HARRY MARKOWITZ WAS a graduate student in economics at the University of Chicago. It was 1954, and he had just finished defending his thesis. Most of the committee accepted his work. But Milton Friedman, an economist with a national reputation and easily the most influential member of the economics faculty, had a problem. While he found no errors in Markowitz’s work, the problem was that it contained no economics. Markowitz’s thesis was about investments and,

I’M DEBATING whether my life is better described by Tom Cochrane’s Life Is a Highway or Eddie Rabbitt’s Driving My Life Away. In a recent article, I noted that our family has driven our cars about 1.9 million miles. Since I’m the family’s King of the Road, I’ve been along for at least two-thirds of that ride.
I’m also, alas, the king of lost time.
The average commuting speed in the Washington,

I ENJOY WATCHING superhero shows. It feels good to see the hero swoop in and save the day. Truth is, however, I also get a bit annoyed, as there are always some citizens who seem to ignore imminent danger. They sometimes just stare at it coming, doing nothing to get out of harm’s way.
It’s almost like they just count on the hero saving the day, and that’s a bad strategy. Strangely, many people in real life adopt the same strategy,

WHEN PEOPLE DISCUSS financial matters or take the “A Year to Live” class that I lead, there’s a common refrain: They don’t want to be a burden to their loved ones. They’re concerned about having enough money to take care of themselves when they’re older.

But even if we have plenty of money, we can still end up being a burden. How so? Our kids and other loved ones don’t want the stuff we’ve gathered over the years.

LET’S SAY YOU BOUGHT a few stocks on the advice of your financial advisor for $300,000. One year later, that same advisor says you’ve done really well on the stocks—which are now worth $400,000—and you should sell. After the sale, you net a $100,000 profit. Would you be willing to pay your advisor a 6% fee on the $400,000, equal to $24,000, for the advice he gave you?
If so, I’d think you were crazy.

IN THE EARLY 1990s, my employer—an aerospace manufacturer—sent a small group of employees to Winnipeg, Canada, to help set up a production line. We were chosen because of our familiarity with the product involved.
The company provided us with a furnished apartment, a rental car and $40 a day for food. They flew us back home every two weeks, so we could take care of personal business. I’d fly to Los Angeles on Friday and return to Winnipeg on Monday.

DURING A RECENT vacation, my son Max and I played Monopoly. I was amazed at all the personal finance lessons you can learn from the game—one that was first produced in 1935.
We played by the actual Monopoly rules. That includes not getting money just by landing on Free Parking. It also means not auctioning off properties if the person landing on them decides not to pay the list price.

MY WIFE AND I recently re-watched a video made by one of our nephews. In the video, he interviewed his grandparents—my wife’s parents—about their lives. He wanted to understand what they’d done or taught that built such strong family bonds that lasted over such a long time.
My wife is one of five children: three boys and two girls. Each of her four siblings is married with at least two children—11 kids in total.

THE DRUMBEAT OF “retirement crisis” is much too loud. While 54% of retirees believe there’s a national retirement crisis, just 4% describe their own retirement situation as a crisis. And whereas 90% of recent retirees are able to spend freely, within reason, or can cover their needs and also engage in some discretionary spending, only 10% say that they’re on a strict budget.
Concern about running out of money is regularly exaggerated by inflated estimates of life expectancy.

READER COMMENTS on one of my blog posts prompted me to dig deeper into my thinking about asset allocation. A trip to the HumbleDollar archive led me to a Charley Ellis article where he emphasized that readers should incorporate Social Security, pensions and annuity payments into any analysis of their asset allocation and portfolio risk.
A guaranteed stream of income is clearly valuable. I knew this, but I had missed the obvious conclusion—that the net present value (NPV) of these income streams should be considered part of a portfolio.

WOULD YOU BASE important financial or life choices on false or misleading information? Of course not. Yet, when deciding on key economic and social issues, that’s exactly what people often do.

I’m addicted to social media. I follow advocacy groups focused on Social Security, health care and taxes, as well as the politicians who are especially engaged in these issues.

Some tweets and memes reinforce what people want to believe or provide the easy answers they seek.