Heading Home (V)

Kristine Hayes  |  December 11, 2018

WITH MY OFFER of $375,000 accepted, I was faced with coming up with $80,000 to cover my 20% down payment and other closing costs. I had additional expenses as well: There was a home inspection, radon test and sewer assessment that all had to be paid for. And because I’d be breaking the lease on my apartment, I would also need an additional $1,800 for that.
Coming up with the first $50,000 was easy.

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Happy Compromises

Adam M. Grossman  |  December 9, 2018

A LITTLE WHILE back, a friend—let’s call him Paul—recommended a book with an unusual title: How Not to Die. As you might guess, it’s about health, nutrition and longevity. Since Paul is a cardiologist and knows a thing or two about what can land people in hospital, I took his recommendation seriously and immediately ordered a copy.
When the book arrived, I learned that the prescription for not dying isn’t so simple.

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Newsletter No. 38

Jonathan Clements  |  December 8, 2018

IS THAT BUNDLE of joy really a source of joy? Lots of parents—myself included—think so. But the data suggest otherwise. Numerous academic studies have found that parents tend to be less happy than the childless. The latest HumbleDollar newsletter delves into this thorny issue.
The newsletter also includes our usual list of recent blogs. Our next newsletter—the final one of 2018—is slated for Saturday, Dec. 22.
Follow Jonathan on Twitter @ClementsMoney and on Facebook.

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Now or Later?

Julian Block  |  December 7, 2018

WANT TO CUT your tax bill for this year and next? The main thing is to act—or not act—before Dec. 31, while there’s still time to take advantage of tax angles that can generate dramatic savings.
Once we’re beyond Dec. 31, it’s generally too late to do anything but file Form 1040 on the basis of what took place the preceding year. There are a few exceptions. For instance, in early 2019, you can still make deductible contribu­tions to some tax-deferred retirement accounts,

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Grab the Roadmap

John Lim  |  December 6, 2018

FINANCIAL SECURITY is within your reach. Don’t believe me? Here’s a roadmap that demonstrates it’s possible for most Americans.
Sam is a 22-year-old college graduate. He begins working right after college, earning $50,000 a year. He saves 20% of his income the first year, equal to $10,000. Each year, he gets a 2% raise. This raise is over and above inflation, which we’ll assume is zero to keep things simple. In addition to saving $10,000 a year,

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Keeping It Going

Ross Menke  |  December 5, 2018

AFTER YOU’VE become successful and accumulated wealth, what comes next? Americans are facing this question more often than ever before. CNBC notes that the number of millionaire U.S. households grew by more than 700,000 in 2017. This affluence can create a disconnect between parent and child: One generation created the wealth, while the other grows up surrounded by it.
As a financial planner, I’ve learned the younger generation has two options: They can either destroy the wealth or they can add to the family’s legacy.

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First Impressions

Dennis Friedman  |  December 4, 2018

WHEN I WAS age six or seven, an older man came to our house. My mother answered the door. I couldn’t hear what the man was saying, but my mother mentioned the word “garage.” I then followed her to the kitchen and watched her make a sandwich with white bread, sliced bananas and mayonnaise. She then poured a glass of milk and went to the garage.
There, sitting in a lawn chair in our tiny garage,

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November’s Hits

Jonathan Clements  |  December 3, 2018

NO SURPRISE: The most popular blogs on HumbleDollar last month were those devoted to the slumping stock market. But not everybody was obsessing over share prices. Three of November’s top seven blogs were focused on family financial issues:

Just Asking
A Little Perspective
Simple Isn’t Easy
Five Messy Steps
Taking Their Money
Why Wait?
Family Inc.

The site’s most widely read article in November wasn’t one of our blogs. Instead, it was Fanning the Flames,

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Pushing Prices

Adam M. Grossman  |  December 2, 2018

WITH INCREASING frequency over the past month, I’ve been hearing the question, “Why does the stock market keep going down? I understand why the market dipped when the Fed raised interest rates, but why does it keep going down day after day?”
If you’ve been feeling unnerved by recent headlines, you aren’t alone. After gaining 10% in 2018 through late-September, the U.S. stock market reversed course and gave up that entire 10% over the course of just two months,

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Taking Us for Fools

Jonathan Clements  |  December 1, 2018

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.

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Bird in the Hand

Lucinda Karter  |  November 30, 2018

WHEN IT CAME to money, I long had a slight degree of magical thinking—that there would always be enough, that some higher power would ensure that my checkbook was balanced and that I could be that super-generous person, even if I really couldn’t afford to be.
This sometimes landed me in trouble when, for some inexplicable reason, a check would bounce or I discovered I had less in my checking account than expected. To a great extent,

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That Extra Step

Ross Menke  |  November 29, 2018

WHAT DOES financial success look like? To some, it might mean owning a mansion, vacation home and luxury cars. But to most Americans, it’s far different: Being able to pay their bills in full, save for retirement and spend time with family is enough.
Unfortunately, even this level of financial success doesn’t come easily. Look at the current state of our financial affairs. Credit card debt is on the rise. We don’t spend enough time with family.

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Daylight Robbery

Tony Isola  |  November 28, 2018

WANT TO SEE the very worst of human nature? Look no further than financial salespeople—and the way they exploit their clients.
Incentives drive their behavior. High commissions make brokers and insurance agents do unconscionable things. The worst products contain the highest payouts. Result? Consider seven real-life examples. Names are withheld to protect the innocent and, unfortunately, also the guilty.

A widowed nurse inherited her husband’s $1 million IRA. An unscrupulous insurance salesperson convinced her to put the funds into a high-cost variable annuity.

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Required Irritation

Richard Quinn  |  November 27, 2018

IT’S THAT TIME of the year. We seasoned citizens must take our required minimum distributions (RMDs) from our retirement accounts, like it or not, needed or not. Uncle Sam forces us to take these taxable withdrawals, so he can get his share.
It’s a fairly simple process to figure out how much needs to be withdrawn. Determine the total value of your qualified retirement accounts, such as your 401(k) and traditional IRA, as of the previous Dec.

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Counting Down

Adam M. Grossman  |  November 25, 2018

IT’S FIVE WEEKS until the end of the year—which is five weeks during which you can do some valuable financial housekeeping. Here are seven recommendations:
1. Give tax efficiently. In the past, charitable contributions were a direct and easy way to lower your tax bill. But with the recent tax law changes, which include a big hike in the standard deduction and limits on some itemized deductions, this strategy doesn’t work as well.

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