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Good in Theory

Article by Adam M. Grossman  |  Jun 14, 2025

STATISTICIAN GEORGE E.P. Box once made this observation: “All models are wrong,” he said, “but some are useful.” This certainly applies to finance, where many of the concepts are imperfect but can nonetheless still be useful. Below are four such examples.
Market valuation. Are stocks overpriced? It’s a question without an easy answer. Even academics who have studied the topic can never be entirely sure. Consider the cyclically adjusted price-earnings (CAPE) ratio.

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Let’s Stir Up the Bee’s Nest Again- Another Way of Calculating Net Worth

Forum by David Lancaster | Jun 13, 2025

Here is an interesting article I just read on my weekly Boldin (previously New Retirement) newsletter.

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How are you dealing with or plan to deal with inflation in retirement? By R Quinn

Forum by R Quinn | Jun 11, 2025

Someone on HD asked if my inflation adjusted retirement income today still equaled my base salary when I retired. 
The answer is a resounding no. For every dollar of base pay in 2009 I would need $1.50 today. Since my pension does not have a COLA, any automatic adjustment is up to Social Security, but that is less than a quarter of our income. 
So, now I am 50% behind – no panic yet, but I am glad I didn’t start out say,

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Should we envy the super wealthy? Have they taken our piece of the pie leaving us with the crumbs? Nope! By Dick Quinn

Forum by R Quinn | Jun 9, 2025

What triggered this post was a Facebook meme claiming the wealthiest 0.1% have gained $4.4 trillion in the past two years, that they have grown their wealth at the expense of average Americans and that “without them your wealth would have doubled”
When I read that, my reaction is “that’s just wrong and so what, they earned it.”  I wish I was that smart. But that is not the typical reaction. Many people readily believe such a meme and are willing to bash the wealthy.

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Going too far with FIRE: The downside of being in the financial advice business – RDQ

Forum by R Quinn | May 30, 2025

I always thought the glowing stories of FIRE folks were a bit dodgy. Much of the time they aren’t even retired in the traditional sense. Sometimes they go too far sharing their acquired wisdom for cash.
I followed one blogger for several years. She shared her frugal ways, extreme in my view like buying her two-year olds shoes in a second hand thrift shop. She wrote a book, gained a lot of publicity, was featured in news articles and gave advice. 

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Getting Others Going

Forum by Jonathan Clements | May 28, 2025

Want to help a young person get started on a lifetime of investing? Hear all about the Jonathan Clements Getting Going on Savings Initiative on this podcast hosted by Rick Ferri. My fellow guests on the podcast were Morningstar’s Christine Benz and The Wall Street Journal’s Jason Zweig. Please give a listen—and please consider donating. One way to donate: Buy copies of  The Best of Jonathan Clements, a collection of my Wall Street Journal columns.

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Listen to the Markets

Forum by Jonathan Clements | May 25, 2025

Every so often, markets go stark, raving mad. Think about the tech-stock bubble of the late 1990s or the real-estate market in 2005 and 2006. But most of the time, markets—which reflect the collective wisdom of all participants—are smarter than any one individual. For proof, look no further than the sorry track record of professional money managers.
That’s why I think it’s worth paying attention to how the stock, bond and currency markets react to news.

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How have you decided when it’s worth it to fix an old car?

Forum by Rick Connor | May 23, 2025

My 2014 Honda Accord recently hit 99,000 miles. It’s nothing fancy to look at, but it drives well. Recently I’ve been having an issue with the starter. The push start works intermittently. Sometimes it starts on the first push, sometimes it takes multiple tries. I think the most it has taken is 6 tries.  I’ve kept up with the maintenance, but I drive it infrequently, so the time between service has spread out. It was due for an oil change,

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Gifting Confusion

Forum by Mark Ukleja | May 15, 2025

I thought the IRS gifting rules were pretty straight forward and I understood them.  Any individual can give $19K (in 2025) to anyone else w neither a gift tax or reporting requirement.  Seems pretty clear.
Then I dug a little deeper online which was maybe a mistake and came up w some issues.
One was the IRS reference to “gift splitting” by spouses where one spouse can use the other spouses gift exemption to gift in excess of the $19K. 

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Breaking even? Why should anyone care? I don’t

Forum by R Quinn | May 14, 2025

We have discussed many times when to start Social Security and pretty much concluded the decision is personal and need based. I don’t have a problem with any of that, but what bugs me is concern over breaking even considering amount received and years of benefits.
It seems to me the monthly benefit, the income when needed most is all that matters. Since I once again find myself in the minority, I asked a neutral party,

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The Wrong-Sided Man

Forum by Dennis Friedman | May 8, 2025

I usually go for my four-mile walk before sunrise. I like to get an early start to my day. I’ve gotten to know a few folks who I see on my way around the neighborhood. We exchange pleasantries as we pass each other.
But there’s one gentleman who is not so friendly. He looks like he’s in his early thirties—about forty years younger than me.
All the people I encounter walk on one side of the sidewalk,

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Ch-Ch-Changes?

Forum by Jonathan Clements | May 6, 2025

It’s been a topsy-turvy year in the financial markets. Has that prompted you to make any changes to your portfolio’s asset allocation? I’m thinking about four key dimensions:

Stocks vs. bonds vs. cash investments
U.S. stocks vs. foreign shares
Large-cap vs. small-cap stocks
Growth vs. value stocks

If you’ve tweaked your asset allocation, I’d love to know what changes you’ve made—and why.

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Have you planned survivor income for your spouse or someone dependent on you? RDQ

Forum by R Quinn | May 4, 2025

Throughout my working years, one thing that disturbed me greatly was the lack of concern even disregard shown by many workers for a spouse, especially a surviving spouse and nearly always a woman.
I remember the “good old days” when the husband’s earnings were his money, his pension was his pension. I remember when workers hid their overtime pay from the wife and when they elected a single life annuity pension because only they earned it,

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How Big Is Your Umbrella, Follow-Up

Forum by Philip Stein | May 1, 2025

I recently posted a request for comment about the appropriate amount of umbrella insurance one should have. I was hoping to learn of some formula or rule-of-thumb stating that “if your net worth is $X, you should carry $Y of umbrella coverage.” As far as I can tell, there is no such formula or rule.
Many thanks to those who responded.
Mark Eckman wrote that most insurance companies offer a maximum umbrella of $5 million.
Patrick Brennan’s insurance representative regarded $500,000 of liability coverage on his auto policy and a $1 million umbrella as sufficient for his needs.

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Kitces – Analyzing Congressional Republicans’ Budget Proposal For The 2025 TCJA Extension

Forum by William Perry | May 1, 2025

On April 30, Kitces posted an comprehensive article regarding the Tax Cuts and Jobs Act (TCJA) describing in detail where the congress is currently at and what steps are necessary to extend and/or change the the TCJA before the current tax law sunsets at the end of 2025.
https://www.kitces.com/blog/tax-cuts-and-jobs-act-tcja-sunset-budget-resolution-reconciliation-salt-cap-qbi-deduction-congress-republication-house-senate-bill/
I agree with the conclusion of the article to currently “wait and see” before taking action until I have a concrete expectation of what the individual income tax rules will look like in 2026.

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