I AM AMAZED OUR schools don’t require kids to learn three important life skills: the basics of nutrition, a thing or two about parenting, and how to handle money. I’m no expert on nutrition and my parenting is a work in progress. But I do have a background in personal finance: When folks ask me what to read to deepen their financial knowledge, I have a ready list of titles.
Recently, however, someone asked me for a more advanced list—a “201”
OTHERS MIGHT BE hoping to add to their wealth by picking the next hot stock. But here at HumbleDollar, we’re much more concerned about subtraction.
The goal: Keep more of whatever the financial markets deliver by minimizing investment costs and avoiding unnecessarily large tax bills. This is a reason to favor index funds. But even if we index, we need to be alert to another threat—that posed by the person in the mirror.
ON SEPT. 11, 2001, I spent an hour and a half standing on a crowded subway train two blocks from the World Trade Center. During that time, both towers collapsed. No smoke came shooting down the subway tunnel. The earth didn’t noticeably shake. There were no deafening noises. Instead, we were just another subway car packed with disgruntled passengers, muttering about the perils of public transport.
It was only when the train backed up to Penn Station in midtown Manhattan that we learned what had happened that day.
LAST MONTH WAS OUR best ever for pageviews—perhaps not surprising given the site’s expansion. HumbleDollar continues to run longer articles every day. But since late July, we’ve also been publishing shorter blog posts each morning and afternoon. What’s been catching readers’ attention? Among the longer articles, here are August’s seven most popular:
“Hooking up a railcar in subzero temperatures isn’t something I’ll be doing if I can supplement my savings with Social Security,”
THERE’S NOTHING that deters financial planning like a scarily large price tag.
We should ask ourselves all kinds of tough financial questions. But many of the toughest never get asked—because we know answering them will involve agonizing choices, difficult conversations and unthinkable amounts of dollars. Consider these four:
1. How would you cope if you were out of work for six months? As I’ve noted in earlier articles, the big financial emergency isn’t replacing the roof or the air-conditioning system,
I TURN AGE 58 today—and, a few days ago, HumbleDollar turned four. The good news: Only one of us is slowing down.
In 2020, HumbleDollar garnered 3.6 million pageviews, up from 2.6 million in 2019, 1.7 million in 2018 and 900,000 in 2017, which was our first year. Here’s a closer look at those numbers and what’s been happening here at HumbleDollar:
Earlier this week, I posted a list of the 20 most widely read articles from the past four years.
I AM THE FIRST to admit that I’m no star when it comes to math. I was so enthralled with calculus in college that I took it twice. To make matters worse, math keeps changing. Just ask a 10-year-old to show you how to multiply.
I am not alone. At the high school from which I graduated in 1961, the current math proficiency rate is 2% The national average is 46%. The lowest ranked state is at 22%.
BACK IN AUGUST, Adam Grossman wrote a thought-provoking article about regret. He offered six strategies to minimize the chances you’ll end up kicking yourself for a choice you made. That got me thinking about the financial decision I most regret.
I bought a timeshare.
I know this admission will generate strong reactions in the personal finance community. I’d like to claim the ignorance of youth, but I was in my early 50s. I’d like to blame my wife,
AFTER YEARS of handwringing, you finally concede that it’s all but impossible to beat the market over the long haul, so you shift your portfolio into index funds. Next up: the truly tough decisions.
Almost every writer for—and reader of—HumbleDollar is a fan of indexing, and there’s no doubt that index funds are a wonderful financial tool. But how will you use that tool? Let the bickering begin.
The differences of opinion show up among the articles we run on HumbleDollar.
MICHAEL BURRY waited years to be rewarded for his bet against subprime mortgages. Actor Christian Bale, in the movie version of Michael Lewis’s book, The Big Short, portrays Burry curled up in the fetal position on the floor of his office. When the financial crisis finally hit in 2008, he made $100 million.
I’m no Michael Burry and the chance I’ll ever see $100 million is about 100 million to one.
INDEX DESIGNERS FTSE Russell and MSCI are jumping on China’s A train this year—and index-fund investors should watch out. There’s a $6 trillion wild-and-woolly domestic Chinese stock market slowly chugging your way, whether you like it or not. Yes, it may bring riches—and it’ll definitely bring huge risks.
In fact, your emerging markets index fund may already have 34% in Chinese stocks, and it could exceed 50% in years to come. Sound unnerving? For those with a position in an emerging markets index fund—or are considering one—good alternatives are hard to come by.
IN MY ROLE AS a financial planner, I hear a lot of stories. By far the most appalling and upsetting relate to life insurance. All too often, insurance salespeople leave clients with policies that are simultaneously overpriced, inadequate and inappropriate.
Are you evaluating a policy? Here’s a quick summary of the most important considerations:
What type of coverage should I have? Life insurance comes in two primary flavors: term and permanent. Term insurance,
I HAVE A RELATIVE—let’s call her Jane. Last year, in the early days of the pandemic, Jane had the foresight to buy shares in vaccine maker Moderna. With the benefit of hindsight, it was a smart decision.
But it wasn’t a difficult one, in Jane’s view. It was no secret that the company was working on a COVID-19 vaccine. It was also clear that vaccines would be in high demand. That made the investment case clear.
THE MUCH-DEBATED 4% rule—which I wrote about back in July—is a popular way to think about portfolio withdrawals in retirement. But it isn’t the only way. Another approach, called the bucket system, is also worth understanding. Below is some background.
What is the bucket system? As its name suggests, an investor divides his or her portfolio into multiple containers. Each container, or bucket, is then assigned a different role.
The most popular implementation of the bucket system involves three containers: The first is earmarked for a year or two of spending and is held entirely in cash.
A WHILE BACK, I assembled two personal finance reading lists—what I called 101 and 201 level titles. But time doesn’t stand still. Below is a list of newer books, along with a few classics that didn’t fit on the earlier lists. They’re organized into three categories: retirement planning, investing and behavioral finance.
Can I Retire? by Mike Piper. There’s no shortage of retirement books. But if you want a straightforward guide that covers the most critical topics in an easy-to-read format,