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Smooth Talker

Jonathan Clements  |  March 29, 2017

AS INVESTORS FLOCK TO STOCKS in search of heady returns, this is a good time to think about risk. Remember, nobody has a clue how stocks will perform over the short-term, so it’s best to focus on things we can control—namely investment costs, taxes, risk and our savings rate.
Short-term risk is often assessed using beta and standard deviation. I just added a section on those two volatility measures to HumbleDollar’s money guide. While researching the new section,

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Tick, Tock

Sam X Renick  |  March 28, 2017

AS A CHILD, I thought my father had a memory problem. He had a habit of repeating stories and sayings. It made me feel sad, until I figured out it was intentional. He didn’t believe in bells: School was never out.
“Make it a habit to keep and grow some of the money you make,” was one of Dad’s sayings. I was reminded of it recently, after reading that seven out of 10 Americans have less than $1,000 in their savings account—the sort of place you might turn if you have a financial emergency.

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What It Takes

Jonathan Clements  |  March 25, 2017

SAVING DILIGENTLY sounds like such a rudimentary skill that it gets scant respect. Who couldn’t spend 10% or 15% less than they earn, so they set aside a little money for the future? And yet the U.S. savings rate remains miserably low and many folks are pitifully ill-prepared for retirement.
The reality: Saving money may be simple but, clearly, it isn’t easy. What does it take? Here are six key ingredients.
1. There’s the obvious: We need an income.

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Getting an Edge

Steven Aguiar  |  March 23, 2017

I’M ALWAYS on the lookout for easy ways to improve my finances. Here are five simple strategies I use:
1. Open a high-yield savings account. The interest rate on a regular Bank of America savings account is 0.01%. Ally Bank, on the other hand, offers 1%, almost a full percentage point more. For a savings account with $10,000, that’s the difference between earning $1 a year and $100, and it takes just 15 minutes to set up.

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Wanting for Something

Kristine Hayes  |  March 21, 2017

WHEN I CREATE my monthly budget, I subtract expenses I deem to be “needs” from my take-home pay. What’s left is money I can spend on items I desire—my “wants.” For budgeting purposes, I divide my discretionary income into four equal amounts and budget that amount for each week of the month. Psychologically, I find it easier to keep my budget on track if I can see how much I spend on a weekly basis.

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Take It to the Limit

Jonathan Clements  |  March 18, 2017

WE IMAGINE WE finally have everything sorted out, only to wake the next morning with a gnawing sense of uncertainty, plus the milk’s sour and we’re out of coffee.
Welcome to the human condition.
We lead lives bounded by limitations, some self-imposed and some imposed on us. Here are just 15 of the obstacles we face:

No accomplishment leaves us happy and satisfied for long.
Our days are numbered, but we don’t know the count.

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Zeroing In

Zach Blattner  |  March 16, 2017

BY THE TIME we reach our late 20s, we’ve made a set of fairly inflexible choices that dictate our ability to spend and save. Our career arc and earnings potential are established. Our debt from undergraduate and graduate programs has been accumulated. The number of dependents we’ll support is getting clearer. Changing any of these decisions is either impossible or mighty tough.
But there’s a second tier of financial choices that are in constant flux—and where we have the greatest flexibility to influence our spending and saving.

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Contain Yourself

Adam M. Grossman  |  March 14, 2017

WE’RE USED to seeing money as one of life’s limiting factors. But if you receive a financial windfall, money may no longer be the limitation it once was. While that might sound liberating, it can also create anxiety. The reality is, constraints serve a useful purpose: They provide structure. Without that structure, you may find yourself feeling rudderless.
I experienced this when I received a windfall several years back. I remember walking into an Apple Store,

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Troubling Signs

Jonathan Clements  |  March 11, 2017

WE TRY NOT to be too judgmental here at HumbleDollar. But if any of the items below apply to you, you might want to get yourself to the financial emergency room. Here are 33 signs you could be in trouble:

You save on eating out by attending free financial seminars.
You earn extra income by purchasing mutual funds just before they make their distributions.
All your stocks are penny stocks, but they weren’t when you bought them.

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Buckle Up

Jonathan Clements  |  March 10, 2017

WANT TO BUY one of the fastest growing parts of the global economy—at some of the cheapest valuations currently on offer? Check out my latest client letter for Creative Planning, where I sit on the investment committee and advisory board. You might also enjoy the article Fiduciaries Matter written by my fellow advisory board member and bestselling author Jane Bryant Quinn.
Related: Reemerging Markets

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Try This at Home

Nicholas Clements  |  March 9, 2017

OUR HOUSE is 65 years old. I have lived in it for almost half that time. Originally, I bought the house with my twin brother. Now my husband and I live in it. I feel like I was a pioneer of the tiny house movement. The house is 750 square feet. The bedrooms all measure 10 feet by 10 feet. The living room is all of 150 square feet. There are one-and-a-half bathrooms. The previous owner had a family of six.

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Unanswerable

Jonathan Clements  |  March 8, 2017

“IF YOU DON’T MIND, I have a question for you,” wrote a former colleague. “Should folks be getting out of the stock market? This Trump bump seems like such a crazy bubble.”
Lots of folks are asking this question. How to respond? I fall back on three key points.
First, I believe U.S. stocks are expensive, while foreign stocks are cheap. But that doesn’t tell you anything about short-term performance and only a modest amount about long-run results.

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Where It Goes

Kristine Hayes  |  March 7, 2017

WHEN I DIVORCED a few years ago, I found myself needing a crash course in financial management. My first task: Understanding where my money went—and figuring out where I could cut back.
Today, I create a budget each month. I don’t use any type of program or app—I prefer paper and pen. At the top of a page, I write down my take-home pay. I use take-home pay, rather than my $5,500 monthly gross income,

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March’s Newsletter

Jonathan Clements  |  March 4, 2017

GREED AND FEAR play huge roles in how we manage money. But there’s also another ingredient: testosterone. I see it again and again in the messages I receive. There’s a substantial slice of the investing population who view money management as a ferocious, mano-a-mano contact sport that they have the self-confidence and skill to win—and anybody who suggests otherwise is a “loser” and “boring.” It sometimes feels like these folks live in an alternate universe—a topic I discuss in March’s newsletter.

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Wall Street Story

Jonathan Clements  |  March 4, 2017

WE’RE A NATION divided, two camps clinging fervently to their own unshakeable beliefs and baffled at the nonsense that the other camp accepts as truth.
Yes, you guessed it: We’re talking about money management. Let’s call the two camps the Sharks and the Jets. What divides them? Here are seven fault lines:
1. Get Rich vs. Meet Goals. The Jets have one overriding goal—they want to make heaps of money—and they’ll hop any investment train that can get them there.

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