I RECENTLY LISTENED to a podcast featuring Richard Thaler, the Nobel prize-winning economist. To say I’m a huge fan of his work is an understatement. Thaler has that rare ability to communicate a complex topic—behavioral economics—to a lay audience in a way that’s both accessible and enjoyable. His book Misbehaving offers a fascinating historical account of behavioral economics, a field he played a major role in developing.
But it was a casual comment that Thaler made toward the end of the interview that really caught my attention.
MY WIFE AND I are planning a cross-country trip next year, and we need a new vehicle for the journey. The dealer we visited didn’t have a lot of SUVs to choose from because of the global semiconductor shortage. The SUVs in stock had dealer add-ons, such as a $1,900 alarm system and $1,500 for paint sealant. My thought: The dealer was trying to take advantage of the vehicle shortage by adding more options to drive up the price.
WHEN I MATCHED UP our monthly spending with the terms of the Starbucks Rewards Visa card, I calculated that I could potentially get a free drip coffee every day of the year. Given the proliferation of Starbucks in our Los Angeles suburb—including one within 400 yards of my office—it’s tempting to cover my caffeination by swiping my credit card.
After some deliberation, however, I’m going to focus instead on amassing travel rewards points. For the past five years,
ALL EYES ON FRIDAY were focused on Federal Reserve Chair Jerome Powell. “Will Powell announce an aggressive taper plan?” many market-watchers wondered. Not a whole lot new was presented, and that triggered a stock market rally. The S&P 500 notched its 52nd all-time high of 2021 and the Russell 2000 small-cap index had one of its best days of the year.
Small caps got off to a hot start in 2021. By mid-March, the Russell 2000 was up 19% on the year,
DEAR 18-YEAR-OLD: You may be better educated and more intelligent than me. You may have more potential. But for sure you don’t have more experience. I have 60 years on you, so—as hard as it may be—take my advice:
There are no guarantees in life. You have to make of it what you will. Never give up.
You will have obstacles placed before you. You will be treated unfairly. You will have to deal with less-than-honorable individuals.
WOULD YOU ADVISE someone—who doesn’t drive, doesn’t need a car and doesn’t plan to get one in the foreseeable future—to buy car insurance? I wouldn’t. But it seems some financial advisors think otherwise. That, at least, is the impression I got when an acquaintance, whom I’ll call Laura, mentioned her variable universal life insurance policy to me.
A single woman in her mid-40s, Laura has a decent income and lives on her own. She has no one other than herself to support financially.
I’VE HEARD SOME parents say that, while they don’t like their kids watching online videos, at least they aren’t being exposed to the ads that inundate kids on regular TV.
Nope. Advertising is at least as pervasive, and definitely more insidious, on the web. Kids have shifted from network television to web-viewing, and advertisers have trailed right behind them with Willie Sutton logic—because that’s where the money is.
YouTube is the most popular video streaming site in the world.
IT’S BEEN WIDELY reported that the Social Security Administration will likely announce a roughly 6% cost-of-living adjustment (COLA) for 2022. That would be the largest increase in monthly benefits since 1982, when retirees’ checks climbed 7.4%.
But the impact on retirees is more complicated than you might imagine. Boston College’s Center for Retirement Research recently published a paper entitled, “The Impact of Inflation on Social Security Benefits.” The paper investigates three ways that inflation interacts with benefits.
IF SOMEONE ASKS ME what my favorite day is, I’d have to say the second Wednesday of the month. That’s when my Social Security check gets deposited into my checking account. I’ve received three checks so far and each one has been a joy. The experts might be right when they say retirees who have predictable income are happier. At age 70, I feel like a little boy who just got his first bicycle.
PARTICIPANTS IN 401(K) plans will soon be getting estimates of how much income they might receive in retirement if their plan savings were spent purchasing an annuity. Under a new rule, plan providers are required to provide participants with at least two annuity estimates annually on their account statements. One would project the lifetime income from the purchase of a single-life annuity and the other from a joint-and-survivor annuity. A joint-and-survivor annuity extends payments over two lives,
GROWING UP, my older brother beat me in just about every sporting match we played. Basketball, football, tennis—it was remarkable.
I noticed his key to winning was avoiding mistakes. Take tennis. My brother would casually return a soft lob over the net to avoid an unforced error. Meanwhile, I’d pretend I was Andy Roddick and go for the forehand winner every chance I got. My brother would simply watch as my aggressive shot landed outside the lines.
OVER THE PAST decade, my wife and I have hired others to handle most home improvement projects. It all came down to a lack of time: We had two young children and demanding jobs in the corporate world. But thanks to my recent switch to teaching, I have more free time, so I decided to tackle a few projects this summer. Here are three things I learned:
Painting is possible. For more than a year,
IN CASE YOU’RE wondering, that means, “Where is my blog?”
In retirement, it’s important to keep busy doing things you enjoy. For me, that’s blogging. It’s fun and I learn from readers’ comments.
On Aug. 17, I received an email addressed to “Karen” saying my site’s domain was expiring. Who’s Karen? It must be a scam, so I ignored it. The next day, my blog couldn’t be found.
I logged on to the domain seller and paid the fee.
I FELL IN LOVE with baseball in 1965. My parents were in the midst of divorcing. I found sanctuary listening to San Francisco Giants’ games on the radio. I put on my batting helmet and pretended I was Willie Mays swinging at every pitch or diving on my bed catching imaginary lines drives. Willie had a magical year and, although the hated Dodgers nosed us out in the end, a lifelong passion was born.
ON THE NEWS the other day, they were discussing technological change. “It happens gradually and then suddenly,” said the guest commentator.
The commentator was borrowing a memorable phrase from a book written almost a century earlier, Ernest Hemingway’s 1926 novel The Sun Also Rises.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Although this fictional conversation refers to financial ruin, “gradually and then suddenly” is also how most financially successful people accumulate wealth.