Garbage In

Adam M. Grossman  |  October 21, 2018

IN THE MID-1990s, Federal Express had a problem. Though the company’s safety record was exemplary, regulators had proposed new rules that would have posed an operational nightmare for the giant shipper.
The company flew Boeing 727 air freighters that each accommodated eight containers. Though they had never had a problem, the government’s concern was that if two heavier-than-average containers were loaded next to each other, it could cause the plane to become dangerously unbalanced.

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Newsletter No. 34

Jonathan Clements  |  October 20, 2018

HOW CAN WE GET the most out of our income and savings? Two years ago, in a slim volume called How to Think About Money, I offered my answer. Earlier this month, a new edition of the book came out, geared toward a global audience. To mark the new edition’s publication, I’ve devoted HumbleDollar’s latest newsletter to How to Think About Money’s 12 key recommendations.
The newsletter also includes a promo code that can save you money,

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Slow Going

Ross Menke  |  October 19, 2018

HAS THE PERCENTAGE of individuals across the world living in extreme poverty remained the same, doubled or halved over the past 20 years? If you answered halved, give yourself a pat on the back. According to, you’re among just 9% of respondents who answered the question correctly. Despite what you hear on the news, the world is gradually becoming a better place.
It’s difficult to recognize progress, including our own financial progress, when it happens slowly over long periods of time.

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Won in Translation

Jiab Wasserman  |  October 18, 2018

RETIREMENT IN America can be like plodding through a long, dark tunnel, with seemingly no light at the other end. I found, however, that if one looks sideways, there’s an escape hatch: retiring abroad.
For my husband and me, our search led us to Spain, having heard it had a low cost of living, excellent health care and a good climate. We visited a few times and fell in love, particularly with the city of Granada.

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Reality Check

Richard Quinn  |  October 17, 2018

CAN YOU LIVE on Social Security alone? The answer is a big fat “it depends.”
I was recently taken to task by a reader, who stated he and his wife live just fine on their combined $30,000 in Social Security benefits. I also know of a retiree who says he’s quite happy living in a trailer out west on $1,300 a month. How does that square with the conventional wisdom that, once retired, you need 80% of preretirement income,

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Cutting the Bonds

Dennis E. Quillen  |  October 16, 2018

I DON’T WANT bonds in my portfolio—or, at least, not to the degree traditionally recommended in financial planning guidelines.
For years, I had accepted the premise that bonds should be included in a serious investor’s portfolio. Not that I necessarily followed that dictum. But I accepted the idea that young people should have a low percentage in bonds, and increasingly greater percentages through middle age and retirement.
I kept thinking that someday I’d come around to more bonds,

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All Too Human

Adam M. Grossman  |  October 15, 2018

THE STOCK MARKET this year reminds me of one of those Rorschach inkblot tests. The broad U.S. market has gained more than 4%, including dividends, but it’s difficult to know what to make of it. Bulls point to this year’s tax cuts and believe that the market’s gain makes complete sense. Bears, on the other hand, note that the market has quadrupled in less than 10 years and conclude that it’s at an unsustainably high level.

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Stepping Back

Adam M. Grossman  |  October 14, 2018

AS YOU NO DOUBT noticed, the stock market took investors on a wild ride last week. On Wednesday, the Dow industrials dropped more than 800 points. On Thursday, the Dow lost another 546 points. Friday was better, up 287 points, but there was still plenty of stomach-churning volatility.
At times like this, I’m reminded of Warren Buffett’s motto: “You want to be greedy when others are fearful, and you want to be fearful when others are greedy.” While that certainly sounds logical,

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The Other Half

Jonathan Clements  |  October 13, 2018

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.

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403 Beware

Tony Isola  |  October 12, 2018

PUBLIC SCHOOL teachers’ biggest problem isn’t rowdy students. Instead, it’s their retirement plans that should be sent to the dean’s office.
After leaving my job as a foreign currency trader for an international bank, I became a middle school history teacher. My teaching career lasted more than 20 years. One of the worst things I encountered was the state of public school teachers’ non-ERISA 403(b) plans.
Having a front-row seat to the carnage was not pretty.

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Bearing Gifts

John Lim  |  October 11, 2018

AFTER A DECADE of rising stock prices, it’s time to look forward to the next bear market—and the three big benefits it’ll confer.
First, a market decline is a great financial gift, but only if you continue to save and invest. While it certainly won’t feel like a gift, a bear market enables you to invest at lower prices, both by adding new savings and reinvesting dividends.
Imagine you could choose from among three possible stock market scenarios.

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Taking Inventory

Dennis Friedman  |  October 11, 2018

MY NEXT DOOR neighbor had her home burglarized. The thieves stole some expensive electronic equipment and jewelry. In the aftermath, I thought I should make a list of my valuable possessions and take a photo of each one, in case I ever have to file an insurance claim.
Here’s my list of valuables:
1. Fender Telecaster guitar.
Yes, that’s my complete list. I really don’t own anything of value, other than that guitar, which my parents gave me in 1968 for my 17th birthday.

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Give and Receive

Julian Block  |  October 10, 2018

MANY OF MY CLIENTS volunteer to perform chores for religious institutions and other charitable organizations. I remind them that volunteers qualify for tax breaks. Their itemized deductions include what they spend to cover unreimbursed out-of-pocket outlays—though there are limits to the IRS’s generosity.
I caution clients not to count on deductions for the value of the unpaid time that they devote to charitable chores. Let’s say the prevailing rate for the kind of services they render is $100 per hour and they spend 100 hours to render those services during the year in question.

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Mini-Golf, Anyone?

Richard Quinn  |  October 9, 2018

I WAS RECENTLY on vacation. Okay, the truth is—since I’m retired—I’m always on vacation. Still, it was away-from-home time that costs extra money.
Back in the olden days, vacation meant our family of six squeezed into our 1972 two-door Duster and we were off on a six-hour drive to Cape Cod for one week. We saved for the entire year for that vacation. We allocated $100 a day to spend. If we spent less than $100,

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Double Feature

Jonathan Clements  |  October 8, 2018

THE INTERNATIONAL edition of my 2016 book, How to Think About Money, was published today by Harriman House in the U.K. Another book, you ask? Yes, this is indeed my second book launch in as many months. In September, John Wiley & Sons published my eighth personal finance book, From Here to Financial Happiness.
For the new edition of How to Think About Money, I updated a host of numbers,

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