If your kids can borrow it or your friends can admire it, it doesn’t count as an investment.

This Week/Jan. 21-27

GET SPENDING MONEY OUT OF STOCKS. Calculate how much cash you’ll need from your portfolio over the next five years. That money should be out of stocks and invested in nothing more volatile than high-quality short-term bonds. You don’t want to be forced to sell stocks at depressed prices—and that could happen if your time horizon is less than five years.

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Money Guide

Everything you need to be smarter about money—all in one place.

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Moving in Together

IF YOU'RE IN A RELATIONSHIP and decide to move in together, you may want to take things slowly—at least when it comes to your finances. Rent a place you could afford on your own. That way, if the relationship doesn’t pan out, you won’t be saddled with a lease neither of you can afford. Divide up financial responsibilities. Before moving in together, decide how you’ll split the bills and who will be responsible for paying them. The more you discuss ahead of time, the less room there will be for misunderstanding. Don’t combine your finances unnecessarily. Initially, there’s no need to entwine your finances by, say, opening a joint checking account or buying a car together. There just isn’t much to be gained, except extra hassles if the relationship doesn’t work out. Gauge your partner’s financial habits. Money is one of the biggest sources of tension in relationships, so it’s important to get a handle on your partner’s money habits. Is he or she careful about spending? Is your partner an aggressive investor? What’s his or her attitude toward carrying credit card debt? If your partner isn’t careful about money, you will avoid financial headaches—and heated arguments—by keeping your finances separate. On the other hand, if it’s clear you are both financially prudent and you believe the relationship will last, you might start marrying your finances, even if you don’t envisage ever getting married. For instance, after a year or two, you might consider buying a home together and naming each other as beneficiaries of your retirement accounts and life insurance. Next: Getting Married Previous: Investing in Pricey Markets
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Latest Blog Posts

The Price Is Slight

I LOVE THE PRICE-CUTTING WAR among index-fund providers, because it puts pressure on all money managers to lower fees. But I don’t think investors should pay much heed to differences in annual expenses that amount to just 0.01% or 0.02% a year, equal to 1 or 2 cents for every $100 invested—and they certainly shouldn’t switch funds for those potential cost savings.
To check I wasn’t missing something, I set out to do apples-to-apples comparisons among index funds in four highly competitively segments of the indexing market: large-cap U.S.

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Perking Up

EACH SPRING, I WATCH a fresh crop of college graduates transition from the world of fulltime academics to the world of fulltime employment. Eager to begin “adulting,” many of them focus on the salaries offered by their employer-of-choice and give little consideration to the various benefits that supplement that salary.
That’s a mistake. As someone who’s been employed fulltime for the last 26 years, I’ve learned the importance of performing a cost-benefit analysis on the perks offered by various employers.

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About That 22%

THE STOCK MARKET HAD A GREAT 2017, gaining more than 20%. But was that kind of gain justified—or should it worry us, especially after the market had already tripled in recent years? I think it’s useful to understand the range of viewpoints, so we’re better prepared for 2018 and beyond. Here are the bull and bear cases:
Bull Case. As measured by the S&P 500 index, the U.S. market gained nearly 22% last year.

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Money Guide

Everything you need to be smarter about money—all in one place.

Start Here

Moving in Together

IF YOU'RE IN A RELATIONSHIP and decide to move in together, you may want to take things slowly—at least when it comes to your finances. Rent a place you could afford on your own. That way, if the relationship doesn’t pan out, you won’t be saddled with a lease neither of you can afford. Divide up financial responsibilities. Before moving in together, decide how you’ll split the bills and who will be responsible for paying them. The more you discuss ahead of time, the less room there will be for misunderstanding. Don’t combine your finances unnecessarily. Initially, there’s no need to entwine your finances by, say, opening a joint checking account or buying a car together. There just isn’t much to be gained, except extra hassles if the relationship doesn’t work out. Gauge your partner’s financial habits. Money is one of the biggest sources of tension in relationships, so it’s important to get a handle on your partner’s money habits. Is he or she careful about spending? Is your partner an aggressive investor? What’s his or her attitude toward carrying credit card debt? If your partner isn’t careful about money, you will avoid financial headaches—and heated arguments—by keeping your finances separate. On the other hand, if it’s clear you are both financially prudent and you believe the relationship will last, you might start marrying your finances, even if you don’t envisage ever getting married. For instance, after a year or two, you might consider buying a home together and naming each other as beneficiaries of your retirement accounts and life insurance. Next: Getting Married Previous: Investing in Pricey Markets
Read more »

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Short and Sweet

AS I WAS PREPARING for HumbleDollar’s January 2017 launch, my web developer suggested I add a mission statement to the top of the homepage. That mission statement morphed into a daily insight, which then became a daily Tweet that also found its way onto my Facebook page. Like the family that moves from a three-bedroom house to a one-bedroom apartment, I embraced the challenge of shoehorning financial ideas into 140 characters or less.
Twitter has since expanded the allowable character count to 280,

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Jonathan Clements

About Jonathan

Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His latest book: How to Think About Money.

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