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Underwater Overseas

Jonathan Clements  |  January 5, 2017

THE U.S. ECONOMY REMAINS ROBUST, with unemployment at a nine-year low and real GDP growing at an annualized 3.5% in the latest quarter. Meanwhile, overseas markets are confronting the double whammy of political upheaval and economic malaise. So why own foreign stocks? That’s the topic I tackle in my latest client letter for Creative Planning.

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My Robo and Me

Steven Aguiar  |  January 5, 2017

ALGORITHMS, those fancy computer calculations that can help you find the closest slice of pizza, are upending entire industries, including money management: They have given rise to a new generation of robo-advisors such as Wealthfront—the company I use to manage my investments.
Why do I trust a computer with my savings? The truth is, humans aren’t very good at choosing investments. Exchange traded funds (ETFs)—low-cost passive funds that own a broad collection of stocks—have emerged as an attractive alternative to actively managed mutual funds.

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The Buck Stops There

Jonathan Clements  |  January 4, 2017

A READER FROM EUROPE WRITES, “In your book, How to Think About Money, you suggest a U.S. investor might have 40% in U.S. stocks and 20% in non-U.S. stocks [plus 40% in U.S. bonds]. I understand that this tilt toward U.S. stocks reflects the fact that U.S. readers should keep most of their portfolio in dollar-denominated investments to avoid currency exchange risk. Since I live in Europe and I will retire in Euroland,

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Bucket List

Zach Blattner  |  January 3, 2017

WHEN MY WIFE and I started dating, we were both in the habit of budgeting through rough approximation. We made ballpark guesses about the percentage of our income that went toward specific spending categories and goals. But in truth, neither of us had much idea how much we spent on most things, other than obvious fixed costs like rent or car insurance. As a result, our ability to plan for long-term goals was limited.

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New Year, Fresh Start

Jonathan Clements  |  January 2, 2017

WANT TO GET your finances headed in the right direction? Below are nine steps to take in 2017. With each step, I’ve included links to the relevant sections of HumbleDollar’s money guide.
1. Ask why. Before you start opening financial accounts and making trades, you need to figure out what you’re trying to achieve. “Not a problem,” you respond. You know what you want: A bigger house, a faster car, early retirement, a second home.

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We’ve Moved

Jonathan Clements  |  January 1, 2017

WELCOME TO OUR NEW HOME, HumbleDollar.com. Why the new address? You can learn more in my latest newsletter, which went out to email subscribers this morning. The newsletter also discusses six key investment insights—and how they’re relevant to today’s market.
Meanwhile, please feel free to wander around our new home. You’ll find pretty much everything that was on JonathanClements.com, including blog posts and newsletters. But you’ll also discover one huge addition: the entire contents of my Jonathan Clements Money Guide,

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Messing With Us

Jonathan Clements  |  January 1, 2017

IT’S A NEW YEAR—and with it comes our new address: HumbleDollar.com. Why the change? If you spend some time on the site, you’ll discover I have made some big changes:

The entire contents of the Jonathan Clements Money Guide, my annual financial guide, are now housed on HumbleDollar and available at no charge. HumbleDollar is, I like to think, the internet’s best organized, most comprehensive source of personal finance information.

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Why HumbleDollar?

Jonathan Clements  |  December 31, 2016

IN OUR 20s, we tend to be a confident lot: We figure we know what we want from our life, that the goal is to become rich, that money buys happiness and that we can beat the market.
The years that follow teach us otherwise. We discover that things we passionately wanted—a new job, a new house, admission to a particular college or club—don’t prove nearly as life transforming as we imagined. Most of us grow richer as we grow older,

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Time Will Tell

Jonathan Clements  |  December 24, 2016

IF WE COULD VIEW today from 10 years hence, our behavior—financial and otherwise—would be entirely different. We wouldn’t flail around so much in the muck of everyday life, fretting and fighting about nonsense. Instead, we’d focus more on issues that matter to our long-term wellbeing.
Problem is, it seems this sense of perspective can’t be taught by schools and colleges. Instead, it’s learned only through experience. It would be wonderful if we could be wise at age 20,

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Sitting in the Bleachers

Jonathan Clements  |  December 21, 2016

I RARELY MAKE significant changes to my portfolio, but I still love to watch the financial markets. They’re great theater—and, if you can resist the urge to trade, free entertainment. Here are five random observations from the cheap seats:
First, don’t let your political views guide your investment strategy. The stock market has rallied modestly since Trump’s election, horrifying Clinton supporters who fear for the country’s future. But remember, any time you swap stocks for bonds,

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Worldly Possessions

Jonathan Clements  |  December 17, 2016

HOW MUCH ARE WE ALL WORTH? The Credit Suisse Research Institute recently published its 2016 Global Wealth Report, as well as the accompanying Global Wealth Databook. It’s a tricky undertaking, given the difficulty of getting accurate data, even for developed countries. Still, the results are intriguing:

U.S. families own 33.2% of the world’s $256 trillion net worth. This figure combines financial assets (think stocks and bonds) and real assets (principally housing), with household debts then subtracted.

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Really Useful Engine

Jonathan Clements  |  December 14, 2016

MY DAYS ARE consumed with a hodgepodge of activities—writing books, speeches, radio interviews, my newsletter, blogging and more. What ties all these activities together? More than anything, I want to be part of the conversation.
When I first entered the work world more than three decades ago, I imagined that—once my finances allowed—I would happily retire to a rural area and retreat from worldly hassles. But now that I can afford to retire, I’ve come to realize it’s the last thing I want: The quiet.

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Your Risk-Free Rate

Jonathan Clements  |  December 10, 2016

WHEN DECIDING whether it’s worth taking an investment risk, your starting point should be the so-called risk-free rate. That’s the return you can earn by taking little or no risk. Got your eye on an investment that might perform better? You need to decide whether the potential extra return, relative to the risk-free rate, is worth the added danger involved.
When experts talk about the risk-free rate, they usually point to some sort of Treasury security.

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Fast Or Slow?

Jonathan Clements  |  December 7, 2016

I HAD AN EMAIL from a reader today, asking whether—”with the markets a bit overvalued lately”—he should invest his cash in the stock market as a lump sum or average in over time. It’s a question that almost compels you to start guessing the market’s direction—something none of us can do. What’s the alternative? Think about risk.
My response: “It depends on how much you currently have saved vs. how much more you expect to save between now and retirement.

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Selling Shovels

Jonathan Clements  |  December 3, 2016

REAL ESTATE seminars. Initial public stock offerings. International lotteries. Hedge funds. Franchising opportunities. Penny stocks. Multi-level marketing companies.
This is the American lexicon of easy wealth—and yet the only people who seem to end up rich are those who peddle this nonsense. It’s the story of the California gold rush: Riches accrued not to the miners, but to those who sold them shovels, picks, pans and other supplies.
To be sure, hollow promises and empty hype are rife in other areas of our life.

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