WHEN WE AIM FOR financial independence, what we’re usually trying to do is to convert our current work time into future free time. We exchange our time and labor for money today. The wealth we accumulate then buys us a future that’s free from labor.
Given this exchange of labor for future freedom, what’s the most efficient way to speed our progress? According to a research paper, “Capitalists in the 21st Century,” the best strategy is to own a business.

YOU MIGHT WANT TO check your mailbox. Mr. Market has been sending around a book of discount coupons on some great index funds and individual stocks.
Twenty-two percent off the S&P 500’s closing high set earlier this year. Seventeen percent off the Dow Jones Industrial Average. How about a whopping 33% off the Nasdaq Composite?
Still kicking yourself for not scooping up Amazon’s stock (symbol: AMZN) in early 2020 when it was—adjusted for the recent stock split—below $100?

THE INVESTMENT consulting firm Callan publishes its periodic table of investment returns each year. It shows the results of key asset classes on a year-by-year basis. Each asset class is color-coded and ranked from best to worst. This makes it easy to see not just annual performance, but also relative results.

The periodic table is valuable because it illustrates that there’s rarely a consistent pattern to relative returns from one year to the next.

TARGET-DATE FUNDS are riding a wave of popularity. Morningstar reports that investors placed $170 billion into these funds in 2021, more than double their 2020 inflow. Morningstar also reports that, as of 2019, 58% of all 401(k) participants were invested in a target-date fund. That percentage is likely higher today.
It’s clear why the funds have become so popular. They can be an excellent solution for retirement savers who prefer a hands-off approach. To this end,

IF YOU’VE TRIED TO buy a car or a home recently—or have even just been to the grocery store—I’m sure you’re aware how much prices have jumped over the past year. John Taylor certainly has an opinion on the topic.

Taylor is an economics professor at Stanford University. While not a household name, he’s a leader in economic circles. Before Jerome Powell was appointed Federal Reserve chair in 2018, Taylor was a candidate for that spot.

SOMEBODY OUT THERE is buying and holding longer-term bonds—but you probably shouldn’t. Yes, they’ll notch big gains if interest rates fall, but perhaps suffer even bigger losses if the upward trend in rates continues.
To be sure, investors in almost all bonds have been hit this year, with the iShares Core U.S. Aggregate Bond ETF (symbol: AGG) down 9.6% in 2022 through May 13. Shorter-term funds have fared better but are also in the red,

I’VE BEEN GIVING salient and sagacious financial advice to HumbleDollar readers for coming up on two years. Before that, I’d shared my wisdom for as long as I can remember with family, friends and—in a few cases—complete strangers. Sometimes, though, you need to listen.
Recently, I attended a presentation given by Carlson Financial, where various personal finance issues were discussed while I ate a complimentary eight-ounce filet mignon. One of the issues raised: When determining the total cost of a financial advisor,

BOXER MIKE TYSON observed that, “Everybody has plans until they get hit for the first time.”
Well, the bond market has me black and blue and gnashing my teeth. Have Treasury bonds lost their diversifying power in these inflationary times? For decades, they’d mostly held their ground or gained during stock market routs. Not this year.
My longstanding plan has been to invest in conventional short- and intermediate-term Treasury funds to cushion volatility and as a source of money to add to my stock funds when the market tanks.

THE FEDERAL RESERVE has a daunting responsibility. Among its jobs is “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” This is commonly referred to as its dual mandate of maximum employment and price stability.
Yet those two aims are often at odds. That’s because of the inverse relationship between unemployment and inflation, embodied by the Phillips Curve. Attempts to maximize employment—or minimize unemployment—often stoke the flames of inflation.

IN A NOTE TO CLIENTS last week, Deutsche Bank analysts wrote that they expect a “major recession.” What should you make of ominous predictions like this?

First, don’t panic. Yes, Deutsche Bank is a big institution. But it’s worth noting that last week two equally prominent institutions also weighed in—with a different point of view. Goldman Sachs argued that a recession is “not inevitable.” UBS wrote that, “We do not expect a recession.” They can’t all be right.

IF PAST YEARS ARE any guide, about 40,000 shareholders will be in Omaha, Nebraska, today for Berkshire Hathaway’s 2022 annual meeting. I first went 35 years ago.
While working as a financial advisor in the mid-1980s, I began to read about the investment success of Warren Buffett and Charlie Munger. At the time, Berkshire’s stock sold for around $2,700 a share. Yesterday, it closed at $484,340.
I bought one share—and then booked a flight to Omaha for the 1987 stockholder’s meeting.

WITH THE MARKETS in a tizzy this year due to roaring inflation and the war in Ukraine, I’ve been kicking myself for not listening to my gut. At issue: an investment decision I made last fall.
When I left the corporate world in September, I took with me the 401(k) balance I’d built up over my five years with my former employer. I’d been aggressive with my investment choices in that 401(k), stashing half the account in Vanguard Small-Cap Growth Index Fund (symbol: VSGAX) and half in Vanguard Mid-Cap Index Fund (VIMAX).

MY MOST SUCCESSFUL investment is one that I tried to throw in the trash.
I own 126 shares of Anthem, a large health insurance company. I believe I got my shares on April 30, 2002. That’s when Anthem bought Trigon, a small insurer based in Virginia that my family used for health insurance.
In 1996, Trigon began the process of converting from a policyholder-owned company into a stockholder-owned company. It went public in 1997.

WITH THE RELEASE of March’s Consumer Price Index, we now know that a risk-free investment yielding 9.6% will be available as of May 2. I’m speaking, of course, about Series I savings bonds from the U.S. Treasury, which have lately been all the rage. To take advantage, all you need to do is open an account at TreasuryDirect.gov. Last year, it took me all of 10 minutes to open my account.
I first wrote about I bonds back in October 2021.

MY FATHER WAS BORN in 1936 in Brooklyn. He attended Erasmus High School, earned a degree in chemical engineering from Brooklyn Polytechnic High School and then went on to study dentistry at New York University. He was a strong bridge player and loved tennis, golf and—most of all—downhill skiing. Just about everything my father wanted to do, he did well. But he wasn’t without flaws.
In the late 1960s and early 1970s, my father had a stockbroker friend through whom he bought shares,