EMERGENCY MONEY IS dead money—and it’s rarely looked more dead.
Just as we shouldn’t carry more insurance coverage than we really need, we shouldn’t hold more emergency cash than necessary. Why not? Excessive money spent on insurance and kept in our emergency reserve will likely come with a hefty opportunity cost. Indeed, thanks to the double whammy of inflation and taxes, our cash reserve will slowly depreciate, and that’s especially true given today’s rock-bottom interest rates.

MY SPRING CLEANING this year was less eventful than last year’s, except I found my fanny pack. I bought it in the early 1990s but misplaced it some years ago. It was so handy for air travel, especially international trips, that I ignored all fashion worries.
I forgot what I paid for the fanny pack, but it was certainly one of my best buys. Frankly, only a few such purchases stand out. Here’s my list of half-a-dozen similar items.

THE FEDERAL RESERVE caught the market by surprise this past week. In fact, it seemed like Fed policymakers caught even themselves by surprise.

Previously, they had been forecasting that interest rates would stay near zero through 2023, on the assumption that inflation would remain manageable. But as the country has emerged from hibernation, inflation has run much hotter than expected. As a result, an increasing number of Fed officials now expect they’ll have to raise rates much sooner.

WHEN IT COMES TO financial questions, there are two common reasons people disagree. Sometimes, they disagree about the facts—whether, say, interest rates are headed higher. But sometimes, people disagree for another reason: They see the world through different lenses.

Last week, I mentioned that Ray Dalio, a prominent hedge fund manager, had recently said that bonds “have become stupid.” I disagreed, but not because of the facts. There’s no disputing the impact of today’s low rates.

ONE HALLOWEEN, SOME of my teenage buddies and I were having a great time throwing water balloons at trick-or-treaters. It was a lot of fun—until we got caught. After getting hauled down to the police station for a lecture, and then receiving another one when I got home, I’ve been pretty much on the straight and narrow ever since, including when it comes to money.
Over the years, I’ve discovered various tried-and-true rules of investing and those have been the keys to my success.

I RECENTLY READ an interesting article about why you shouldn’t pick individual stocks. The author mentioned the classic reason: “Since most people (even the professionals) can’t beat the index, you shouldn’t bother trying.”
He also mentioned another reason: “The existential dilemma of doing so… how do you know if you are good at picking individual stocks?” The author goes on to mention that, since luck plays such a significant factor in stock-picking, it could take a very long time to determine if you’re good or just lucky and,

THERE’S A LITERARY rite of passage that requires every financial blogger to write at least one article about free money. Far be it for me to break with this tradition.
Titling an article “free money” will catch most readers’ attention. After all, we all want something for nothing. You know what they say: “Money found is twice as sweet as money earned.” It’s also a topic that’s a bottomless well of ideas limited only by the creativity of the writer.

TWO DECADES AGO, we witnessed the bursting of one of history’s biggest stock market bubbles. Many investors were left burned and bewildered. At the time, I was chief executive of Vanguard and saw the need for a practical, back-to-basics guide to help investors navigate the financial markets. My 2002 book Straight Talk on Investing was born.
Since then, we’ve endured a few more market shocks, plus the investing landscape has changed considerably—mostly for the better.

COVID-19 WILL SOON, I hope, be in the rearview mirror. But as Winston Churchill said, “Never let a good crisis go to waste.” Here are five lessons I’m taking away from the pandemic:
1. Government spending. Some folks tell me they’re claiming Social Security retirement benefits as soon as they’re eligible because the system’s trust fund will be depleted within the next decade or so, at which point benefits could get cut.

A LOT OF INVESTMENT math focuses on how money grows over time. But as an attorney who’s worked with many clients hoping to retire in comfort, I find myself thinking more about risk—and how the math can work against us. Consider five sets of numbers:
Inflation’s toll: 0.98
Got cash? If you multiply that sum by 0.98, you’ll see your money’s purchasing power a year from now. This assumes 2% inflation, which is the Federal Reserve’s stated target.

WHEN WE’RE YOUNGER, we tend to focus almost exclusively on our portfolio’s performance. But as we grow older, risk becomes a bigger concern. The irony: That greater focus on risk is often the key to better long-run investment results.
Want to make wiser portfolio choices? Keep these nine notions in mind:
1. Bad results happen to good investors. Let’s start with one of the most counterintuitive notions in investing: Just because we score spectacular short-term gains doesn’t mean we made smart decisions—and just because our portfolio struggles in the short run doesn’t mean we got it badly wrong.

SAVE 30% OF INCOME? No way.
That’s been my reaction whenever I’ve read about people saving 30% or more. I look back and think about making monthly mortgage payments, raising four children, paying for college and trying to save something to supplement my pension. For my wife and me, a 30% savings rate simply wasn’t possible. Nevertheless, people do it.
To find out more, I asked folks on a Facebook retirement planning group, “How do you save 30%?” The responses boiled down to nine key factors.

WITH STOCK PRICES so high and interest rates so low, many folks are thinking about buying gold. Tempted to take the plunge? Ponder these nine issues:
1. No income. Gold pays no interest or dividends. That means gold’s return hinges entirely on its price going up. Gold ownership also means you must forgo the interest and dividends you’d have otherwise earned on alternative investments. Still, with interest rates so low, the opportunity cost of owning gold—at least in terms of lost income—is very low right now.

AT LEAST ONCE A DAY, I find myself saying, “Another truism of financial planning is….” To be honest, I don’t know whether the 12 concepts below meet the strict definition of “truism,” but I’ve found them hugely helpful in navigating the world of personal finance:
1. There are always two answers to every question. There’s the mathematical answer and there’s the “how do you feel about it” answer. It’s okay—and, in fact,

DURING MY SCHOOL days growing up in India, my exposure to English literature was confined to textbooks that reprinted essays and short stories, or portions thereof. One of them was a humorous piece by Stephen Leacock from his book Winnowed Wisdom.
The excerpt was titled “Old Proverbs Made New” and it seemed funny even to a middle-schooler with a limited grasp of the English language. It argued, with examples, that proverbs get outdated and need to be rewritten.