I RECENTLY HAD LUNCH with four friends I’ve known since the seventh grade. Because of the pandemic, this was the first time we’d all seen each other in more than a year. Every time we’re together, I’m reminded of how important my friends were in helping me start a new life when I left home for the first time. Our continuing support for each other is probably the reason we’ve stayed close for 57 years.
AFTER 20 YEARS, the U.S. military has withdrawn from Afghanistan. The news brought back memories of the year I spent deployed there—and a crucial financial lesson I learned. Perhaps that lesson resonates even more today given the past year’s pandemic and the role deferred gratification has lately played in many of our lives.
When you’re deployed to a combat zone, the government doesn’t tax your wages. Consequently, most soldiers can sock away a lot of money.
I LEFT MY CORPORATE job a year ago to start a second career in higher education. At the time, I offered five pieces of advice to those considering a similar change. That advice included creating a plan with your family, giving your desired new career a test drive and taking advantage of deferred compensation plans. A year into my new career change, here are four additional tips:
1. Estimate the point of no return.
THE RAGING DEBATE of 2021 is whether the inflation we’ve been experiencing this year will be transitory or more permanent. The Federal Reserve’s official stance is that the spike in inflation is a perfect storm of pent-up demand, supply-chain disruptions and year-over-year comparisons that are “inflated” relative to 2020’s pandemic-induced deflation, and eventually will revert to more normal levels.
Recent hotter than expected inflation data—including the consumer price index (CPI), producer price index (PPI),
ON THE SURFACE, Social Security seems straightforward: During our working years, we pay into the system. Then, when we’re older, the government sends a check every month for life.
But scratch the surface and you’ll find that Social Security offers a number of additional benefits. Among them: a benefit for spouses. This can be highly valuable, but the rules around it are complex and very specific. Consider, for example, the late talk show host Johnny Carson.
IT’S RISKY TO LAY down hard-and-fast rules for money management because, for every rule, there will almost inevitably be exceptions.
Still, as they say, “nothing ventured, nothing gained.” Below you’ll find 18 rules. Want to quibble? Hey, that’s why HumbleDollar allows readers to comment on articles.
1. Minimize cash. With short-term interest rates so low, keeping money in savings accounts and money market funds seems especially grim right now. But the truth is,
IS SUCCESS WITHIN reach for anybody willing to work hard? We like to think of the U.S. as a meritocracy with a one-to-one correlation between effort and achievement. It’s a notion that allows us to feel that we’re in control of our destiny and that we’ve fully earned the success we enjoy.
But in truth, there are many factors that continue to tilt the playing field one way or another. Socioeconomic status, race and gender still sway the game.
VANGUARD GROUP released its latest How America Saves report last month. The survey details the behavior of participants in Vanguard-managed 401(k) and similar retirement plans.
Wall Street likes to depict everyday investors as fools. But the Vanguard report paints a very different picture: Employees are getting smarter. They’re saving more, trading less and aren’t so inclined to take big positions in their employer’s stock.
As I flipped through the numbers and charts with a cup of coffee on a recent Saturday morning,
MY NEPHEW GRADUATED from high school this past spring and starts college in the fall. Alex is fortunate to have received a full scholarship from his college of choice.
Wait, scratch that.
Alex isn’t fortunate. Rather, his diligence and academic success in high school have been rewarded.
While Alex needs no help paying for college, his notable accomplishment should still be recognized. We’d write him a check, but where’s the fun in that? How about a financial gift that’ll allow some one-on-one time that might spark an interest in sensible investing?
RETIREMENT SAVINGS and decent health insurance are major goals for most Americans. Politicians attempt to help. Yet the resulting laws and regulations are confusing to the point of being counterproductive.
Can the average worker figure all this out? Nope. It’s too complex and unnecessarily so. Lucky Americans may get help from an employer, but many folks are on their own. Consider seven examples:
1. You can contribute up to $19,500 to a 401(k) in 2021 if you’re under age 50.
GROWING UP, I WAS heavily influenced by the ideals of the Protestant work ethic. Working hard and finding career success provided great satisfaction, so I assumed I’d handle the second half of my life in the same way as the first.
This wasn’t a great plan.
I was around age 50 when I came across the writings of psychiatrist Carl Jung and his discussion of the two halves of life. For me, the timing couldn’t have been better.
THE 4% RULE IS ONE of the best-known ideas in personal finance. But is it really a rule? And does it apply to you?
Let’s start at the beginning. The father of the 4% rule is a financial planner named William Bengen. Back in the early 1990s, he became frustrated with the prevailing rules of thumb for retirement planning. He found them too informal and set out to develop a more rigorous approach. The question he sought to answer: What percentage of a portfolio could a retiree safely withdraw each year?
I RECENTLY WROTE about how my wife and I downsized to our beach home. It had long been a dream of ours and we’re thrilled it came about. Right after the move, we climbed on a plane and experienced another common dream of retirees—living in an exotic tropical paradise.
We visited our son, daughter-in-law, grandson and their Boston terrier in Nosara, Costa Rica. Nosara is a beautiful village and resort area carved out of the jungle on Nicoya Peninsula,
ARE THERE TIMES when a near 100% international stock allocation makes sense? I believe there are—and that today is just such a moment.
Never in my life have I had such a low allocation to U.S. stocks. My overall portfolio is 60% stocks and 40% bonds. But the stock portion is comprised of just 15% U.S., with the remainder held in international stocks, split evenly between emerging and developed markets.
I realize that’s unorthodox.
IF YOU WANT TO SEE your fellow citizens at their least appealing, look no further than online discussion forums. All too often, they’re a repugnant cesspool of anger, bullying and boastfulness. The comments posted on HumbleDollar are typically fairly civil, though even they occasionally veer toward the unnecessary nastiness that’s rampant everywhere else.
But here’s what these virulent commenters miss: Their postings reveal far more about themselves than about the subject they’re opining upon.