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Need to Know

Adam M. Grossman  |  September 15, 2019

A DOZEN YEARS ago, on my first day of business school, the professor stood at the board and illustrated a concept called “present value.” Truth be told, over my remaining time in school, I don’t think I learned anything more important than I learned in that first hour. It is, in my view, the single most useful tool in all of personal finance. Below, I’ll walk you through the concept and then illustrate some ways it can help you make better financial decisions.

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Declaring Victory

Jonathan Clements  |  September 14, 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,

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Right Turn

Sonja Haggert  |  September 13, 2019

MY HUSBAND is the consumer every company should fear. In my last post, I detailed his multi-month research that preceded our recent car purchase. This time, he decided to investigate auto insurance.
The Gecko’s promise to save 15% had hit a nerve. A savings of 15% on a $2,500 annual insurance bill for two cars would be worth the effort. But, of course, being the thorough person that he is, my husband had to check out every other insurance company on the planet.

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Are We There Yet?

Dennis Friedman  |  September 12, 2019

PREPARING for retirement is like running a marathon. It requires dedication, discipline and endurance.
But there’s also a crucial difference.
When you cross the finish line in a marathon, you know the race is over. But when you quit the workforce, it’s much harder to figure out whether you’ve successfully reached retirement. Why? A happy and prosperous retirement is about money, but it’s also about so much more than money. Here are 15 signs that a wonderful retirement likely lies ahead:

You don’t need an online calculator to tell you that you have enough money,

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Mercedes and Me

Richard Quinn  |  September 11, 2019

MY FATHER was a car salesman. For the last 20 years of his career, he sold Mercedes and he was good at it. He even won a sales contest that included a trip to Germany to tour the factory.
Unfortunately, selling Mercedes does not mean you can afford one. But he did get to drive them. As a kid, I was also hooked. When I was 17, I was allowed to drive a 190SL in the local July 4th parade.

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A Rich Life

Sanjib Saha  |  September 10, 2019

I AM FRUGAL and I feel fortunate to be so. Indeed, among all the financial skills I’ve learned, frugality stands out as the most powerful. But at the same time, I also feel affluent. This might seem like a contradiction, but the mindset of frugality and the feeling of affluence strike me as two sides of the same coin.
Frugality is often associated with being cheap. Frequently, “affluent” is used interchangeably with “wealthy.” I beg to differ.

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Taking Your Lumps

Richard Connor  |  September 9, 2019

I’M ONE OF THOSE lucky folks whose employer had a traditional defined benefit pension plan. I worked in the aerospace industry, starting with GE in the 1980s. Various mergers led to us to become part of Lockheed Martin. Through these multiple sales and mergers, our benefits and pension plan stayed largely the same, though—to be honest—I didn’t pay a lot of attention in my early years and was only vaguely aware of the details.

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Passive Stampede?

Adam M. Grossman  |  September 8, 2019

LAST WEEK, investment manager Michael Burry made waves when he issued an apocalyptic forecast: Index funds, he said, are in a bubble similar to the housing bubble that ended very badly in 2008. Burry couldn’t say when the crash would come, but noted ominously that, “the longer it goes on, the worse the crash will be.”
Burry acknowledged that he’s “100% focused on stock picking,” so—at first glance—his criticism seems not unlike other active fund managers’ criticisms of index funds,

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User’s Manual

Jonathan Clements  |  September 7, 2019

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,

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Giving Voice

Mark Eckman  |  September 6, 2019

“WE NEED TO TALK.” How many relationships have ended with those four words? They’re a verbal cue to take the news calmly and move on with life. But I would guess just as many relationships have ended without any words or possibly with harsh words. That’s what happens when we don’t talk about our relationship—or about our financial situation and financial plans.
A few years ago, my wife used those four words after I announced I was reducing our life insurance.

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Leaves Me Cold

Richard Quinn  |  September 5, 2019

ALTHOUGH it’s only been a few months since I first heard the term, I’m already tired of all the chatter about the financial independence/retire early (FIRE) movement. This so-called movement is so irrelevant that I don’t know why anybody, including me, writes about it—and yet my curmudgeonly instincts compel me to do so.
Don’t characterize me as a movement hater. To each his own. But consider a recent story in MarketWatch about a couple—he’s age 44,

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Healthy and Wealthy

Dennis Friedman  |  September 4, 2019

I STILL KEEP in touch with three high school buddies. One of them, Brent, isn’t doing well. He has high blood pressure, poor eyesight caused by glaucoma and creaky knees that make it hard to get around, and he’s recovering from heart surgery.
My other friend, Robert, is a diabetic with poor vision, suffers from neuropathy pain in the foot, needs a cane to walk and is on medication for various ailments.
Burt, my third pal,

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Life Support

Rand Spero  |  September 3, 2019

A NEIGHBOR complained to me that his car insurance rates soared after a fender bender. I assumed that he or his wife were involved. But it turned out he was referring to his daughter’s accident. Even though she was 27 years old and had a good paying job, he continued to assume financial responsibility for her car. Is this smart parenting—or does it stymie our children’s transformation into well-rounded adults?
When my friends and I graduated college,

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August’s Hits

Jonathan Clements  |  September 2, 2019

LAST MONTH saw the second-highest number of page views in HumbleDollar’s 32-month history. Among the new articles published in August, here are the seven that were most widely read:

As the Years Go By
Improving With Age
Not My Guru
Double Checking
Never Mind
Room to Disagree
Think Bigger

Meanwhile, the two most popular newsletters were Whither Vanguard and No Worries.  But last month’s biggest surprise was Terms of the Trade, a piece by Jim Wasserman devoted to key concepts in the emerging field of media literacy.

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Adding Value

Adam M. Grossman  |  September 1, 2019

NIKOLA TESLA was a brilliant inventor, with nearly 300 patents to his name. He also had some unique habits. Among them: Every night, before he sat down for dinner, he would ask his waiter for a stack of 18 napkins. He would then use them to carefully wipe down his silverware. Even at the Waldorf Astoria hotel, where Tesla lived for decades and where the silverware was presumably clean, Tesla insisted on this time-consuming process before every meal.

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