begin.
The differences of opinion show up among the articles we run on HumbleDollar.

I AM AGE 57 AND I’M planning to move, so you might imagine I’d be interested in the best states to retire. On that score, there’s plenty of advice available.
Bankrate says the best option for retirees is Nebraska, followed by Iowa, Missouri, South Dakota and Florida. Meanwhile, WalletHub gives the nod to Florida, with Colorado, New Hampshire, Utah and Wyoming rounding out the top five. Want a third opinion? Blacktower Financial Management puts Iowa at No.

I HAVE DEVOTED MY entire adult life to learning about money. That might sound like cruel-and-unusual punishment, but I’ve mostly enjoyed it. For more than three decades, I’ve spent my days perusing the business pages, reading finance books, scanning academic studies and talking to countless folks about their finances.
Yet, despite this intense financial education, it took me a decade or more to learn many of life’s most important money lessons and, indeed, some key insights have only come to me in recent years.

ON THIS DAY IN 1888, George Cope died at age 65. Two days later, he was buried in Anfield Cemetery in Liverpool, England, where his younger brother Thomas had been laid to rest 40 months earlier.
Together, in 1848, the two brothers had launched a successful tobacco company, which would be acquired more than a century later by Gallaher Group, then a major U.K. multinational tobacco producer. Gallaher itself would subsequently be bought by Japan Tobacco.

FOR THREE YEARS, I lived on Roosevelt Island, in the middle of New York City’s East River. It’s a wonderful place—a quiet, friendly, low-crime oasis in the middle of one of the world’s largest, most frenetic cities.
During my time there, the Franklin D. Roosevelt Four Freedoms Park opened on the island’s southern tip. The park is named after a 1941 FDR speech, where he articulated “four essential human freedoms”: freedom of speech, of worship,

MOST OF US WANT to help our children financially. But we also want to avoid thwarting their ambition or unintentionally instilling bad money habits. And, no, this isn’t just a problem for the wealthy: All too many kids who grow up in middle-class households end up as financially irresponsible adults.
How can we avoid that fate, while still helping our children financially? Below are five strategies. The first three are cost-free and the other two don’t necessarily require serious sums of money:
1.

I USED TO THINK anybody could be taught to manage money sensibly. I no longer believe that.
When I was in my 20s and scraping by on a junior reporter’s salary, I had some sense for the financial stress suffered by everyday Americans. But after a handful of years of diligently saving, I was able to escape those daily worries. Many Americans, alas, never do.
This was hammered home when I recently took the financial well-being questionnaire offered by the Consumer Financial Protection Bureau (CFPB).

BEEN A DILIGENT saver during your working years? Upon retirement, you’ll likely find it tough to transform yourself into a happy spender. This is not a problem you’ll read much about—because it isn’t exactly a widespread affliction.
The fact is, most folks struggle their entire life to control their spending, only to reach retirement with too little saved. At that point, they have no choice but to tighten their belt. Indeed, the statistics are alarming.

WE’RE THREE-YEARS-old, and we’ve grown to become something I never intended. When I launched HumbleDollar on Dec. 31, 2016, my plan was to take my money guide—which had previously appeared as an annual paperback—and make it freely available on the web. I also had plans to write an article every week or so and have others occasionally blog for the site.
Since then, HumbleDollar has morphed into a fulltime job that doesn’t pay me a salary and a site that—I like to think—occupies a small but unique place in the internet’s ongoing financial conversation:

Readers visited 937,000 of the site’s pages in 2017,

DEAR READER, I MAY write for you. But I also write for myself. Many of my articles grow out of intriguing ideas I stumble across or half-baked notions I want to explore further. The next thing I know, I’m scouring the internet for additional information and typing furiously on my laptop, all because I’m interested—and I hope you will be, too.
The good news is, after 34 years of writing about finance, I’m still learning things and still tripping across topics I’m curious about.

WANT TO TAKE SOME simple steps to improve your life, as well as that of those around you? Here are 11 things to do today:

Look somebody in the eye and say, “Thank you so much. I really appreciate it.”
Stop talking about yourself and, instead, ask folks about their life.
Throw out something you’ve been meaning to get rid of.
Read an article by somebody you disagree with—and think hard about whether he or she might be at least partially right.

“DON’T STOP THINKING about tomorrow,” sang Fleetwood Mac. It’s a shame they weren’t financial advisors.
We save money today so that we—or our heirs—can spend at some point in the future. A good tradeoff? I strongly believe that it is, and you wouldn’t be a HumbleDollar reader if you disagreed. Still, during this season of holiday shopping joy, it’s worth reminding ourselves that, yes, we should indeed think about tomorrow.
Living for Today.

THE INDEX FUND fee-cutting battle reached its seemingly inevitable conclusion more than a year ago, when Fidelity Investments launched four zero-cost index funds. You can’t get any lower than zero, right? Apparently, you can. One small fund company is now effectively paying investors to own one of its index funds.
Still, the price war among financial companies has clearly moved on, with some firms eliminating brokerage commissions in 2019 or touting the high interest rate paid by their brokerage cash account.

WHAT DOES IT TAKE to succeed financially? Pundits love to parse stock market returns, dig into the minutiae of Roth conversions and debate retirement withdrawal strategies. Yet, when asked what’s the most important financial virtue, almost all give the same answer: great savings habits.
That mundane reason certainly explains my financial success. Yes, I’ve benefited from owning index funds, holding a stock-heavy portfolio and buying enthusiastically during market declines. But all of that has been gravy.

WE ALL DO THINGS that make us feel good right now, but which aren’t so good for us over the long haul. Yes, even me. Yes, even you.
Some of this behavior stems from hardwired instincts passed down to us from our hunter-gatherer ancestors, like our tendency to consume whenever we can and to focus too much on today, while giving short shrift to tomorrow. Other damaging behavior is the result of habits we’ve developed,

LOGIC AND DATA MAKE it abundantly clear that we’re highly unlikely to beat the market averages—and that indexing is the best strategy for the vast majority of investors. Yet half of U.S. stock fund assets remain actively managed and, for money that isn’t in mutual funds, the percentage is likely far higher.
That brings me to today’s contention: Maybe we should spend less time making the case for indexing. Instead, perhaps we should focus on the more obvious conundrum: If beating the market is a game that we’re extraordinarily unlikely to win,

WHEN WE THINK ABOUT portfolio building, we tend to think first about stocks. They’re our engine of investment growth—and the source of endless anxiety. Indeed, to make stock market investing palatable, we take all kinds of precautionary measures, including diversifying broadly, adding bonds, throwing in cash, purchasing gold and goodness knows what else.
But maybe we have this all wrong. Perhaps, instead, we should start with cash: how much we currently have in safe,

U.S. STOCKS HAVE BEEN at nosebleed valuations for much of the past three decades—or so say the yardsticks used to measure stock market value. But what if the problem isn’t the lofty price of stocks, but rather the yardsticks we’re comparing them against?
When we try to gauge whether shares are pricey or cheap, we typically look at the dividends that companies pay, the profits they generate and the assets they own.

AMAZON.COM IS THE world’s fourth most valuable company, based on its stock market capitalization. At that size, it isn’t about to get bought by another company. It doesn’t pay a dividend. The last time it repurchased its own shares was seven years ago.
Now, imagine this continued—no buyout, no dividend, no stock buybacks—until the sad day arrives when Amazon goes the way of buggy whip manufacturers. Result: There’s a good chance its shareholders would,

THERE’S A MADNESS to crowds—but also great wisdom.
Each of us knows very little about the world. But between us, we know an extraordinary amount. Every time we buy or sell a stock, we each draw on the knowledge and insights we have, and we effectively vote on whether we think the stock’s price should be higher or lower. Because today’s market prices reflect our collective wisdom, it’s hard to find shares that are badly mispriced.

WE WON’T KNOW UNTIL we get there.
How much do we need for retirement and what will it take to amass that coveted sum? It sometimes seems like the entire financial advice business—brokerage firms, fund companies, financial planners, online calculators and more—is solely focused on this conundrum.
That’s mostly a good thing. It is indeed crucial to amass enough for a comfortable retirement. Still, let’s acknowledge an inconvenient truth: The resulting retirement projections imply a degree of precision that’ll likely look hopelessly naïve once the real world intervenes.

WE HEAR ABOUT highflying stocks and hotshot money managers, and it’s easy to imagine the streets of lower Manhattan are paved with gold. But the truth is a tad more mundane.
Want some reasonable assurance of investment success? We should shun the excitement of trying to pick winners and instead focus on more prosaic portfolio tweaks. The overriding goal: ensure the compounding of our investment dollars encounters as little friction as possible.
Minimizing this friction will,

WHAT’S THE BIGGEST financial risk we face? Today, many folks would point to the possibility of a recession, a stock market plunge and perhaps both. Indeed, those are perennial perils—but perhaps they shouldn’t be our biggest worries. Looking to lose sleep? Here are 50 other dangers we face:

Really, really long-term care.
Your financial advisor turns out to be a crook.
Your spouse leaves.
Double-digit inflation.
Your new neighbor specializes in personal-injury lawsuits.
Your son just got his driver’s license.

HERE’S A SOBERING thought: Much—and perhaps most—of the money you’ll accumulate for retirement will reflect the raw dollars you sock away and not the investment returns you earn.
Consider a simple example. Let’s say retirement is 40 years away and your goal is to quit with $1 million. Let’s also assume you can earn an after-inflation “real” annual return of 4%, which is my best guess for the long-run return on a globally diversified,

PAST PERFORMANCE is no guarantee of future results. But we keep hoping.
Over the 10 years through August 2009, the large-cap stocks in the S&P 500 shed an average 0.8% a year, even with dividends included. Meanwhile, U.S. value stocks beat U.S growth stocks, smaller-cap U.S. shares notched 5.5% a year, developed foreign stock markets 2.7% and emerging markets 10.4%.
Fast forward one decade, and the leaders have become laggards and vice versa. Over the 10 years through August 2019,

I OFTEN FEEL LIKE the Grinch, who “puzzled and puzzled ‘till his puzzler was sore.” One question I’ve puzzled over endlessly: If what I do barely matters in the greater scheme of things, why in the world do I keep doing it?
Here are four related thoughts that often crop up in my writing:

One of life’s great pleasures is working hard at something we care deeply about.
While striving toward our goals can bring great satisfaction,

I’VE TAKEN TO TELLING folks that HumbleDollar is the site for folks who are striving to be rational about money—but who are acutely aware that they’re human.
Figuring out what’s rational is relatively easy. We should save diligently, diversify broadly, invest in stocks if we have a long time horizon, favor index funds, take on debt cautiously, only insure against major financial risks, avoid buying a house that’s larger than we really need and,

IT’S THE LABOR DAY weekend, which is hardly the time for a nerdy article on the finer points of personal finance. Instead, I’ll leave you to spend the weekend pondering 11 great unanswered financial questions:

Who does more financial damage, stockbrokers or life insurance agents?
Is taking Social Security early and then assuming you’ll make double-digit gains by investing the money a brilliant strategy—or utterly delusional?
Is a home the best investment you’ll ever make or a money-sucking pile of bricks?

ONE OF MY GOALS is not to think about money. This might sound odd coming from someone who has written about money for 34 years, runs a financial website and, indeed, wrote a book entitled How to Think About Money. So let me clarify: I’m happy to think about money in general. I’m even happy to think about your money. I just don’t want to think about my own.
I used to think about my finances all the time.

DECIDING WHETHER to buy bonds or pay down the mortgage used to be a tricky decision. Not anymore: Paying extra on your home loan will almost always be the right choice.
This takes some explaining—because it involves wrapping your head around the standard vs. itemized deduction, investment taxes, and a mortgage’s shifting mix of principal and interest.
First, let’s dispense with the obvious objection: Yes, if you’re inclined to buy stocks rather than pay down the mortgage,

THINK OF IT AS THE ultimate financial Rorschach inkblot test. When you hear about the pitifully inadequate retirement savings of so many Americans, what’s your immediate reaction?
a) This is the inevitable result of stagnant wages coupled with soaring medical, education and other costs; or
b) This is what happens in a financially illiterate society with scant self-discipline and constant temptations to spend.
For me, these differing views were brought into sharp relief by two recent articles on HumbleDollar.

IT WOULD BE difficult to overemphasize how important Vanguard Group is to everyday investors. Many of us have money at the Malvern, Pa., behemoth, which easily ranks as the largest mutual-fund company. But even if investors don’t, they’ve likely still benefited, as other companies have moved to slash their fees and expand their lineup of index funds to compete with Vanguard.
Well aware of this, I follow Vanguard closely—and even more so since Vanguard’s founder,

IDEAS ARE TOOLS THAT can help us see the world with greater clarity. Indeed, I find myself returning to certain financial notions again and again, because they’re so fundamental to understanding the world of finance and how we can make our lives better.
What are the most important ideas? I decided to create a new chapter for HumbleDollar’s online money guide, which covers the 15 notions I consider most crucial:

Humility
Simplicity
Control
Instincts
Future Self
Hedonic Treadmill
Signaling
Human Capital
Be an Owner
Risk and Reward
Opportunity Cost
Compounding
Skewness
Risk Pooling
Enough

Arguably,

STOCKS MARCH EVER higher, portfolios get ever fatter and yet the conundrum facing investors remains the same. We have no idea what will happen next to share prices—and no reliable way of figuring it out. Consider:

Valuations are rich, but they have been for much of the past three decades. Indeed, if above-average valuations were your signal to sell, you likely would have dumped stocks long ago and missed out on substantial gains. The reality: Valuations don’t predict short-term returns,

CALL IT THE NEW conventional wisdom: Forget trying to spend less—and instead focus on earning more.
This change in thinking is no great surprise. We have endless opportunities to make an extra buck, thanks to all the “side hustles” available in our “gig economy.” Meanwhile, many folks bristle at the admonitions to spend less on lattes, happy hours and avocado toast. Let’s face it, will eliminating such expenses really put us on the fast track to financial freedom?

I’M PONDERING WHETHER to make my biggest transaction in four years—and it might be the trickiest financial decision I’ve ever made. My quandary: Should I take advantage of today’s low tax rates to convert a big chunk of my traditional IRA to a Roth?
This financial navel-gazing was sparked by an article by John Yeigh, one of HumbleDollar’s contributors. As John pointed out, you can now have a much higher annual income and still avoid the top federal tax brackets,

WE CONSTANTLY STRIVE for more: A bigger paycheck. A loftier job title. A larger home. A more luxurious car. New electronic toys. Higher investment returns.
Make no mistake: There can be great pleasure in this striving—but we may not be so happy with the results. Indeed, on this holiday that celebrates America’s independence, let me put in a plug for a most un-American concept: How about settling for enough—and perhaps even opting for less?

IF I’M EVER FEELING lonely, all I need to do is write about certain financial topics—and soon enough my inbox is brimming with emails, some vehemently disagreeing, others offering vigorous nods of assent.
A dozen of those topics are covered in HumbleDollar’s new chapter devoted to great debates—issues like whether money buys happiness, when to claim Social Security and whether individual bonds are superior to bond mutual funds. But those subjects aren’t the only ones that stir up readers.

AS I GROW OLDER, I find I become ever more deliberate in how I spend my time and money. How can I get maximum happiness from the dollars I have? How can I get the most from the years that remain? As I wrestle with these questions, six notions have come into much sharper focus:
1. Fewer hassles mean greater happiness. When I was in my 20s, I owned a series of clunkers that turned every trip into a nail-biter.

I’M A FAN OF EMERGING stock markets—for two key reasons. But I also have qualms—for two key reasons.
Readers frequently write to me about emerging markets, and those messages usually coincide with periods of stomach-churning volatility, which is what we’ve witnessed recently: MSCI’s emerging markets index tumbled 15% in 2018 and was up just 4% in 2019’s first five months—after being up as much as 14% earlier this year. But as I tell my nervous correspondents,

WHEN FINANCIAL writers tackle the topic of spending, the result is all too predictable: lectures on the dangers of lattes, the glories of budgeting and the financial apocalypse engendered by avocado toast, as well as suggestions that earlier generations were far more prudent.
I’ll admit it, I haven’t entirely avoided these pitfalls.
So how should we think about spending? I would focus on how your income gets divvied up among four key categories:
1.

IN THE FINANCIAL world, making money is the most popular pastime—but having a good argument is a close second.
What do folks argue about? HumbleDollar’s online money guide has always included a handful of sections labeled “great debates.” I decided to expand that collection to 12—and gather them together in their own chapter. Below you’ll find one of the new sections, plus links to the other 11.
Debate No. 8: Is Indexing Dangerous?

THE GREAT RECESSION highlighted the frightening amount of debt—especially mortgage debt—that had been taken on by many American families.
A decade later, the picture is far brighter, with one exception: student loans. Since 2008’s third quarter, education debt has ballooned 144%, according to data just released by the Federal Reserve Bank of New York. But the total of all other debt—mortgages, car loans and credit card balances—is up less than 1% over the same period.

WELCOME TO HumbleDollar’s new financial life planner, which is designed to complement the portfolio builder we unveiled earlier this year.
The life planner’s goal: Guide you through 13 financial steps that’ll help you navigate the journey from your 20s to your 60s and beyond. Below, you’ll find the first of the life planner’s 13 steps—plus links to the other 12.
Step No. 1: Prep for Success. All too many Americans lead shaky financial lives.

HOW WE CHOOSE TO spend our time and money is a declaration of what we deem important. A modest example: We might enjoy watching a wide array of cable channels, while caring little about the clothes we wear, and that’s reflected in our costly cable bill and minimal spending on clothing. And there’s nothing wrong with a choice like that—if it is indeed what we want.
But is it? Often, the things we consider important—and hence how we lead our lives and how we spend our money—aren’t the product of our own careful contemplation.

WHEN I LAUNCHED this site at year-end 2016, my main goal was to take my money guide—which I’d previously published as an annually updated book—and make it freely available. I also planned to keep blogging once a week and run occasional articles by other folks. Beyond that, my plans were vague: I viewed HumbleDollar as a part-time venture—one of many I was then involved with.
Since then, the site has exploded. Traffic has tripled over the past two years,

IF YOU ASK AN insurance agent how much coverage you should have, the answer invariably is “more.” What if you show too much interest? Next thing you know, you could find yourself the unhappy owner of a high-cost variable annuity.
Consumers, meanwhile, take what might be politely described as a barbell approach. Sometimes, they’re acutely aware of a particular risk and buy more coverage than they need—a frequent occurrence with auto and health insurance.

“FINANCIAL WRITERS always seem to assume everybody’s married.” That’s a complaint I’ve heard more than once—and it came to mind as I reviewed our 2018 tax return.
That tax return reflected the impact of 2017’s tax law, which—among other things—roughly doubled the size of the standard deduction, while capping the itemized deduction for state, local and property taxes at $10,000. One result: Many couples now get little or no tax benefit from either the mortgage interest they pay or the charitable contributions they make.

YOU COULD ARGUE that U.S. stocks are reasonably priced, with the S&P 500 companies trading at 22 times their reported earnings for the past 12 months. That’s not much above the 50-year average of 19.3—and hardly outrageous, given today’s modest bond yields.
But you could also argue that U.S. shares are horribly overpriced. The S&P 500 stocks today offer a dividend yield of just 1.9%, versus a 50-year average of 2.9%. Shares also seem pricey compared to both the value of corporate assets and average company profits for the past 10 years.

WE GET MORE PAIN from losses than pleasure from gains—which might explain why I often think back on the five major market crashes that have occurred during my investing lifetime. There’s something about the massive hemorrhaging of money that has a way of focusing the mind and sticking in the memory.
Here are those five crashes, and what I learned from each:
Black Monday. I was age 24—with no money invested in stocks—when the S&P 500 plunged 20.5% on Oct.

WE MAKE COUNTLESS decisions—financial and otherwise—with little or no thought to the dollars at stake:

We purchase items that we know are overpriced and almost guaranteed to lose value, but we do so happily, because they have a meaning for us that’s far greater than their price tag. Think of artwork and vacation souvenirs that are purchased because they remind us of moments we treasure.
We prize family possessions for their sentimental value, even though they typically have scant financial worth.

WHAT DOES A GOOD financial life look like? Here’s a quixotic roadmap—comprised of 45 steps:

Stuff part of your babysitting or lawn mowing money in a Roth IRA. Suggest to your parents that they should encourage this sort of behavior—by subsidizing your contributions.
Get a credit card when you head off to college, charge $5 every month and always pay off the balance in full and on time. You’ll soon have an impressive credit score.

AS I’VE BUILT OUT HumbleDollar over the past few years, I’ve come to view the site not merely as a place where folks can learn about financial issues, but as a community that thinks about money in a unique way.
This shows up repeatedly in articles from guest contributors, with their focus on topics like spending thoughtfully, helping family, behavioral finance, indexing and achieving financial freedom. It’s a community where folks are trying to be rational about money,

NEW YORK TIMES columnist Ron Lieber wrote last week about “money guru” Jordan Goodman—and how Goodman had settled charges brought by the Securities and Exchange Commission that he’d used his radio show to promote an investment firm, without revealing that the firm was compensating him for referrals. Goodman might never have ended up in the SEC’s crosshairs, except it turned out the firm was operating a $1.2 billion Ponzi scheme.
It was a story that made me sit up and take notice—because I’ve long thought of Goodman as a fellow member of the informal fraternity of personal finance writers.

LOOKING TO BUILD an investment portfolio—or rethink the mix you already own? Check out HumbleDollar’s new portfolio-building guide.
The guide takes the most important advice from the site’s chapters on investing, markets and taxes, and turns it into nine simple steps that should help you build a sensible, low-cost portfolio of index funds. I’ve included step No. 1 below. If you like what you read, I encourage you to peruse the other eight steps.

MONEY MAY SEEM important—and it is. But it isn’t nearly as important as we imagine. Want a little perspective on your money? First, think about your net worth or how much you earn. Then ask yourself these eight questions. How much would you give:

To have your current life, but be 10 years younger?
To have a deceased friend or family member back in your life?
To avoid the parts of your job you dislike?

WE CAN MEASURE OUR financial progress by the size of our net worth. But that’s hardly the only gauge. Equally important, I’d argue, is the evolution in how we think about money—and how we use it to improve our lives.
What does this journey look like? I picture it as having five stages:
1. Head above water. This is when you emerge from the primordial financial swamp and begin to walk upright.

WE NEED FOLKS TO STAY in the workforce longer—for their sake and the sake of the economy. And I don’t think it’s a bad thing.
I’ve written in the past about the demographic challenges facing the U.S. and other developed nations. The 10-second recap: Many of the economic issues we fret about—soaring federal government debt, lower long-run GDP growth, a shrinking Social Security Trust Fund—can all be traced to the same root cause. We’re rapidly approaching the point where we don’t have enough workers producing the goods and services that society needs.

FOLKS USED TO SAY, “You can’t go wrong with real estate.” They sure don’t say that anymore. It’s been a rollercoaster dozen years for home prices—and some experts think another rough patch is in the offing.
Since mid-2006, the S&P CoreLogic Case-Shiller U.S. National Home Price Index first tumbled 27.4% and then bounced back 53.6%, for a cumulative 12-plus year gain of 11.5%, equal to 0.9% a year. Could we be facing another dip?

DO THE CHEAPEST index funds always win? A year ago, I tackled that question—and the results for 2017 were mixed. Since then, the question has become even more intriguing. Last year, Fidelity Investments launched four index-mutual funds with zero annual expenses, while also slashing the expenses on its existing index funds.
Those zero-cost funds have only been around for a handful of months, so it’s a little early to gauge their performance. Ditto for the price cuts for other Fidelity index funds;

WHEN FOLKS HAVE financial questions, they go hunting for the right answer. But what if there’s no right answer to be found?
To be sure, in retrospect, the correct answer is often crystal clear. Looking back at 2018, we should have owned growth stocks until September and then gone to 100% cash. If our home didn’t burn down and our health was good, we shouldn’t have bothered with homeowner’s and health insurance. If we kept our job and survived the year,

WITHOUT A DOUBT, John C. Bogle is the greatest man I’ve had the privilege of knowing. Tomorrow, the newspapers will run obituaries detailing his many accomplishments—how he launched Vanguard Group, started the first index mutual and was, right up until the end, a fierce advocate for the everyday investor.
I first met Jack in 1987, when I was a callow 24-year-old reporter at Forbes magazine. I last saw him in October, at the Bogleheads’

LONG-TERM CARE is the elephant in the room that many of us try mightily to ignore. It’s a potentially huge expense: A semi-private room in a nursing home costs an average $89,297 a year, according to Genworth Financial.
But what should we do about it? For answers, I turned to Christine Benz, director of personal finance at Chicago financial researchers Morningstar Inc., where she’s worked for more than 25 years. Benz has written extensively on long-term care (LTC).

WHEN I STARTED writing my column for The Wall Street Journal in 1994, active money managers dominated the investment scene and index funds were struggling to get noticed. A quarter century later, most money remains actively managed, rather than indexed. The triumph of indexing is not yet complete.
Still, everybody knows which way the wind is blowing. Over the decade through 2017, index funds focused on U.S. stocks—both the mutual-fund and the exchange-traded varieties—attracted $1.6 trillion in new money,

LIKE THE COBBLER whose children have no shoes, I get so busy with this website and other projects that I tend to neglect my own portfolio. I think of it as benign neglect: If you’re invested in a globally diversified portfolio of low-cost index funds, there isn’t much reason to look or much need to trade.
But for the past week or so, I’ve been doing plenty of looking—and a little trading.
By the market close on Dec.

IT MIGHT SEEM RISKY to write about the gifts my kids will receive later today. Won’t that ruin the surprise? Probably not. My children and stepchildren aren’t, I suspect, regular HumbleDollar readers.
My wife and I tag-teamed on gifts this year. Her job was to find one or two items for each kid that we could wrap and throw under the tree. This works well, because she likes shopping—and I loathe it.

WHAT DO YOU CONSIDER the most important financial ideas? No doubt we’d all come up with a different list—sometimes radically different—and what we deem important likely says a lot about how we handle our money.
For my own list, I think less about practical financial concepts—things like indexing and asset location—and more about the big ideas that should guide our financial decision-making. Here are seven of those ideas, all of which heavily influence how I manage my own money:
1.

A YEAR AGO, I WAS worried about the stock market. Today, I’m concerned about the job market.
In December 2017, I penned an article entitled Best Investment 2018, which turned out to be surprisingly prescient. That wasn’t really my goal. At the time, I was simply pondering rich stock market valuations, tiny bond yields and the new tax law, with its higher standard deduction and limits on itemized deductions. Putting it all together, it struck me that paying down debt—even mortgage debt—seemed like an awfully smart move.

DO CHILDREN BRING happiness? As someone who has invested heavily in small people over the years—I have two children and two stepchildren—I want to believe the answer is “yes.” But the evidence suggests otherwise.
This, I realize, is a touchy subject, so let me offer a few crucial caveats before you fire off that fiery email. The studies cited here offer conclusions based on broad averages. Your experience could be entirely different. Moreover, it may be that children give special meaning to our lives,

IF THE STOCK MARKET decline resumes, we’ll soon be reading articles about remorseful everyday investors bemoaning their earlier foolishness.
No doubt some folks have been foolish. Perhaps they’ve belatedly discovered that Amazon and Apple aren’t one-way tickets to wealth, that they aren’t the investment geniuses they imagined, or that they misjudged their courageousness and shouldn’t be 100% in stocks.
But mostly, I view these articles as patronizing garbage that propagate the myth that all amateur investors are clueless and all professionals are super-savvy.

HOW THINGS LOOK depend on where you stand. Trying to figure out how to respond to the market drop? After the initial slump, a brief rally and then another decline, the S&P 500 is down 10% from its September all-time closing high of 2930.75.
History suggests that, five years from now, share prices will be no lower than they are today, and 10 years from now they’ll be handsomely higher. But at times like this,

TODAY WAS PAINFUL. How painful? Think of the financial losses:

Homeowners who closed on their house sale might have lost as much as 6% of the proceeds to real-estate commissions.
Car buyers who picked up their new vehicle probably gave up more than 10% of the purchase price just by driving off the dealership lot.
Those who signed separation agreements with their soon-to-be-ex spouse likely surrendered 50%.
Investors who bought load funds might have been nicked for 5.75%.

ALLAN ROTH LIKES to describe himself as argumentative—and, on that score, it’s hard to argue with him. But it’s also hard to argue with the points he makes, because he has this nasty habit of being right.
Roth is the author of How a Second Grader Beats Wall Street, a financial planner who charges by the hour, and a contributor of financial articles to AARP.org, Financial-Planning.com, NextAvenue.org and other sites. I caught up with him last month at the Bogleheads’ conference in Philadelphia.

WHAT COULD POSSIBLY be wrong with saving like crazy, so you can retire early? That’s the notion behind the financial independence/retire early, or FIRE, movement. Yet lately, I’ve read a lot of carping about FIRE, both in articles and in the emails I receive.
Just last week, those complaints got yet another airing in The Wall Street Journal. Earlier, Suze Orman weighed in, arguing you need at least $5 million to retire early.

“I DON’T KNOW.” Those may be the three toughest words for an investor to utter—and yet perhaps also the most important.
Despite the robust rebound of recent days, the S&P 500 is still down 6.5% from its September all-time high. Indeed, U.S. stocks just suffered their worst monthly loss since 2011. What should we make of the craziness? Here are five crucial unanswered questions:
1. Where are stocks headed?
As the saying goes,

RECENT MARKET turbulence, including today’s sharp stock market drop, has been a wakeup call for many investors. Feeling queasy? It isn’t too late to make portfolio changes: The S&P 500 may be down 9% from its all-time high, but it’s still up an eye-popping 293% since March 2009.
Here are three quick calculations that might spur you to action—or help ease your mind:
1. How much cash do you need from your portfolio over the next five years?

IF THIS IS THE START of a bear market, share prices have a lot further to fall: The S&P 500 is down just 9.4% from its all-time high—and yet one of the most important lessons may have already been learned.
No, I’m not going to mock those who have lately proclaimed that stocks are the only investment worth owning. I don’t intend to belittle those who assume that U.S. shares can defy investment theory,

I HAVE SPENT 33 years writing and thinking about money. I’m not sure it’s the most uplifting way to spend one’s life, but it’s kept me busy and—for the most part—out of trouble.
Two years ago, I took some of the financial ideas that have especially intrigued me over the past three decades, and I brought them together in a slim volume called How to Think About Money. The book proved surprisingly popular,

THIS WEBSITE IS devoted to personal finance—and I try to keep it that way, avoiding partisan political pontificating. Still, as we’ve learned from the 2016 presidential election and its aftermath, the U.S. is a country divided between those prospering in today’s economy and those who feel shortchanged.
In reality, of course, it’s more of a spectrum than a sharp divide: Most folks neither live below the poverty level nor count themselves among the one-percenters.

IS THIS A MOMENT of cultural change? I see glimpses of a new way of thinking. The New York Times recently ran articles on both the cult of thrift and the financial independence/retire early—or FIRE—movement. Words like mindfulness, purpose and meaning have gained new currency. U.S. household debt is growing, but it’s still barely higher than a decade ago. The national savings rate even shows signs of improving.
Maybe this is yet another reverberation from the Great Recession.

ON WEDNESDAY, Vanguard Group’s 89-year-old founder John C. Bogle was in hospital to receive treatment for his latest health scare—an irregular rhythm in his transplanted heart. On Thursday and again today, he was at the Bogleheads’ 17th conference in Philadelphia, as feisty as ever.
The Bogleheads are, of course, the online community who congregate at Bogleheads.org. They’re renowned as fans of frugality—especially frugally priced index funds. And Jack Bogle—even though it’s been more than two decades since he was Vanguard’s Chief Executive Officer—remains their guiding light.

WHO SHOULD DIET? This isn’t exactly a tough one: It’s people who need to lose weight.
Who should budget? If you listen to conventional wisdom, this is another easy one: It seems we all should. Creating a written budget, and then tracking our spending against it, is considered a sign of high financial rectitude.
I think this is nonsense. I have never created a written budget and I don’t track my spending—because I don’t need to.

THE SAVINGS RATE has been revised by the federal government—and the new numbers offer a rosier take on America’s financial rectitude. But is the story believable?
Make no mistake: The old figures told a sorry tale. They suggested our savings habits fell apart after 1984 and with a vengeance after 1997. But suddenly, post-1984 doesn’t look so grim. Under the new methodology, the annual savings rate averaged 11.3% over the 35 years through 1984,

YOU’RE UNLIKELY TO get the right answers—unless you ask the right questions.
That’s especially true when it comes to managing money. We have answers thrust in our faces all the time, as marketers and salespeople exhort us to buy this mutual fund, that car, this stock, that home and this insurance policy.
But are these really what we want or need? It’s hard to know unless we ask the right questions. There’s ample evidence that many folks end up with financial products they don’t need and spend money in ways that bring little or no happiness.

A FINANCIAL PLANNER called Archie Nickel is stealing entire articles from HumbleDollar and posting them to his own site—without permission. In the online world, it’s fine to link to interesting articles elsewhere on the web. But it’s a no-no to swipe entire articles. I’ve endeavored to contact the nefarious Nickel, by posting comments on his site and via Twitter, but he’s ignored my requests to stop purloining this site’s blogs and and to remove the blogs he’s previously stolen.

WE CAN GATHER financial facts and research issues. But what we learn will always be tainted by what we’ve experienced.
As I mentioned last week, anecdotal evidence often proves more powerful than statistics. I’m talking here about the same phenomenon—but writ larger. What we read in articles and books is scant competition for the informational scraps we collect throughout our lives: the comments our parents made, the milieu we grew up in, the stories we hear from colleagues,

YOU MENTION TO a colleague that longtime smokers shorten their life expectancy by an average of 10 years. Your colleague responds by talking about his grandmother who smoked a pack every day until she died at age 98. We all know that the statistic should trump the anecdote. But on the conversational scoreboard, it’s one point for both sides—and, three weeks later, you can’t help but recall the grandmother’s story.
The same thing happens with personal finance all the time.

WHEN I WAS a columnist at The Wall Street Journal, I repeatedly heard two complaints from editors, especially those with little understanding of personal finance: “Our readers want something more sophisticated” and “Where’s the news hook?”
That, in a nutshell, explains why the media can be so bad for our financial health. When print and broadcast journalists cave in to the twin imperatives of timeliness and sophistication, they’re almost guaranteed to lead their audience astray—for three reasons:
1.

WE CAN’T CONTROL the financial markets. But we can pretty much guarantee we’ll pocket whatever the stock and bond markets deliver—by buying index funds. So why do I hear so much grousing from indexers?
At issue isn’t a failure of index funds, but rather a failure of investors’ expectations. Over the past few months, I’ve heard from countless hardcore indexers who have done the sensible thing and built globally diversified portfolios. Often, they own some variation of the classic three-fund portfolio: a total U.S.

WE HAVE FINALLY HIT rock-bottom. Last week, Fidelity Investments announced that it was introducing two index funds with zero annual expenses, while also slashing expenses on its other index funds and dropping the required minimum investment on all funds, both actively managed and indexed. All of this raises five key questions.
1. Why is Fidelity doing this? I view Fidelity’s move as both bold and borne of desperation. When I started writing about mutual funds in the late 1980s,

I’M STILL WAITING. Along with many others, I have spent much of my investing career expecting five key financial trends to play themselves out—and yet they’ve stubbornly refused to do so.
Sure, these predictions could still come true. But I have my doubts. Maybe these five financial forecasts aren’t the slam dunk they appear:
1. Stocks will revert to average historical valuations. Whether you look at price-earnings ratios, cyclically adjusted price-earnings ratios,

FORGET XBOX AND PlayStation. If you’re an investment nerd, nothing beats playing with a financial calculator, especially running scenarios that combine dollars, investment returns and great gobs of time. Here are six mathematical musings—not all of them happy:

Got a newborn daughter or granddaughter? If you invest $1,000 on her behalf and the money notches 6% a year, she’ll have almost $106,000 at age 80. That 6% is my assumption for long-run annual stock returns.

OUR PERSPECTIVE ON money slowly shifts as we age. How so? Below are 11 changes I see in myself and my contemporaries, those also in their 50s and 60s. Admittedly, some of these changes are more aspirational than actual. We don’t behave quite as wisely as we imagine—but we are, at least, trying to be wise.

We’re less confident we can beat the market, but more confident we know what we’re doing.
We are freer with our money—but more calculating with our time.

IS IT TIME TO STOP messing around with our portfolios—and go for radical simplicity? I’ve been asking myself that question in recent months, as I eye the growing list of funds that offer broadly diversified “one-stop shopping” portfolios built solely with low-cost index funds.
Take Vanguard Target Retirement 2050 Fund, which invests its assets in four Vanguard index funds and is geared toward those retiring in 2050 or thereabouts. The 2050 fund has a $1,000 investment minimum and charges just 0.15% a year,

YOU MAY BE SAVING and investing for retirement. But what you’re really doing is buying future income. How much income? That brings us to a little number crunching, which I hope will illuminate five key financial ideas.
Let’s start with the numbers. Imagine stocks notch 6% a year, but inflation steals two percentage points of that gain, so you collect an after-inflation annual return of 4%. If you socked away $1,000, what would it be worth in retirement?

YOU WILL RETIRE ONE day—and, if you want to spend your final decades in even moderate comfort, it won’t be cheap. Not too concerned about saving for retirement right now? Here are five uncomfortable realities:
1. You’ll almost certainly live to retirement age. Sure, you could go under a bus before then. But that isn’t something you should bank on: If you’re age 20 today, there’s an 85% chance you will live to 65,

SOCRATIC DIALOGUE, anyone? Today, we’re tackling three questions. Almost all HumbleDollar readers will, I suspect, readily answer ”yes” to the first two questions—and balk at the third.
1. Are markets efficient? We can debate just how efficient the market is. But most readers, I suspect, will agree that the financial markets are sufficiently efficient that there’s no easy way to score market-beating gains—especially once we factor in the investment costs involved.
It’s the brutal logic of investing: Before costs,

RISK IS ARGUABLY the most important financial topic. But which risks should we worry about? There are all kinds of contenders: recession, accelerating inflation, political upheaval, global conflicts, sharp market declines, individual company turmoil.
But I would argue that, as we each assess our personal finances, one risk trumps all of these—and that’s the risk that we have lousy career earnings and maybe even find ourselves without a paycheck. How come? It isn’t simply that we would likely struggle to pay the bills and service our debts.

DEPENDING ON WHO you talk to, we have a major problem in the U.S. with productivity growth, economic growth, the trade deficit, the budget deficit, public sector pensions, Social Security, Medicare, Medicaid—or, if folks are feeling especially gloomy, perhaps all of the above. But the reality is, these issues are, at least in part, merely symptoms of a far larger problem.
What’s that? We’re rapidly approaching the point where we don’t have enough workers producing the goods and services that society needs.

ANNUITIES ARE OFTEN dismissed as costly, complicated contraptions that are more lucrative for Wall Street than investors. And I’m half-inclined to stick with that blanket condemnation, rather than muddy the waters by offering a more nuanced view. I hate the idea that somebody might read this article and then buy the wrong type of annuity—and end up making a horribly expensive mistake.
Still, I believe there are four types of annuity that can make sense for investors. 

WHEN I WAS A CHILD, I remember my parents putting great store by antique furniture, silver cutlery, bone china, cut glass and fine rugs. My maternal grandparents had rare books and old prints. My paternal grandfather had built an extensive stamp collection.
When Clem—as we all called him—died in 1988, he left me his stamp collection. I rarely look at it these days, but I’ve been dutifully carting it around for 30 years, through six changes of residence.

IT RARELY HAPPENS these days, because I’ve been kicking around so long, but occasionally I’m taken aback by some completely nutty financial idea. This happened a few weeks ago, when I heard folks opine that you should always lease cars, not buy them—because cars are depreciating assets.
Say what?
To be fair, there’s a related idea, which is indeed sound: You want more of your wealth in assets that appreciate in value and less in those that depreciate.

WE HAVE CRAZY STOCK market valuations in the U.S.—and yet investors don’t seem especially crazed, at least compared to the two great buying manias of recent decades.
Six months before the housing market peaked in mid-2006, I remember attending a New Year’s Day party where real-estate investing was—no exaggeration—the sole topic of conversation. I recall colleagues walking into open houses and, after quickly looking around, bidding above the asking price. I remember emails belittling my intelligence for cautioning readers about the likely return from real estate.

HUMBLEDOLLAR ISN’T the financial website for everybody. Instead, it’s the place that folks end up after they have made their fair share of youthful financial mistakes—and they’re ready to settle down and get serious about money. I even briefly toyed with adding a tagline to the site: “Where Money Grows Up.”
What does grown-up money look like? It’s less about the size of your nest egg—and more about attitude. Here are 21 signs you’re a HumbleDollar reader:

When your neighbors show off their remodeled kitchen,

IF WE’RE TO RETIRE in comfort, we need to be deadly serious about saving money for perhaps three decades. That leaves a little wiggle room: If our careers span four decades, we might have a decade or more when we can be a little less focused on making and saving money.
The question is, when should this “goof off” period be? Conventional wisdom has its answer: We should pursue our passions in our 20s,

PUT YOURSELF IN THEIR shoes. I’ve been doing that in recent weeks, thinking about how I’d design a portfolio if I lived in, say, Australia, Japan or the United Kingdom. What prompted this navel-gazing? I’m in the middle of revising my 2016 book, How to Think About Money, for an international audience.
One conclusion: Here in the U.S., we have it far easier than foreign investors—and a big reason is currency exposure.

WE DON’T PROMISE thinner thighs and harder abs here at HumbleDollar. But—unbeknownst to us—we could be the secret to your relationship success.
This revelation comes from an academic paper, “A Penny Saved Is a Partner Earned: The Romantic Appeal of Savers,” by Prof. Jenny G. Olson and Prof. Scott I. Rick, which is based on Olson’s dissertation research.
Conventional wisdom—and earlier academic work—suggest that, if men flaunt their wealth, they’re likely to have greater dating success.

MOST AMERICANS aren’t saving nearly enough. Last year, we collectively salted away just 3.4% of our after-tax disposable personal income. That’s a far cry from the 9% or more that Americans socked away every year between 1950 and 1984. Since those heady days, our ability to delay gratification has all but disappeared, with the savings rate averaging just 4.8% since 1998.
But HumbleDollar isn’t read by the typical American. This is the place folks end up after they’ve tried dating stocks,

FINANCIAL FREEDOM is the ability to spend our days doing what we love—and, with any luck, it will come with age. As we amass more wealth, we should become less motivated by fears of layoffs and hopes of bigger paychecks. Instead, our motivation should come from within, because we are increasingly free to focus on the things we’re passionate about.
This, I believe, is one of the three pillars of a happy financial life: We have fewer money worries,

THERE ARE MANY financial debates that shouldn’t be debates at all. Folks strike strident poses, but often their positions don’t reflect a careful weighing of the arguments. Rather, they either have a vested interest or their ego is invested. Think of commission-hungry insurance agents who pound the table for cash-value life insurance, or retirees who took Social Security early and then insist that early is always best.
In most of these cases, if we marshal the facts and apply some reasoning,

SUCCESSFUL INVESTING is simple, but it’s rarely easy. Yet millions of investors, both professional and amateur, assume they know what they’re doing. “We live in this mystical state where everybody thinks they can practice finance,” notes William Bernstein, retired neurologist and author of a fistful of acclaimed finance books. “But you shouldn’t practice without understanding the science of finance.”
What science? Bernstein, whom I’ve known for more than two decades, says it has four elements: investment theory,

LIFE MAY HAVE BEEN nasty, brutish and short at one time, but it sure isn’t today. Thinking ahead to retirement? Forget the famous quote by 17th century English philosopher Thomas Hobbes—and ponder the famous wager suggested by 17th century French philosopher Blaise Pascal.
As Pascal saw it, it’s rational to believe in God. If you believe and it turns out God doesn’t exist, the price is modest: an hour lost from every Sunday morning and a little less immorality.

IN MY NERDY PERSONAL finance world, there are perhaps two dozen folks I pay close attention to—and one of them is Mike Piper, the blogger behind ObliviousInvestor.com. He’s also written nine books in his “made simple” series, which offer great primers on financial subjects like taxes, Social Security and retirement, all in 100 pages or less.
An accountant by training, Piper brings his analytical mind and detailed knowledge of government rules to the topics he tackles.

WHEN WE MAKE financial decisions, we usually have a pretty good idea what we’re getting. But what are we giving up? That, I believe, is the crucial, unasked question.
Think about any financial choice, whether it’s the shoes we buy, the stock we purchase or the kids’ college degree we promise to pay for. All too often, these are snap decisions. Captivated by the bright shiny object in front of our eyes, we make an isolated choice—and fail to grapple with the bigger picture.

WANT TO CHECK your retirement readiness? There’s a slew of online calculators available, but one of the best is NewRetirement.com. The site strives to deliver great content and foster an active community, and it does a decent job on those two fronts. But the site’s heart and soul is its super-sophisticated, comprehensive retirement calculator.
Truth be told, my preference usually runs to calculators that don’t require registration and don’t involve many inputs, so I was initially reluctant to create an account at NewRetirement.com.

STARTING TO SAVE is a discouraging business. Even if you invest in stocks—and even if stocks post gains—progress initially can seem agonizingly slow.
Consider a simple example. Let’s say you earn $100,000 a year. Not exactly an everyday salary, I admit, but it makes the numbers easier to grasp. You save 12% of your income, equal to $12,000 each year. That money is invested at the start of the year and earns 6% annually,

IN NOVEMBER 2006, I wrote an article for The Wall Street Journal about how to get started as an investor, even if you didn’t have much money to spare. The article was read by Charlie Cutelli, a high school teacher and coach in St. Louis, Missouri.
“At the end of the article, there was a nugget about T. Rowe Price waiving the $2,500 minimum ‘if you commit to socking away at least $50 a month through an automatic investment plan’,”

TRYING TO BEAT THE market isn’t just a risky endeavor that will almost certainly end in failure. It’s also unnecessary and, arguably, an astonishing waste of money and time.
As I grow older, the clock ticks ever more loudly in my head. I hate to be kept waiting. I keep chores to a minimum. I try to eliminate activities from my day that bring little pleasure and have no purpose. I think hard before acquiring new possessions,

IF THERE’S ONE financial website I visit more than any other, it’s The Wall Street Journal’s market data site. Before the stock market opens, I’ll look to see whether the S&P 500 futures indicate shares are headed higher or lower. During the trading day, I’ll check occasionally to see where things stand with stocks—and, if there’s been a big move, I’ll scour news sites to see what might be driving it.
But the Journal’s market data site doesn’t just offer a snapshot of the financial markets.

ARE YOU GETTING RICH off your neighbors—or are they mooching off you? You might imagine your financial success, or lack thereof, rests squarely on your own shoulders. But much also hinges on the behavior of your fellow citizens.
In numerous financial situations, one group in society effectively subsidizes another. Much of the time, you want to be the recipient of the subsidy—but not always. Consider seven examples:

Spenders subsidize those who save prodigious amounts.

THE MARKET IS ALWAYS right. It may have a different opinion tomorrow—perhaps radically different—but that doesn’t mean current prices aren’t the right ones.
Holler all you want that the stock market ought to be far lower. I do a fair amount of that myself (though the shouting is more akin to grumpy mumbling). But whether we like today’s share prices or not, they reflect the collective wisdom of all investors—and, if we want to buy or sell,

IF THIS TURNS OUT to be a major bear market, there will be a slew of articles to be written. It’s the negative correlation enjoyed by every financial writer: Even as our portfolios shrink, our potential for pontification soars.
But what if the market bounces back? It’s almost too painful to contemplate. Think of all the articles that won’t get written. If the past week’s rally continues, here are 10 stories that will have to wait for the next market downturn:
1.

AFTER THE WILD RIDE of the past two weeks, stock investors are in search of reassurance. Will this movie have a happy ending?
If we’re venturing into the stock market, we should ideally have at least a 15-year time horizon. That gives us 10 years to make money and another five years to look for the exit. Those final five years may prove crucial if the first 10 years don’t turn out so well.

SO WE’RE ALL POORER, right? The S&P 500-stock index has fallen 10.2% over the past nine trading days. Yet all we’ve done is give back a sliver of the huge gains notched since 2009. My contention: Not only is much of the handwringing unjustified, but arguably it’s also wrongheaded.

Seasoned investors don’t get nervous when the market declines. Rather, they get excited by the prospect of buying shares at much cheaper prices. So far,

WHEN MARKETS GO crazy, financial writers feel compelled to dust off the keyboard and cook up profound insights. But I am writing this at 5 a.m., while still ingesting my first cup of coffee, so I’m setting the bar a little lower. Here are 12 modest observations following yesterday’s 4.1% plunge by the S&P 500:
1.  I don’t know. You don’t know. Nobody knows. The market turmoil of the past six trading days feels like a sea change after 2017’s remarkable calm.

I FEAR I’M GROWING wealthy at my children’s expense. My investing life began in the late 1980s. Yes, there have been stock market bumps since then, notably the 2000-02 and 2007-09 market crashes, and even a minor hiccup over the past week. But if you look at the broad trend, it’s been three decades of rising stock market valuations.
From year-end 1987 to year-end 2017, the S&P 500’s price-earnings multiple climbed from 13.8 to 24.6,

IN COLLEGE, I WAS the kid who swore he would never get married and never have children. A year later, I was engaged. Two years later, I was married. Three years later, I had a newborn.
And three decades later, I’m 55 years old, with a daughter who will turn 30 later this year.
I have no regrets about having children so young. Far from it. It does mean I missed out on the romancing,

I LOVE THE PRICE war among index-fund providers, because it puts pressure on all money managers to lower fees. But I don’t think investors should pay much heed to differences in annual expenses that amount to just 0.01% or 0.02% a year, equal to 1 or 2 cents for every $100 invested—and they certainly shouldn’t switch funds for those potential cost savings.
To check I wasn’t missing something, I set out to do apples-to-apples comparisons among index funds in four highly competitively segments of the indexing market: large-cap U.S.

WE CAN VIEW INVESTING as an argument between two competing opinions: What we think an investment ought to be worth—and what the market currently says. It’s an argument the market usually wins.
While we can be highly confident what, say, a certificate of deposit or a Treasury note is worth, it’s much harder to put a value on stocks, gold, high-yield junk bonds and other riskier investments (and, I’d argue, all but impossible with bitcoin).

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.

THE ABOVE HEADLINE overpromises, I readily admit. Still, three considerations—taxes, risk and the economic cycle—point to one conclusion: Paying down debt in 2018 looks like an awfully smart move.
Debtors’ prison. Ridding yourself of debt, even mortgage debt, has long been a savvy alternative to buying bonds and certificates of deposit. But thanks to the new tax law, it looks especially savvy right now—and especially if you’re married.
How come? The new tax law took away personal exemptions but compensated by roughly doubling the size of the standard deduction.

WHAT MATTERS IS WHAT we focus on. Forget the bad that has happened. Don’t dwell on the goals that remain elusive. Instead, if we’re striving for greater happiness, we should ponder the good in our lives.
This is a great moment to do just that: Most of us are surrounded by friends and family, we have time away from work—and the abundance offered by U.S. society is, in many households, epitomized by a flabbergasting pile of presents.

IF YOU’RE WORRIED that indexing threatens the smooth functioning of the stock market, it’s helpful to spend an hour chatting over coffee with Charles Ellis—which is what I did last week when I was in New Haven, Connecticut. Ellis is one of indexing’s most eloquent advocates, including in his bestselling book Winning the Loser’s Game and in his latest tome, The Index Revolution.
Charley dismisses the idea that index funds are distorting the market—and scoffs at the idea that active management is headed for extinction.

THERE ARE CERTAIN hallmarks of financial rectitude: Never carrying a credit card balance. Maxing out the 401(k). Having an emergency fund. But do these habits deserve the sacrosanct status they’ve achieved?
You won’t find me arguing with paying off the credit cards each month or putting at least enough in a 401(k) plan to earn the full matching employer contribution. Both make ample sense. But in the past, I’ve raised questions about how much emergency money people need and how they should handle this money.

IMAGINE AN IDEALIZED chart that summarizes our finances over the course of our lives. What would the chart look like? Picture these five lines:

Our nest egg grows, slowly at first and then ever faster, hitting a peak of around 12 times our final salary when we retire.
Our portfolio in our 20s stands at perhaps 90% or even 100% stocks. We dial down our allocation in the years that follow, especially during our final decade in the workforce,

SELF-DETERMINATION theory posits that we have three basic psychological needs: the need for competence, relatedness and autonomy. When these needs are satisfied, we’re more motivated and experience a greater sense of well-being.
To this, you might reasonably respond, “What the heck are you talking about?”
As I see it, self-determination theory provides a useful framework for thinking about the connection between money and happiness. We tend to be happier and more enthused about our daily lives if we’re engaged in activities we feel we’re good at (competence),

WHAT’S A GOOD REASON to dial down your stock market exposure? A year after Donald Trump was elected president, many folks are still smarting from their decision to bail out of stocks. Clearly, we shouldn’t lighten up on shares just because we don’t like the guy in the White House.
We also shouldn’t bail out just because stocks sport high price-earnings ratios and skimpy dividend yields. No doubt about it, stocks today are expensive.

IF THERE’S ONE NUMBER that drives our financial lives, it’s our fixed living costs. We’re talking here about regularly recurring expenses that are pretty much unavoidable, such as mortgage or rent, car payments, property taxes, utilities, insurance premiums and groceries.
Why are fixed living costs so important? There are five reasons:
1. The lower our fixed living costs, the easier it is to save. I believe many Americans would love to save more, but simply can’t,

TO IMPROVE OUR behavior, we first need to realize we’re on the wrong path and then figure out the right way forward. Often, this isn’t especially difficult. If we have no savings, obviously we need to sock away some money. If we’re overweight, we should cut back on the calories. If we’re out of shape, we need to hit the gym.
Instead, the real problem is getting ourselves to act.

The contemplative side of our brain is fully aware we ought to eat and spend less,

I JUST INVESTED $1,000 on behalf of a grandchild who may never be born. This reflected two of my enduring preoccupations: figuring out the best way to use my limited wealth for my family’s benefit—and getting an early start, with an eye to squeezing maximum advantage from investment compounding.
To those ends, when I visited my daughter in Philadelphia last weekend, I helped her open a 529 college savings plan. Hannah humored her father by committing to invest $25 automatically every month.

STOCK BUYBACKS ARE here to stay. The Securities and Exchange Commission opened the door in 1982, when it ruled that companies could repurchase their own stock without triggering accusations of share price manipulation. Ever since, more and more companies have taken advantage. Indeed, in recent years, U.S. corporations have spent more money buying back their own shares than paying out dividends.
Good news? I see both plusses and minuses. Here are the plusses:

Once you figure in buybacks,

THE BOGLEHEADS HAD their annual conference this week in the Philadelphia area, where Vanguard Group’s headquarters is located. Devotees of Vanguard’s 88-year-old founder John C. Bogle, the Bogleheads usually meet online at what’s probably the world’s best investment forum.
The star of their annual meeting was, of course, Jack himself. His latest book, an extensive revision of The Little Book of Common Sense Investing, just came out. What was on Jack’s mind?

IF YOUR INVESTMENTS climb in value, hold the champagne—until you figure out whether it’s a onetime gain or a repeatable performance.
Suppose your foreign stocks post gains because the dollar weakens. Or your bonds climb because interest rates fall. Or stocks rise because price-earnings ratios head higher. Or corporate earnings increase because profit margins expand. Or stocks jump because the corporate tax rate or the capital-gains tax rate is cut.
Sound familiar? All of these things have either happened over the long haul or helped drive share prices higher this year. 

PEOPLE OFTEN ACT foolishly and then desperately try to justify their financial sins. A case in point: Those who take on too much debt, can’t get it paid off by retirement—and end up servicing huge mortgages and other loans long after their paychecks have come to an end.
Cue the tap dancing. The indebted start waxing eloquent about the virtues of the mortgage-interest tax deduction and how it’s smart to pay the bank 4% while they invest the borrowed money at 10%.

“WHEN YOU’VE WON the game, stop playing with the money you really need.” That’s something my longtime friend and fellow author William Bernstein is fond of saying—and lately it’s been on my mind.
There’s been much handwringing over 2017’s stock market rally. Looked at objectively, it hasn’t been that startling. As of Sept. 29, the S&P 500 was up 14.2% for the year-to-date, with dividends reinvested—a good year, but nothing compared to the 25%-plus years we saw in 1991,

HAVEN’T GIVEN MUCH thought to estate planning and charitable giving? Here are 10 questions to jumpstart your thinking:

Can you afford to give away money now? You shouldn’t gift large sums to your children or charity unless you’re confident you have enough for your own retirement. There’s no limit on gifts to charity, though your annual tax deduction may be capped. For gifts to family members, you might take advantage of the annual gift-tax exclusion,

I HEAR SO MANY compelling investment arguments. That U.S. stocks are destined to generate lackluster returns because valuations are so rich. That there’s no need to own foreign stocks because you get enough international exposure with U.S. multinationals. That interest rates have nowhere to go but up.
And yet U.S. stocks keep clocking gains, U.S. and foreign shares often generate radically different annual results, and interest rates show no signs of heading significantly higher.

“IT HAS LONG BEEN important to us to help our children and 12 adult grandchildren learn some of the fundamentals of saving and investing,” wrote Henry “Bud” Hebeler in a Feb. 26 email to me. “I sent them each a booklet that I wrote, illuminating the key elements that I have talked about in the past. To test their comprehension, I sent the following message.”
Bud died in August, nine days after his 84th birthday.

GOT DEBT? TO GET a handle on the situation and figure out whether you’re handling your loans and credit cards properly, here are 10 questions to ask:

What’s your net worth? You might have a home and sizable financial accounts. But what are you worth once you subtract all your debts?
Are you taking the necessary steps to stop thieves from borrowing money using your identity? To protect yourself, regularly check your credit reports for errors and accounts you don’t recognize,

WE MAKE ALL KINDS of financial mistakes: spend too much, borrow too much, buy expensive investment products, try to beat the market. To be sure, there are some folks who simply don’t know better. But others give the issue serious thought—and still act foolishly, justifying their behavior with cockamamie arguments. Here are five such justifications that I’ve heard in recent months:
 1. “It’s okay to spend money if it cheers me up.” This is the crack cocaine school of budgeting.

WE’RE WORTH SO MUCH more than the value of our homes and our financial accounts. But how much more? Forget your car and household possessions. Unless you have a Chagall hanging in the living room, it’s safe to assume all this stuff will depreciate and eventually be worth little or nothing.
Instead, our three assets with potentially significant value are our regular paycheck, our Social Security retirement benefit and any traditional employer pension we’re entitled to.

THE EQUIFAX DATA breach seems to be a tipping point, unleashing a barrage of articles—and a boatload of angst—about the security of personal information. What are the potential problems and what’s the best way to defend yourself? I got some great ideas from followers of my Facebook page, where I posted a draft of this article and asked for feedback.
It seems there are five key scenarios where hackers could potentially wreak havoc with your financial life.

TALKING TO A BROKER or insurance salesman? Here are 10 things you’ll likely never hear:

“Wow, your 401(k) has great low-cost institutional funds. There’s no way you should roll that money into an IRA.”
“Do you know that you could buy these funds outside a variable annuity and pay a fraction of the price?”
“Sure, you could make that trade—but probably the only person who will get richer is me.”
“My hunch is, this closed-end fund you’re buying will be at discount within a few months of the IPO.”
“Given the markup on that bond you just bought,

WANT TO BOOST YOUR after-tax wealth? Grab copies of your latest tax return and investment statements—and ask yourself these 10 questions:

What’s your marginal tax rate? That’s the tax rate on the last dollar of income you earn each year. It’s a crucial piece of information as you decide which retirement accounts to fund and how to invest your taxable account. You can get a quick estimate using Dinkytown’s calculator.
Do you expect your marginal tax rate to be higher or lower once you’re retired?

IF WE HAVE DINNER with half-a-dozen others, we might all share the same meal and yet each of us will have a different experience—sometimes radically different. Even as we talk politics, crack jokes and swap gossip, we’ll each have our own thoughts whirling in the background: errands we can’t forget, work issues we need to resolve, incidents from the day we keep replaying, worries we can’t put behind us.
For me, those whirling background thoughts often concern financial notions I want to write about.

REVIEWING YOUR investment strategy? To get you started, here are 10 questions to wrestle with:

How much cash you will need from your portfolio over the next five years? That money should be out of stocks and riskier bonds—and invested in nothing more adventurous than short-term bonds.
What’s the total sum you expect to save between now and retirement? If you look at that future savings as a cash holding and count it as part of your portfolio’s conservative investments,

IT’S A COMMON PLOY among columnists: You start with the provocative statement—and then spend the rest of the article dancing like crazy, trying to defend it. Today’s provocative statement: Except in a few rare instances, I’m not sure why anybody would ever own municipal bonds.
At first blush, this sounds not just provocative, but downright stupid. If you’re in a high income-tax bracket and investing money through a regular taxable account, it would be foolish to buy taxable bonds and then pay income taxes on the interest you earn.

IF YOU DON’T SAVE diligently, you are highly unlikely to amass a decent-size nest egg. Time to make amends? Here are 10 questions to ponder:

Do you regularly spend more than planned? Try writing down every purchase you make. That’ll tell you where your dollars are going—and make you think twice before spending.
How much of your income goes toward fixed living costs? We’re talking about items such as mortgage or rent, car payments,

VANGUARD GROUP is my favorite fund company—and the place where I now keep all my investment dollars. There’s no mystery why: Among mutual fund companies, Vanguard has long been not only the biggest champion of index funds, but also the firm with the lowest annual fund expenses.
Except that’s no longer the case.
Fidelity Investments, BlackRock’s iShares and Charles Schwab have all muscled onto Vanguard’s turf, offering index funds with lower annual expenses. This is obviously a marketing ploy: By offering cut-rate deals on select index funds,

COULD YOU SQUEEZE more happiness from your dollars? Here are 10 questions to ponder:

Which expenditures from the past year do you remember with a smile? Which prompt a shrug of the shoulders and maybe even a twinge of regret? Use those insights to guide your spending in the year ahead.
Could you commute less? Research tells us that commuting is terrible for happiness. You might move closer to the office or try to work at home a few days each week.

THIS BULL MARKET is more than eight years old, U.S. stocks are undoubtedly expensive and there’s even talk of war. Tempted to sell? Problem is, there was also ample reason to be worried three years ago and yet here we are, with shares both higher and more richly valued.
What to do? I fall back on my standard advice: Forget trying to forecast the market’s short-term direction and instead focus on taking the right amount of risk.

WANT TO MAKE SURE your family is adequately protected against financial disaster? Try grappling with these 10 questions:

What’s the minimum dollar amount you need each month to keep your household running? That’s a useful number to know if you’re forced to slash living costs because, say, you lost your job or you need to cover a large, unexpected medical bill.
How would you cope financially if you were out of work for six months?

WE’RE ALL CONSTRAINED by the income we have and the wealth we’ve either amassed or had handed to us. Result: Those on low incomes struggle to cover daily expenses. The middle class pay for today, while also socking away money for their own future. What about the rich? They often use their wealth not only for themselves, but also to help future generations.
These are, of course, gross generalizations. Some folks on low incomes manage to save surprising sums for their own retirement.

GOT COLLEGE-BOUND kids? Make sure you and your children are on the right track financially—with these 10 questions:

Can you afford to help your kids with college costs? It’s important to talk to your teenagers early on about how much financial assistance you can offer—and that’s doubly true if they’ll need to shoulder much or all of the cost.
Will your family receive needs-based financial aid? Use the EFC calculator at CollegeBoard.org to figure out how much aid you might get.

“STOP PULLING MY leg, Grandpa. You’re kidding, right? Is it really true that people:

used to believe they could beat the market?
paid 2% of assets and 20% of profits to hedge fund managers?
got their stock picks from a guy screaming on the television?
thought cash-value life insurance was a good investment?
believed that brokers would act in their best interest?
studied stock price charts to figure out what would happen next?
bought and sold exchange-traded index funds like crazy?

AS I THINK BACK over the past three decades, I have one overriding investment regret.
No, it has nothing to do with the investments I bought. For much of the past 30 years, I’ve owned a globally diversified portfolio, with 100% in stocks when I was younger and closer to 70% now that I’m in my mid-50s. Initially, I owned actively managed funds and a few individual stocks, but I substituted index funds as they became available,

HOUSING IS THE biggest expense for most American families, typically devouring a third of their budget. Are those dollars getting spent wisely? Here are 10 questions to ask yourself:

Should you buy? If you play around with the mortgage calculator at Bankrate.com, you can figure out how big a mortgage you could support with your monthly rent payments. That will give you a sense for whether homeownership is within reach. Even if it is,

WANT TO EARN THE derision of the so-called smart money? Here are 12 ways to get yourself labeled a financial rube:

Express optimism about the stock market.
Stick with capitalization-weighted total market index funds.
Pay off your mortgage early.
 “Arnott vs. Asness? Missed that one. Was it on pay per view?”
Shun alternative investments.
Buy and hold.
Have no opinion on the economy and market valuations.
Dollar-cost average.
Own a target-date retirement fund.
Never cite Ben Graham,

SAVING ENOUGH FOR retirement, and then turning those savings into a reliable stream of retirement income, together constitute our life’s great financial task. Want to make sure you’re on track? Here are 10 questions to ask:

Are you shortchanging your retirement by devoting too much of your income to other goals? For instance, can you truly afford private school for the kids? Do you really have the financial wherewithal to buy a second home?

IT’S ANECDOTAL evidence, so take it with a grain of salt. Still, I’m once again hearing a dangerous argument—that you should always carry the largest mortgage possible, so you have extra money to stash in stocks.
During the roaring bull market of the late 1990s, and during the booming market for stocks and real estate in 2005 and 2006, readers regularly wrote to me, making the same argument. The strategy isn’t without logic—and it isn’t necessarily a sign that stocks are about to crash.

OVER THE 50 YEARS through year-end 2016, the per-share profits of the S&P 500 companies rose a cumulative 1,604%, equal to 5.8% a year, while inflation ran at 4.1%. If share prices had climbed in lockstep with corporate earnings, $1,000 invested at year-end 1966 would have been worth some $17,000 at year-end 2016. On top of that price appreciation, investors would also have collected dividends.
But in fact, over this 50-year stretch, investors fared far better.

SHOULD YOU MOVE when you retire? The numbers can be compelling—especially if you’re like my wife and me, and you live in New York City or one of its surrounding suburbs, where living costs are absurdly high. This was hammered home by the cost-of-living calculator cited by Kristine Hayes in her article yesterday.
I discovered that, by leaving New York, we could cut our living expenses by almost 60% if we moved to Bismarck,

FINANCIAL ASSETS can seem like mere numbers on an account statement, especially at times of stock and bond market turmoil. But hard assets feel more substantial: Your home, artwork and gold coins have a comforting physical presence.
But are they good investments? I’ve been perusing Financial Market History, a collection of essays edited by David Chambers and Elroy Dimson. The paperback costs $38.95 from Amazon, but the Kindle edition is available for free.

EVEN BAD FINANCIAL products and strategies turn out okay for some investors. If that wasn’t the case, they probably wouldn’t attract enough customers to survive, no matter how aggressively they’re peddled. Still, some are so risky or so costly that the chances of a happy outcome are slim. Want to improve your odds of financial success? Here’s how I would categorize the products and strategies on offer today:
Dangerous

Buying stocks on margin
Leveraged exchange-traded index funds
Day trading
Short selling
Writing naked call options

Dubious

Cash value life insurance
Variable annuities
Equity-indexed annuities
Hedge funds
Market timing
Options trading
Technical analysis
Structured products
Load funds
Unit investment trusts
Closed-end funds bought at the initial public offering
Non-traded REITs
Brokers on commission
Carrying a credit card balance

Proceed with Caution

Actively managed funds
Individual stocks
Bonds bought in the secondary market
Closed-end funds at a discount
Rental properties
Vacation homes
Interest-only mortgages
Reverse mortgages
Long-term-care insurance
Claiming Social Security early

Promising

Index mutual funds
Exchange-traded index funds
High-yield savings accounts
Certificates of deposit
Treasury bonds
401(k) plans
IRAs
Health savings accounts
Term life insurance
Rewards credit cards
Owning your primary residence
Conventional mortgages
Home-equity lines of credit
Immediate fixed annuities
Deferred income annuities
Claiming Social Security late

The bottom line: With so many products in the promising category,

AS A YOUNG REPORTER in the late 1980s, trying to learn about investing, I read a slim 81-page volume with an unassuming title: Investment Policy. It remains one of the best investment books I’ve ever read.
Investment Policy was later reissued with a somewhat catchier title, Winning the Loser’s Game, and it’s now widely considered to be an investment classic. Over the years, the book has also been greatly expanded and the 2017 edition runs to 286 pages.

TO BE PRUDENT managers of our own money, we need to read the small print—but we also need to keep an eye on the big picture.
To that end, whenever we make a financial decision, we should ponder three key questions: What’s the tradeoff, does the choice make sense given our broader financial life, and will we feel as good about the decision tomorrow as we do today?
Trading Off. Suppose we remodel the bathroom,

IT’S LONG BEEN an idea that’s captured my imagination: Get a child invested in the stock market at a young age and then leave compounding to work its magic. If stocks notch four percentage points a year more than inflation—which many would consider a conservative estimate—$10,000 invested at birth would be worth $230,500 at age 80. That sort of success would, I suspect, give a significant boost to parental popularity.
When my kids were born,

IT’S ONE OF WALL Street’s more galling rituals: its regular dismissal of everyday investors as stupid. They’re the “dumb money” you should watch so you know what not to buy—the sheep that the “smart money” regularly fleeces.
This narrative was bolstered by early behavioral finance research, which detailed our many mental mistakes: In our overconfidence, we trade too much and make large investment bets. We’re overly influenced by recent returns. We assume our investments perform better than they really do.

IF YOU WANT TO BEAT the market, you need to pick stocks that perform well enough to overcome the investment costs you incur. That task is made harder not only by the market’s efficiency, but also by another hurdle: skewness.
What’s that? The most a stock can lose is 100% of its value, but the possible gain is far greater than 100% and potentially infinite (though no stock has got there yet). In any given year,

IS “SMART BETA” truly smarter and better?
The world of smart beta, sometimes called factor investing, used to be fairly easy to grasp. In 1981, academic Rolf Banz noted that small-company stocks didn’t just outperform their larger brethren. Rather, they outperformed by more than could be explained by their extra risk, as reflected in greater share price volatility. Similarly, in 1992, finance professors Eugene Fama and Kenneth French documented the strong performance of bargain-priced value stocks—and noted that this couldn’t be explained by volatility,

OTHERS ARE LUCKY. But we deserve every penny we have, right? The distinction between “just deserts” and “just plain lucky” strikes me as far messier than we might initially assume. Consider just seven of the ways that we can be financially lucky or unlucky:
1. Birthplace. If we were born in the U.S. or another part of the developed world, we’re pretty much starting the 100-meter sprint within a few strides of the finish line,

IMAGINE YOU HAD ONE shot at offering financial advice to a high school or college graduate. Your mission: Come up with 10 rules that’ll help your graduate succeed financially in the years ahead. What would you recommend? Here’s my list:
1. Question yourself. No doubt you’re entering the adult world with a slew of strong opinions—about what you want from life, what will make you happy, what you’re good at, what constitutes success and how to achieve it.

NO DOUBT YOU WOULD draw up a somewhat different list. But here’s what I consider life’s greatest pleasures:

Talking to loved ones over a glass of wine at the end of the day
Losing myself for a few hours in an interesting piece of work
Walking in nature
Spending time with my kids
French fries
Waking up after a great night’s sleep
Knowing I did the right thing
Wrapping up work on a Friday
Making love
A raucous dinner party
Feeling physically spent after a good workout
Finally sorting out a long-simmering problem
People watching
Taking a nap
Ending the day with a sense of accomplishment

To me,

YOU CAN BUILD a great portfolio with just three index funds: a U.S. total stock market fund, an international fund that buys both developed and emerging stock markets, and a high-quality U.S. bond fund. Thanks to the ongoing price war among major index-fund providers, all three funds are now on offer at extraordinarily low annual expenses.
Below are some of the funds available, with their expenses listed in parentheses. These figures come from fund company websites or a fund’s latest annual report:
Total U.S.

MOST OF US WILL never be fabulously wealthy and we’ll never earn huge incomes. Self-help authors, get-rich-quick seminars and motivational speakers might try to convince us otherwise. But if we turn to these folks for assistance, they’re the ones who typically make heaps of money—at our expense.
Such hucksterism doesn’t just carry a short-term cost, however. It also causes us to think about our lives in the wrong way, leaving us with an unwarranted sense of failure and distracting us from the right path forward.

OUR STANDARD OF living has more than doubled over the past four decades. Has all that extra money bought happiness? Not a chance. In 1972, 30% of Americans described themselves as “very happy.” As of 2016, we’re still at 30%, according to the latest General Social Survey.
Over the 44 years, there was a slight uptick in those describing themselves as “pretty happy” and a tiny decline in those who said they were “not too happy,”

AS INVESTORS FLOCK to stocks in search of heady returns, this is a good time to think about risk. Remember, nobody has a clue how stocks will perform over the short-term, so it’s best to focus on things we can control—namely investment costs, taxes, risk and our savings rate.
Short-term risk is often assessed using beta and standard deviation. I just added a section on those two volatility measures to HumbleDollar’s money guide. While researching the new section,

SAVING DILIGENTLY sounds like such a rudimentary skill that it gets scant respect. Who couldn’t spend 10% or 15% less than they earn, so they set aside a little money for the future? And yet the U.S. savings rate remains miserably low and many folks are pitifully ill-prepared for retirement.
The reality: Saving money may be simple but, clearly, it isn’t easy. What does it take? Here are six key ingredients.
1. There’s the obvious: We need an income.

WE IMAGINE WE finally have everything sorted out, only to wake the next morning with a gnawing sense of uncertainty, plus the milk’s sour and we’re out of coffee.
Welcome to the human condition.
We lead lives bounded by limitations, some self-imposed and some imposed on us. Here are just 15 of the obstacles we face:

No accomplishment leaves us happy and satisfied for long.
Our days are numbered, but we don’t know the count.

WE TRY NOT TO BE too judgmental here at HumbleDollar. But if any of the items below apply to you, you might want to get yourself to the financial emergency room. Here are 33 signs you could be in trouble:

You save on eating out by attending free financial seminars.
You earn extra income by purchasing mutual funds just before they make their distributions.
All your stocks are penny stocks, but they weren’t when you bought them.

“IF YOU DON’T MIND, I have a question for you,” wrote a former colleague. “Should folks be getting out of the stock market? This Trump bump seems like such a crazy bubble.”
Lots of folks are asking this question. How to respond? I fall back on three key points.
First, I believe U.S. stocks are expensive, while foreign stocks are cheap. But that doesn’t tell you anything about short-term performance and only a modest amount about long-run results.

WE’RE A NATION DIVIDED, two camps clinging fervently to their own unshakeable beliefs and baffled at the nonsense that the other camp accepts as truth.
Yes, you guessed it: We’re talking about money management. Let’s call the two camps the Sharks and the Jets. What divides them? Here are seven fault lines:
1. Get Rich vs. Meet Goals. The Jets have one overriding goal—they want to make heaps of money—and they’ll hop any investment train that can get them there.

JEALOUSY IS A TERRIBLE thing—and often unjustified. Our apparently self-assured coworker may be racked by self-doubt. Our rich neighbor may be far less happy than we imagine. And those institutional investors, who can buy all kinds of exotic investments that we can only lust after, may be clocking returns that are notably unimpressive.
This last thought was driven home by Ben Carlson’s short, engaging new book, Organizational Alpha: How to Add Value in Institutional Asset Management.

MANY EMPLOYEES deliberately have too much income tax withheld from their paycheck, so they receive a fat refund each spring. Federal refunds averaged $2,850 per income-tax return in 2014, the latest year for which data is available.
This is completely irrational and entirely sensible.
It’s irrational, because we’re making an interest-free loan to Uncle Sam. Why not have the correct amount of tax withheld, and then take a sliver of each paycheck and pop it in a high-yield savings account,

IN EARLY 2005, when Hannah was age 16 and Henry was 12, I took them out to a local diner and told them exactly how much financial help I’d provide. I would make sure they graduated college debt-free. I would seed a retirement account with $25,000 and a house-down-payment fund with $20,000. On top of that, I’d give them $5,000 upon graduation, plus another $5,000 toward the cost of a wedding or at age 30,

FORGET YOUR political persuasions. Forget health care, terrorism, Roe vs. Wade, the environment, education, women’s rights and voting rights. Instead, focus solely on the economy and markets. Should a Trump presidency affect how you manage your money?
No doubt about it, there’s a temptation to act—and I’ll admit to three modest portfolio changes. In recent months, I’ve invested more in funds that own gold stocks, inflation-indexed Treasurys and foreign stocks, especially emerging markets. But none of these would count as a major portfolio change,

HOMES HAVE BECOME less affordable. But this still looks like a good time to buy a house or trade up to a larger place, especially if you’ll need to take out a mortgage.
Affordability hinges on three key factors: home prices, mortgage rates and household incomes. Lately, both home prices and mortgage rates have been on the rise.
Property prices are up 38.2% from the early 2012 market low, including a 5.6% gain over the past 12 months,

WANT TO MAKE YOUR dollars work harder? Here are 11 of my favorite strategies. In each case, you can find additional information by clicking through to HumbleDollar’s online money guide.
1. Fund a Roth IRA—and let it double as your emergency fund. Ideally, you want to leave your Roth untouched, so you milk as much tax-free growth from the account as possible. But if you need to repair the car or replace the roof,

EARLY IN OUR ADULT life, we get involved with all kinds of dubious financial types. There are the actively managed funds that quickly lose their charm, the insurance salespeople who try to force their policies on us, the market strategists who take us to all the wrong places and the hot stocks that let us down none too gently.
By the time folks get to HumbleDollar, however, I figure they’ve finished playing the field.

IF YOU’RE READING the business section, you need to read between the lines. Here are 14 things financial journalists won’t tell you:

That unbelievably telling anecdote at the top of my article? I scoured the country for three weeks to find that schmuck.
The Dow industrials fell 263 points today. Why? By the time deadline arrives, I’ll have cooked up a reason.
What qualifications do I possess? An ability to dial a telephone.
Actually,

IS IT POSSIBLE TO have too much money? This falls firmly into the “nice problems to have” category. Still, imagine you’re the lucky recipient of a winning Powerball ticket or a rich aunt’s bequest. You might find yourself grappling with three threats to your happiness.
First, you could quickly get used to the finest things in life, with no prospect of ever enjoying anything better. If you’re occasionally upgraded to first class, it’s a treat,

IF YOU WANT intellectual investment stimulation, you’d be hard pressed to do better than ResearchAffiliates.com, the site for Rob Arnott’s money management firm. Rob is one of the smartest guys I’ve met during my three decades bouncing around the financial world. Over the years, he’s offered intriguing insights on topics such as tax management, share dilution and indexing.
Are you confident U.S. stocks will continue to shine? Check out Research Affiliates’ 10-year expected returns.

A READER FROM Europe writes, “In your book, How to Think About Money, you suggest a U.S. investor might have 40% in U.S. stocks and 20% in non-U.S. stocks [plus 40% in U.S. bonds]. I understand that this tilt toward U.S. stocks reflects the fact that U.S. readers should keep most of their portfolio in dollar-denominated investments to avoid currency exchange risk. Since I live in Europe and I will retire in Euroland,

WANT TO GET YOUR finances headed in the right direction? Below are nine steps to take in the year ahead. With each step, I’ve included links to the relevant sections of HumbleDollar’s money guide.
1. Ask why. Before you start opening financial accounts and making trades, you need to figure out what you’re trying to achieve. “Not a problem,” you respond. You know what you want: A bigger house, a faster car, early retirement,

FINANCIAL MARKETS have two primary functions: They can allow us to grow wealthy over time—and they can drive us completely batty along the way. As you mull that mixed blessing, consider six additional thoughts:
1. Spreading our investment bets widely is prudent and betting everything on one stock is foolish. But over the short term, the prudent strategy can lose us money, while behaving foolishly can earn us handsome gains. The lesson: We shouldn’t judge a long-term investment strategy by its short-term results.

IN OUR 20s, WE TEND to be a confident lot: We figure we know what we want from our life, that the goal is to become rich, that money buys happiness and that we can beat the market.
The years that follow teach us otherwise. We discover that things we passionately wanted—a new job, a new house, admission to a particular college or club—don’t prove nearly as life transforming as we imagined. Most of us grow richer as we grow older,

IF WE COULD VIEW today from 10 years hence, our behavior—financial and otherwise—would be entirely different. We wouldn’t flail around so much in the muck of everyday life, fretting and fighting about nonsense. Instead, we’d focus more on issues that matter to our long-term wellbeing.
Problem is, it seems this sense of perspective can’t be taught by schools and colleges. Instead, it’s learned only through experience. It would be wonderful if we could be wise at age 20,

I RARELY MAKE significant changes to my portfolio, but I still love to watch the financial markets. They’re great theater—and, if you can resist the urge to trade, free entertainment. Here are five random observations from the cheap seats:
First, don’t let your political views guide your investment strategy. The stock market has rallied modestly since Trump’s election, horrifying Clinton supporters who fear for the country’s future. But remember, any time you swap stocks for bonds,

HOW MUCH ARE WE all worth? The Credit Suisse Research Institute recently published its 2016 Global Wealth Report, as well as the accompanying Global Wealth Databook. It’s a tricky undertaking, given the difficulty of getting accurate data, even for developed countries. Still, the results are intriguing:

U.S. families own 33.2% of the world’s $256 trillion net worth. This figure combines financial assets (think stocks and bonds) and real assets (principally housing), with household debts then subtracted.

MY DAYS ARE CONSUMED with a hodgepodge of activities—writing books, speeches, radio interviews, my newsletter, blogging and more. What ties all these activities together? More than anything, I want to be part of the conversation.
When I first entered the work world more than three decades ago, I imagined that—once my finances allowed—I would happily retire to a rural area and retreat from worldly hassles. But now that I can afford to retire, I’ve come to realize it’s the last thing I want: The quiet,

WHEN DECIDING whether it’s worth taking an investment risk, your starting point should be the so-called risk-free rate. That’s the return you can earn by taking little or no risk. Got your eye on an investment that might perform better? You need to decide whether the potential extra return, relative to the risk-free rate, is worth the added danger involved.
When experts talk about the risk-free rate, they usually point to some sort of Treasury security.

REAL ESTATE SEMINARS. Initial public stock offerings. International lotteries. Hedge funds. Franchising opportunities. Penny stocks. Multi-level marketing companies.
This is the American lexicon of easy wealth—and yet the only people who seem to end up rich are those who peddle this nonsense. It’s the story of the California gold rush: Riches accrued not to the miners, but to those who sold them shovels, picks, pans and other supplies.
To be sure, hollow promises and empty hype are rife in other areas of our life.

PORTFOLIO MANAGERS and financial advisors are apt to depict money management as rigorously analytical, and sometimes even as a science. Maybe that’s inevitable in an endeavor where almost every decision ends up with a number, whether it’s the amount of life insurance to buy, the percentage allocation to emerging markets or the age at which you should claim Social Security.
But just because the answer has precision doesn’t mean this is a precise business.

THE MARKET FOR intelligent financial writing is, alas, surprisingly small. Why? I believe there are three culprits.
First, many of us don’t care enough about our future selves. Sure, we care somewhat—but not so much that we’ll spend less today, let alone educate ourselves about how to prepare for retirement and other distant goals. Just check out the most popular personal-finance blogs. They focus on topics like coupons, credit cards and juggling debt. Most of us,

AROUND THIS TIME of year financial advisors and the media start talking about taking tax losses. The notion: You sell underwater investments in your taxable account, and then use those realized capital losses to offset realized capital gains and up to $3,000 in ordinary income.
There’s nothing wrong with taking tax losses, though I think the notion is oversold. Unless you’re an active trader or a really bad investor, you probably won’t have any losses to take.

WHAT’S THE STATE of your financial health? Forget your credit score, the past year’s handsome increase in your home’s value or how your salary compares to your brother-in-law’s. In the end, financial fitness comes down to two key numbers.
First, there’s your net worth, which is the value of your assets minus your debts. There’s some debate about what should be included. The easy answer: Don’t delude yourself by counting the value of your car,

FOREIGN STOCKS have become the investment that folks love to hate—and it’s easy to understand why. In the current decade’s first six full calendar years, foreign shares trailed the S&P 500 by almost nine percentage points a year—and they’re on track to lag behind the U.S. again in 2016.
But is this recent performance a good guide to the future? Almost certainly not. Foreign stocks are far less expensive than U.S. shares. On top of that,

WANT TO GET MORE out of your money? Whether you’re spending or investing, try this three-pronged strategy:
1. Reflect
There’s ample evidence that most of us aren’t good at investing or figuring out what will make us happy. Looking to improve? Spend a little time pondering the past.
When during your life were you happiest—and what were you doing? This may help you figure out whether you should change careers and what you might do with your spare time or with your retirement.

WE’RE OFTEN encouraged to follow our instincts. But if we did that, many of us would sit on the couch drinking margaritas, eating Cheez Doodles and cruising online shopping sites, when we should be eating less, saving more and heading to the gym. Often, the key to a better life—financially and otherwise—is to get ourselves to take action we instinctively resist.
This is obvious advice if we’re overweight, rarely exercise, panic when the stock market declines and find our credit-card balances balloon with every passing month.

IF YOU DROVE DRUNK but got home unscathed, you wouldn’t wake up the next morning and think, “I guess it’s okay to get behind the wheel after 13 beers.” Yet, when handling our finances, we do that all the time.
“Markets generate a lot of data, but they don’t generate a lot of clear feedback,” writes academic Terrance Odean in his foreword to Michael Ervolini’s thoughtful book, Managing Equity Portfolios. “Outcomes are noisy.

“PRACTICAL MEN, WHO believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist,” wrote John Maynard Keynes in his 1936 classic, The General Theory of Employment, Interest and Money.
The same can be said of U.S. investors. We grow up repeatedly hearing the same standard financial advice—and often we never question it. Yet there’s much conventional financial wisdom that isn’t especially wise. Consider seven examples:
1.

WE’RE IN A WORLD of low investment returns. Bond yields are tiny—and bond investors can’t reasonably expect to earn anything more than those yields. Money market funds, savings accounts and other cash investments are even worse.
Meanwhile, economic growth is muted and stock valuations are rich, suggesting lackluster stock returns. My best guess: Over the next decade, a globally diversified stock portfolio might return 5% to 6% a year and a mix of high-quality corporate and government bonds could clock 2% to 2½%,

MANY OF US ENGAGE in mental accounting, thinking of our mortgage as separate from our savings account and our job as unrelated to our portfolio. But these are all pieces of our sprawling financial life—and it’s important to understand how everything fits together. Here are 12 examples:
1. If you have plenty of cash in the bank, you can probably raise the deductibles on your auto and homeowner’s insurance.
2. If you’re inclined to buy bonds,

MANY PARTS of our financial life look like bonds, with their steady stream of income. For instance, you can think of receiving a regular paycheck as similar to collecting interest from a bond portfolio. Ditto for the income you might collect from Social Security, a traditional pension plan or an immediate fixed annuity. If you receive a lot of income from these bond lookalikes, that can free you up to invest more heavily in stocks.

LOOKING TO GET more happiness from your dollars? That’s a subject I tackle in my new book, How to Think About Money. Here are nine super-simple strategies that you can put into practice today:
1. Buy a gift for somebody else. Research says we get more pleasure from spending on others than spending on ourselves. Want extra credit? Give a gift when it isn’t expected. The recipient will be especially happy—which means you’ll be,

FOR MORE THAN THREE decades, I have written and thought about money—and I like to believe I’ve been fairly consistent in my financial philosophy. Today, I still live by the same principles I championed starting in 1994, when I became The Wall Street Journal’s personal-finance columnist. I remain almost entirely invested in index funds, my portfolio is heavily tilted toward stocks, I’m a big believer in global diversification and I continue to argue that great savings habits are the key to financial success.

WE’RE SPENDING THE final two weeks before Labor Day on Cape Cod, staying with my in-laws. Everywhere we turn, there’s another delightful home with a wonderful water view. “Wouldn’t it be great to live there?” my wife and I muse, as we imagine how much happier we’d be if we lived in this place of apparently permanent vacation.
We are, of course, completely delusional.
Being in a beautiful spot can be a great joy for a week or two.

STOCK INVESTORS this year are fretting over Brexit, tighter monetary policy and lackluster economic growth. But every year, there’s another compelling reason to bail out of the stock market.
Think about the past half-century: We’ve had wars, political crises, financial crises, double-digit inflation, a double-dip recession, terrorist attacks and more. And yet, if you had stashed $10,000 in a global stock portfolio at year-end 1969 and sat tight through all the subsequent turmoil, you would have more than $450,000 today.

TEN YEARS AGO, the real estate market peaked. Today, prices remain 2.1% below their mid-2006 high—though they’re also 34.8% above their 2012 low, as measured by the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
As property prices have recovered, homes have become less affordable. The impact, however, has been softened somewhat by modestly rising incomes and slightly lower mortgage rates, according to data from the National Association of Realtors. The upshot: If you have the U.S.

HOW LONG WILL YOU live? A recent study from Boston College’s Center for Retirement Research noted that, “A healthy 65-year old man in an employer pension plan has a 25% chance of dying by age 78, or of living to age 91 or beyond.”
Think about the dilemma this creates if you’re retiring at age 65. Even if you are in the middle 50% of the male population—neither among the 25% who die early in retirement nor among the 25% who live well into their 90s—your retirement could last just 13 years or it could be double that,

WHEN I WAS IN MY 20s, with two young children to provide for, I had neither an emergency fund nor nearly enough life insurance. I knew both were important—but I simply didn’t have the money to spare.
Make no mistake: Launching a financial life is daunting. Most twentysomethings have modest incomes, and yet they’re supposed to save for retirement, buy a car, build up an emergency reserve and put aside money for a house down payment,

THE CLEMENTS household has been in turmoil since May. After weeks of shoehorning our life’s possessions into endless cardboard boxes, we moved home and then, three days later, headed off for 10 days of vacation. My wife and I aren’t quite sure how we settled on this crazy schedule (though we’re pretty sure the other spouse is responsible). But we’re painfully aware of the result: It’s been months since we’ve had anything that felt like an ordinary day.

WHAT EXPLAINS America’s miserably low savings rate? There’s no shortage of suspects. You could finger our lack of self-control, as well as our tendency to favor today’s spending and shortchange tomorrow’s goals. You can cite seven decades of post-war prosperity, which has made Americans confident they can weather financial storms, despite skimpy savings and hefty debts. You could blame rising aspirations amid increasing income inequality, which have left low-income families spending ever more as they seek to keep up with the Joneses.

I PROMISE TO BEHAVE better tomorrow. What happens when tomorrow becomes today? All bets are off.
Our broken promises might involve money, such as committing to spend less, save more and pay down debt. Or they might involve some other aspect of our life, such as committing to eat healthier, exercise more and drink less.
All this highlights our irrationality. We may not be experts in nutrition, physical education and money management. But we have a pretty good idea of how we ought to behave.

WALL STREET’S inhabitants have many unpleasant qualities: greed, arrogance, disdain for customers, inflated self-importance, a sense of entitlement. But all this is made worse by another unappealing trait: They’re so damn prickly.
The degree of prickliness is closely correlated with the outrageousness of the fees they charge. I saw this again and again during my decades as a financial journalist. I can’t recall an index-fund manager ever throwing a king-size snit, and it was rare that I got a nasty letter or email from a fee-only financial planner.

IF YOUR GOAL IS lower investment costs, the financial world has never been friendlier. Let’s say you want to buy the broad U.S. stock market. You can choose between a Schwab exchange-traded index fund that charges 0.03% of assets per year, an iShares ETF that levies 0.03% or a Vanguard mutual fund that costs 0.05%.
Those expense ratios are truly astonishing: If you had $100,000 to invest in the broad U.S. market, your annual fund expenses would be just $30 or $50.

MONEY ISN’T AN END in itself. Rather, it’s a means to other ends. But what ends? Some people have a good handle on what they want from their financial life. But for others, it’s a lifelong struggle. They purchase endless possessions that bring only fleeting pleasure. They pursue goals that they belatedly discover aren’t all that important to them. Result: money worries, excessive spending, mountains of debt and fierce family arguments.
How can we avoid this mess?

PEOPLE LOVE TO TALK about themselves. Today’s subject: me. Over my three decades of investing, I have tried to cultivate three traits. In other circumstances, none would be especially endearing. But as an investor, they’re my best friends.
1. I’m clueless. Occasionally, I forget how ignorant I am. I might convince myself that I know where interest rates are headed or that I’ve found a stock market sector that’s truly undervalued. Fortunately,

“ONLY BORROW TO BUY things that’ll appreciate in value.” This was a popular piece of financial wisdom in the 1980s, when I started writing about personal finance. But I can’t recall anyone saying it in recent years. Does that mean this wisdom is no longer wise?
Financial habits have obviously changed. I might make just a single cash machine withdrawal each month, because I put almost every expenditure on my two credit cards, which I use to buy groceries,

TOO MUCH CHOICE CAN be paralyzing. This is the reason many 401(k) plans have winnowed the list of funds they offer: Thanks to the smaller selection, participants are less likely to feel overwhelmed—and more likely to make an investment decision, rather than leaving their cash to languish in the plan’s money market fund.
I think this is a good strategy for other areas of our finances. For instance, you may make smarter investment decisions if you limit your choice by,

RESTAURANT MEALS are my biggest discretionary expense. Want me as one of your customers? Here are my seven rules for restaurants:

If I made a reservation, don’t make me wait 10 minutes for a table.
Dim the goddamn lights. I look better in the dark. So does your restaurant.
Never sell a wine I can find in the liquor store. It’s one thing to suspect you’ve marked up the bottle by 300%. It’s another thing to know with absolute certainty.

THIS WEEKEND, I have been clearing out old computer files that contain half-baked column ideas that never saw the light of day. One such file contained jokes that brokers tell about everyday investors.
My goal was to illustrate the disdain with which Wall Street views its clients. Indeed, I can’t think of another business that is so scornful of its customers, regularly belittling their intelligence and viewing them not as clients to be helped but as sheep to be shorn.

IF THERE’S MONEY you’ll need to spend in the next 12 months, you don’t want to put it at risk, so savings accounts, money market funds and similar cash investments are the only prudent choice. But as your time horizon lengthens, holding cash becomes less and less appealing. The reason: Your money’s purchasing power is pretty much guaranteed to shrink, once inflation and taxes take their toll.
Got cash in your long-term investment portfolio?

HOW DO OUR FINANCIAL habits stack up? Academics Cristian Badarinza, John Y. Campbell and Tarun Ramadorai compared U.S. households with those of 12 other developed nations. Here are nine highlights:

Almost 50% of U.S. households are invested in the stock market, versus 34% in Finland, 25% in Spain, 24% in Germany and 23% in France.
Defined contribution retirement plans—think 401(k) plans and their ilk—are widespread in Australia, the U.K. and U.S., but are far rarer in continental Europe.

YOU WOULDN’T WANT to spend your entire life in the 0% tax bracket, but it’s a nice place to visit. Got stocks or stock funds in your taxable account? If you sell them in the right year, you could realize capital gains of almost $100,000 and perhaps more—and pay a 0% federal capital gains rate.
I was reminded of this loophole as I was flipping through Phil DeMuth’s latest book, The Overtaxed Investor, 

I HAVE NEVER BEEN to Japan and can’t claim any special knowledge of the country—and yet lately it’s been much on my mind. Japan is today’s poster child not only for wretched long-run stock market performance, but also for what happens to economic growth when the workforce contracts. Still, Japan’s troubles make me an even bigger advocate of investing abroad. Below, I explain why.
Never Going Back
In late 2008 and early 2009,

THINK ABOUT THE BAD stuff that didn’t happen. Very few of us will have a year when we crash the car, our home burns down, our employer goes belly up and our big bet on a single stock goes way down. Yet all of these things could happen, which is why we buy auto and homeowner’s insurance, keep an emergency reserve and avoid big bets on a single stock.
Sound sensible? There are two great dangers.

IF YOU WANT to feel short, stand next to somebody tall. Want to feel badly about your portfolio? Compare it to the Standard & Poor’s 500-stock index.
Over the five years through March 31, the S&P 500 notched an annualized total return of 11.6%, versus 7.2% for the Russell 2000 index of smaller U.S. stocks, 2.3% for MSCI’s Europe, Australasia and Far East index and a loss of -4.1% a year for MSCI’s Emerging Markets index.

ASK NOT WHAT THE markets can do for you. Ask what you can do for your portfolio.
After 15 turbulent months for stocks, many folks feel they’re at the mercy of the financial markets. But in truth, we’re far from powerless. We may not be able to control the direction of share prices. But here are seven crucial financial levers over which we have a lot of control:
1. We can figure out how much cash we’ll need from our portfolio over the next five years,

CONFRONTED BY a complicated financial world, the temptation is to fall back on rules of thumb. But are these rules any good? Here are five of the most popular:
1. Save 10% every year. There are two knocks on this rule of thumb. First, the 10% of pretax income is the sum you’re meant to save for retirement—which means those who have other goals, like buying a house and paying for a child’s college education,

TEN-YEAR TREASURY notes are currently yielding 1.9%. That means today’s buyers will likely lose money, once inflation and taxes are figured in—and yet demand remains robust, as evidenced by 2016’s rise in Treasury bond prices.
The healthy appetite for Treasurys partly reflects the vast amount of excess capital sloshing around the global financial markets, as well as the tiny payouts on alternatives such as money-market funds and savings accounts. But it also reflects the current fear engendered by both stocks and lower-quality bonds.

EXXONMOBIL recently announced 2015 earnings of $16.2 billion, just half of 2014’s level. That news sent me scurrying around the Internet in search of a decade-old article I vaguely recalled.
At year-end 2005, Lee R. Raymond retired as ExxonMobil’s chairman and chief executive after 13 years at the helm. The following April, The New York Times reported that Raymond earned $686 million during that stretch, equal to $144,573 a day. The article noted that,

WHY IS THE U.S. economy growing so slowly? Should we bar new immigrants—and toss out some of those already here? Can we afford today’s Social Security retirement benefits? These three huge public policy issues might seem unrelated, but they are connected by two demographic realities: The workforce is growing too slowly—and the retiree population is growing too quickly.
Over the next decade, the U.S. civilian workforce is projected to grow at 0.5% a year,

WITH STOCKS IN turmoil, investors are once again fretting over risk. But what aspect of risk should we worry about? Whenever the notion arises, it’s worth contemplating three questions.
What are the odds of success or failure? Over the past 50 years, the S&P 500 (with dividends reinvested) has lost money in 11 calendar years, equal to once every four or five years. With odds like that, an occasional losing year should be no great surprise.

THE DEBATE OVER when to claim Social Security reminds me of the debate over index funds. On one side, there are those who have studied the issue—and on the other side are crackpots and those with a not-so-hidden agenda. Yes, you should index. Yes, most folks should delay claiming Social Security retirement benefits.
Elsewhere, I’ve written about the breakeven age for claiming Social Security, assuming you took your benefit and invested it. The upshot: Taking benefits at age 66 or age 70 is typically a better bet than taking benefits at 62,

VANGUARD GROUP founder John C. Bogle has an article in the latest Financial Analysts Journal where he reviews the growth of index funds over the 40 years since the launch of Vanguard’s first index mutual fund—and where he makes pointed remarks about their upstart cousins, exchange-traded index funds.
First, consider the phenomenal growth of index funds. They surged from 4% of stock fund assets in 1995 to 16% in 2005, and then kept barreling right along,

A HAPPY LIFE CAN’T be built solely on relaxing, having fun and doing exciting things. To be sure, there’s pleasure to be found in all of these. But I have come to believe that, to lead a life that’s full and satisfying, there is an ingredient that is even more crucial: We need to devote our days to activities that we think are important.
Or, to frame it slightly differently, we want our life to count for something.

COLUMNIST RON LIEBER of The New York Times emailed me earlier in the week, asking for help with a special online feature. The task: Grab a 4×6 index card and, in Ron’s words, “write whatever you want on the *lined* side. A list of 10 things. Or 20 if you write small. A picture. A quote. Whatever. But it should add up to Clements’s guide to financial wellness.”
This was trickier than it seemed.

IT’S JANUARY 1—A DAY of great hope. Those New Year’s resolutions to save more still seem achievable. Nobody’s investment results have yet fallen behind the market averages. Market pundits can still fantasize that this year they’ll be proven right. In this spirit of optimism, check out my 16 ways to improve your life in 2016. Below, you’ll also find some thoughts on bond-market risk.
16 Ways to Improve Your Life in 2016
1.

OUR FINANCIAL irrationality has been well documented by academics focused on behavioral finance. But we aren’t just irrational. We’re also inconsistent in our irrationality. Here are five examples which, while somewhat amusing, can also have dire financial consequences:

Employees will work for 30 years at a job they hate to qualify for a traditional defined benefit pension, but they wouldn’t dream of delaying Social Security for a few years to get a larger monthly check.

INSURANCE IS A WAY to get others to shoulder devastating financial risks that it would be foolish to shoulder on your own. That’s why young parents with few assets need heaps of life insurance—but also why buyers of televisions shouldn’t get the extended warranty. Because the potential financial loss is modest, I’ve often argued that folks should skip not only extended warranties, but also trip-cancellation insurance.
But readers have pushed back, arguing that both types of insurance can make sense—in two particular situations.

LIFE EXPECTANCY HAS increased sharply over the past century—if you consider life expectancy as of birth. But if you look at life expectancy as of age 65, which is what matters for retirees, the improvement for the broad U.S. population hasn’t been nearly so impressive, as I discussed recently.
But it’s a different story if you look at more affluent Americans, notes one of my e-mail correspondents, Bob Frey, a financial planner in Bozeman,

SOARING STUDENT DEBT is putting the kibosh on another major financial goal: buying a home. According to a study by researchers at the Federal Reserve Bank of Cleveland, 40% of those age 18 to 30 have student debt, up from 27% in 2005. For these borrowers, the debt burden is staggering, with student loan payments estimated to devour more than 20% of their income in 2015.
With so much of their income devoted to servicing student loans,

I DON’T TRADE very often, let alone buy new funds. But there’s a good chance I’ll purchase the no-load Vanguard International High Dividend Yield Index Fund, which is slated to be launched this month. It will charge 0.3% in annual expenses for the Admiral Shares, which require a $10,000 minimum investment, and 0.4% for the Investor Shares, which will have a $3,000 minimum.
In theory, it shouldn’t matter whether a stock pays a dividend.

CYNICS SAY THERE are three kinds of falsehood: lies, damned lies and statistics. Yet the right number can pack a mighty punch—and the financial world is full of them. Here are five examples:
1. Most folks don’t beat the market. Consider the miserable performance of most mutual funds. Standard & Poor’s found that 75% of actively managed U.S. stock funds failed to beat the market over the decade through June 30.

STOCKS GET ALL THE attention, which seems a tad unfair. The value of bonds worldwide is some 35% greater than the value of all stocks—plus many other parts of our financial life look suspiciously like bonds. How so? Think about all the streams of steady income that folks collect.
We pull in interest from bank products like savings accounts and certificates of deposit. We collect Social Security retirement benefits. If we’re lucky, we are the recipients of a traditional employer pension plan.

SINCE RETURNING to life as an ink-stained wretch early last year, I have been talking about the likelihood of modest stock returns. My best guess: A global stock portfolio might notch 6% a year over the next decade, while inflation runs at 2%.
It turns out that the person I admire most on Wall Street, Vanguard Group founder John Bogle, also has modest expectations. This is no great surprise: How I think about stock returns has been greatly influenced by Jack’s writing.

FAMILY CAN BE A wonderful asset. Your parents, siblings and adult children might help with home repairs, offer free advice based on their professional expertise and take care of the dog while you’re on vacation.
When the circumstances are right, I think there’s an opportunity to take this even further. For instance, earlier this year, I provided my daughter with a private mortgage, which allowed her to purchase her first home. There aren’t many people I’d strike that deal with,

TWO KEY CHANGES to Social Security retirement benefits were wrapped into the budget bill passed by Congress last week. The changes have big implications for married couples.
First, after April 2016, if you suspend your benefit, any family members collecting benefits on your earnings record will also have their benefit suspended. Second, those who aren’t age 62 by Jan. 1, 2016, will lose the right to file a restricted application, where you claim just spousal benefits,

STOCK MARKET gyrations since mid-August have investors focusing intently on short-run returns. But if you can drag your gaze away from the daily turmoil, you’ll realize this is a colossal waste of time—and a huge distraction from the big story.
This thought occurred to me as I was playing around with the data available at MSCI.com. Take the MSCI World index, which includes 23 developed markets, including the U.S.  From the index’s year-end 1969 inception through Sept.

A GOOD GRASP OF compounding is fundamental to managing money. Without an understanding of the way money grows and shrinks over time, folks can’t fully appreciate the value of starting to save when they’re young, the damage done by large investment losses or the true cost of carrying credit-card debt.
Yet I fear compounding isn’t well understood. This has dawned on me over the past month, as I’ve been teaching an undergraduate course on personal finance.

IT’S ONE OF THOSE indelible teenage memories: visiting the Bank of Baltimore in suburban Washington, DC, in the late 1970s.  I would hand over my babysitting or lawn-mowing money to the bank clerk, who would slide my green bank book into some magic typewriter. After a joyous clatter of keys, my bank book would be returned, and there would be recorded not just my deposit, but also the latest quarterly interest payment.
My children and stepchildren—ages 10 to 27—all have bank accounts.

AFTER A TURBULENT few months for stock prices and with 2015 winding down, talk will soon turn to tax-loss harvesting. The notion: You sell losing stocks in your taxable account, and then use the realized capital losses to offset realized capital gains and up to $3,000 in ordinary income, thus trimming your 2015 tax bill.
Sound like a smart strategy? If you trade individual stocks actively or you’re a really bad investor, tax-loss harvesting might make sense.

IF WE WORK LIKE dogs for 40 years, we’ll get our reward, which is the chance to sit around and do nothing for 20 or 30 years. That’s the definition of a successful life, according to conventional financial wisdom. But it doesn’t sound like a whole lot of fun, does it?
My contention: It’s time to rethink the crazy distinction between work and retirement and, in the process, redefine what counts as a successful life.

AS I WATCH the recent market turmoil, three thoughts come to mind—and one great hope. First, I feel like a shopper waiting for the next sale. As of yesterday’s market close, the S&P 500 was down a relatively modest 8% from its May high. If this drags on, without any further decline, I’ll eventually do a little buying and selling, to bring my holdings back into line with my target portfolio percentages. But to get enthusiastic about stocks,

RETIREMENT MAY BE our final financial goal—chronologically speaking—but we should always put it first. Partly, that’s because retirement is so much more expensive than, say, buying a house or putting the kids through college, so it takes many decades of saving and investing to amass enough for a comfortable retirement. But among financial goals, retirement is also unique in two other ways: It isn’t optional—and we can’t pay for it out of current income.

INFLATION ROSE JUST 0.1% over the 12 months through June, as measured by CPI-U, the most popular inflation measure. But that tiny increase is a bad guide to the future, because it’s held down by the 15% plunge in energy prices over the past year.
So what should we expect? A better guide is CPI-U with food and energy excluded, which rose 1.8% over the past 12 months. Better still, take your cues from the Treasury market.

THE FEDERAL TAX system punishes the middle class, who have earned income and fund retirement accounts. Meanwhile, it favors the wealthy, who are more likely to have substantial sums in taxable accounts and then bequeath those assets.
Okay, now I need to explain myself.
First, there’s the question of earned versus unearned income. Tax rates on wages are higher than those on long-term capital gains and qualified dividends, plus workers also have to pay Social Security payroll taxes.

MEIR STATMAN, a finance professor at California’s Santa Clara University, argues that financial decisions—like everyday consumer purchases—have three benefits: utilitarian (what it does for me), expressive (what it says about me) and emotional (how it makes me feel).
As we manage our finances, we insist our goal is strictly utilitarian, and that all we want to do is make money. But in truth, we often make decisions for expressive or emotional reasons—and these other motivations can hurt our stated goal of greater wealth,

MEB FABER’S  Global Asset Allocation offers a look at the historical performance of a fistful of portfolios, such as those recommended by Rob Arnott, Harry Browne and Ray Dalio. It’s a quick read, with just 129 pages, much of it consumed by charts.
The book’s biggest surprise? How unsurprising the results are. “As long as you have some of the main ingredients—stocks, bonds, and real assets—the exact amount really doesn’t matter all that much,” Faber writes.

“MONEY IS AN opportunity for happiness, but it is an opportunity that people routinely squander because the things they think will make them happy often don’t,” write Elizabeth Dunn, Daniel Gilbert and Timothy Wilson in an article in the Journal of Consumer Psychology that appeared April 2011—and which, needless to say, I only just got around to reading. It’s arguably the best academic article on money and happiness for the general public,

THIS PAST SATURDAY, we visited my daughter in Philadelphia, where she just bought her first home. The trip included moving furniture, heading to Lowe’s, spackling walls and fixing a toilet seat. We also stopped by Ikea, where Hannah bought two sofas, one for $399 and the other for $379.
Think about that: less than $400 for a sofa. In a major city, for that same $400, you might get a 90-minute visit by a plumber.

I LOVE CORRESPONDING with readers, because I find out what’s on ordinary investors’ minds and hence what might make for a good article. And, occasionally, I learn something unexpected.
This week’s lesson: The potential return on EE savings bonds is much higher than I thought. If you look on TreasuryDirect.gov, you’ll learn that the current interest rate is a meager 0.3%. After 20 years, that would give you a cumulative total return of just 6.2%.

“TAKEN ALL TOGETHER, how would you say things were these days? Would you say that you are very happy, pretty happy or not too happy?” We now have the latest answers to this question, thanks to the release last month of results from the 2014 General Social Survey.
In 2014, 32.5% of Americans said they were very happy, versus a 42-year average of 33.3%. Meanwhile, 27% said they were satisfied with their financial situation,

WALL STREET LOVES women—or, at least, it loves to pitch them products through special marketing campaigns. While women’s financial needs differ somewhat from men’s—for instance, they live longer and they’re more likely to need nursing-home care—it’s always struck me that these programs are more about selling than substance.
For further proof, check out this delightful email I received last week: “I recently went to a workshop called ‘Retirement Strategies for Women’ that was put on by Valic. 

I JUST FINISHED reading the Society of Actuaries’ summary of key findings from its “2011 Risks and Process of Retirement Survey Report.” From this, you might conclude two things. One, I’m way behind on my reading. Two, I don’t have a very exciting life. Both may be true. Still, I found the report fascinating. Here are three excerpts.
First, according to the report, “the two major factors in determining longevity are genetics and lifestyle choices.

MOST OF US STRUGGLE with self-control. We eat too much, exercise too little and spend excessively. One solution: Adopt rigid rules of behavior.
For instance, I make it a rule to exercise every morning for at least 40 minutes, always buy whole wheat bread, avoid caffeine after 9 a.m. and eat fruit as a midmorning snack. I’ve followed these rules for so long that they’re no longer rules, but rather ingrained, unquestioned habits.
Not surprisingly,

THIS IS GRADUATION season at colleges across America. Got a kid heading into the workforce this year? Here are three pieces of advice you might pass along.
First, deal with your financial goals concurrently, not consecutively. In other words, don’t save for the house down payment in your 30s, the kids’ college in your 40s and then turn your attention to retirement in your 50s. If you do that, it will be almost impossible to amass enough for a comfortable retirement.

IT’S ONE OF THE stranger arguments for claiming Social Security retirement benefits at age 62—but I’m hearing it with increasing frequency. The contention: We should claim benefits early because we’ll enjoy the money more in our 60s, when we’re traveling and spending more, than in our 80s, when we’ll likely be sticking closer to home.
It isn’t clear to me that we should expect to spend less in our 80s, when we may have significant medical expenses.

I JUST PURCHASED a 2013 Honda CRV. I told the “sales consultant” that I was paying cash. He tried to convince me to take out an auto loan, but I explained that borrowing at 3.4% didn’t make sense when I had cash in a savings account earning 0.25%.
Next, he asked whether I had ever considered leasing. I replied that leasing can make sense if you want to drive a new car every three years—but getting a new vehicle every three years was an expensive habit and I planned on keeping the car far longer.

I RECEIVED AN EMAIL yesterday from a broker in Texas with the subject line: “Why do you want to put good honest advisors out of business?” The broker argued that I was being unfair in favoring advisors who charge fees over brokers who charge commissions.
My response: “You’ve convinced me that you do a fine job for your clients. But there’s plenty of evidence that many advisors don’t. Their clients—to use your phrase—need to get ‘a fair shake.’ How can we improve the odds that,

IT’S THE NEVER-ENDING debate: When should retirees claim Social Security? This piece, I hope, will at least serve to clarify the basic math involved.
Let’s dispense with a few preliminaries. If you have young children, it may be worth claiming at age 62, so your kids can receive family benefits. Meanwhile, if you’re married and you were the main breadwinner, it’s probably worth delaying benefits to age 70 to get the larger monthly check.

AMONG EXPERTS on Social Security, there’s a broad consensus that most folks should delay Social Security to get a larger monthly check—and yet roughly half of retirees claim benefits at 62, the earliest possible age.
Many of these retirees, I suspect, take benefits right away because they need the money or they haven’t given the issue much thought. What about those who have wrestled with the topic and still insist that claiming at 62 is the right strategy?

BESTSELLING AUTHOR Thomas J. Stanley died in a car accident over the weekend at age 71. His death has received scant publicity—which is surprising, given the popularity of his books and his impact on the way we think about money.
With co-author William Danko, Stanley wrote the 1996 blockbuster, The Millionaire Next Door. Who are the rich? It isn’t the folks with the flashy cars and designer clothes. Those aren’t signs of wealth.

MOST OF US WILL enjoy wonderfully long lives. For those born in 2000, the average life expectancy at birth was age 80 for men and 84 for women. That’s a vast improvement since 1900, when life expectancy was age 52 for men and 58 for women.
The bad news: While men can now expect to live 28 years longer and women 26 years longer, the bulk of the improvement—20 years—came in the first half of the 20th century.

ESTATE PLANNING is easy for most folks—but many don’t bother. Surveys regularly find that half of all adults don’t have a will. Yet a will, the right beneficiaries listed on retirement accounts and life insurance, and correct titling on property (such as the house you own jointly with your spouse with right of survivorship) are all most of us need.
Sure, there are other niceties, like drawing up durable powers of attorney for financial and health-care matters,

WALL STREET has changed remarkably during my three decades of writing and thinking about money—mostly for the better. For instance, financial advisors now earn an estimated 64% of their compensation from asset-based fees, rather than from commissions. That eliminates many of the worst conflicts-of-interest, including the incentive to churn a client’s account and sell products that pay the highest commission. Today, you also see many advisors making heavy use of index funds.
Along the way,

WHAT COUNTS AS GOOD financial advice doesn’t change much from one year to the next. In 2014, you should have owned a globally diversified portfolio, kept investment costs low, avoided credit-card debt, maxed your 401(k) and avoided annuity salesmen. Ditto for 2015.
So why do folks read the business section every day, buy personal-finance books and subscribe to business magazines? There’s an entertainment aspect: We like feeling engaged with the wider world.
But there’s also a practical reason: Even if good financial advice doesn’t change much from one year to the next,

PAST PERFORMANCE is no guarantee of future results—and that’s especially true once an investment goes from backwater to broad acceptance. Take real-estate investment trusts. Over the past 15 years, they have been embraced by investors, leading to great returns as folks loaded up on REITs. But that widespread acceptance was a onetime event—and returns from here will likely be more modest, especially with equity REITs yielding just 3.4%, versus almost 9% at year-end 1999.

MY STANDARD ADVICE has always been to keep roughly two-thirds of a stock portfolio in U.S. shares and a third in foreign stocks. As I see it, we invest now so we can spend later. Come retirement, most of us will spend our savings on U.S. goods and services, so it makes sense to have the bulk of our assets in dollar-denominated investments.
But I’m having second thoughts. U.S. and foreign stocks each account for roughly half of global stock-market capitalization,

GOLD HAS NEVER been an investment I’ve been comfortable with. The problem: It has no intrinsic value. Unlike a bond, it doesn’t pay interest and, unlike a stock, it doesn’t have earnings or pay a dividend. Instead, gold has value mostly because the supply is limited and because owners have faith that others will also view it as valuable.
And yet, today, I consider myself a fan—though I favor owning gold-mining stocks, rather than the metal itself.

YESTERDAY MORNING, I spoke at career day at the Philadelphia school where my daughter teaches. My two fellow panelists were a city planner and a fundraiser for a local ballet company. What did we tell the 11th grade kids? Interestingly, all three of us focused on the same four themes:

You’re unlikely to have a single career. Instead, you’ll switch direction as you discover what you’re good at, the world changes around you and you grow weary of your current job.