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.
I’VE LIVED in Oregon most of my life. When I was growing up, agriculture, logging and fishing were the state’s dominant industries. In the 1970s and 1980s, the economy began transitioning from one based on natural resources to one rooted in technology, travel and manufacturing. A few decades ago, companies like Weyerhaeuser and Georgia-Pacific were among the state’s leading employers. These days, Intel is the largest, keeping more than 20,000 Oregonians gainfully employed.
But it isn’t just Oregon’s private sector that’s seen plenty of change.
MORE THAN 100 years ago, Thorstein Veblen, the father of behavioral economics, explained the thinking behind most of our purchases and investments with the help of two spoons. In his seminal 1899 book, The Theory of the Leisure Class, Veblen compared a handmade silver spoon, which back then could cost up to $20 ($600 in today’s money) with a machine-made aluminum spoon that cost about 20 cents ($6 today).
Based on strict utility of purpose,
INDEX FUND investing seems to grow more popular by the day—for good reason: For very little in investment costs, you can get a diversified basket of stocks, a return that matches the targeted benchmark and a tiny annual tax bill.
But now that you have yourself such a fine financial vehicle, the responsibility to be a good investor lies in your hands. Or should I say, with your emotions? Even the best investments suffer downturns and spikes in volatility.
WE SPEND TOO much time thinking about what’ll make us happy. We’re always looking for the next high. This morning, we plan our Starbucks coffee in hopes it’ll somehow makes us feel happy. If that doesn’t work, we look for something else, perhaps lunch at a nice restaurant or a weekend getaway to a favorite location.
Don’t get me wrong: There’s nothing wrong with trying to find happiness with these types of experiences. But I think we’re missing the other half of the happiness equation: We should also focus on what makes us unhappy.
IT WAS A BUSY February here at HumbleDollar, with a new article published every day. What proved most popular? Here are last month’s top seven blog posts:
Cancel the Movers
February’s most widely read article wasn’t a blog post, but rather HumbleDollar’s early February newsletter, House Rules. The month’s other newsletter, Out of the Swamp, also received wide readership—and the site continued to see heavy traffic for January’s most popular article,
LAST MONTH, The Wall Street Journal ran an article with a puzzling headline: “How China Pressured MSCI to Add Its Market to Major Benchmark.” Like a lot of market news, this arcane-sounding story came and went without much notice. But it’s worth pausing to understand what it was all about—and why it matters to you.
First, let’s decode the terminology in the article’s headline: A “benchmark” is another word for an index.
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.
WE ARE A NATION obsessed with youth sports. Time magazine says it’s a $15 billion-a-year industry. As many as 60 million kids participate.
Sports are good for kids for all kinds of reasons: promoting exercise and a healthy lifestyle, enhancing team work and relationships, providing structure, instilling confidence to overcome challenges and delivering the joy of playing.
During our children’s sports journeys, we parents are often led to believe that our little sports stars are on the path to the holy grail—a full athletic college scholarship.
WHAT’S WORRYING investors. Stock market valuations. International investing. Jack Bogle’s legacy. Plus two tips for the month ahead. Check out the inaugural podcast featuring Peter Mallouk and me, where we discuss all those topics and more.
Peter’s the president of Creative Planning in Overland Park, Kansas, where I sit on the advisory board and investment committee. The first podcast runs just 20 minutes, so it’s a quick listen. We’ll be back with another podcast next month.
THE LETTER was in a mountain of mail delivered the day after my wife and I returned from holiday. “Dear David Powell, Thank you for your recent application for a Bed Bath & Beyond Mastercard account. Your request… was carefully considered, and we did not approve your application….”
I’ve never been happier to receive a rejection.
We use exactly one credit card, pay it off each month and have never applied for another. This fraudulent application,
AS SHARK TANK star Lori Greiner once said, “Entrepreneurs are the only people who will work 80 hours a week to avoid working 40 hours a week.”
Got the entrepreneurial itch? When I hear people say they have a great business idea, but don’t have the money to launch their business or quit their day job, my heart sinks. They’re missing the point: In today’s world, there are countless opportunities to start a business without any initial investment.
I’VE LATELY BEEN talking to Rachel about getting a dog. Not now, but sometime in the future. When Rachel retires, we’d like to do a lot of traveling and taking care of a dog would be difficult. But when we slow down, I believe having a dog would improve our lives in our declining years.
How so? A few years ago, my neighbor, who is retired, told me she lost her husband. She said his passing was extremely painful.
YOU KNOW HOW certain things people say stick in your mind. Often, it’s a hurtful insult. But for me, the words I can’t forget are, “You’re wealthy.”
I live in a 90-year-old house on a small lot, my wife’s car is 12 years old, our television is 10 years old and the last time I bought a new suit was a dozen years ago. Okay, it’s true, I don’t wear suits very often these days.
SUPPOSE YOU walked into a restaurant and they handed you a menu without prices. Would you conclude that: (a) everything is free; or (b) something funny is going on?
I doubt anyone would choose the first option. It defies logic. Yet this is how the 401(k) industry routinely operates—and large numbers of people are falling for it. According to a 2018 survey by TD Ameritrade, 37% of 401(k) participants mistakenly believe that their 401(k) retirement plan is a free employee benefit—that it carries no fees.