In the theatre of the absurd, self-righteous insurance agents deserve starring roles.

This Week/Feb. 11-17

AUTOMATE YOUR BILL PAYING. That way, you’ll avoid late payments—crucial to maintaining a good credit score. The downside: You need to be vigilant about keeping enough in your bank account, so you don’t trigger fees for overdrafts or insufficient funds. This is a particular concern with credit card bills, which can vary so much from one month to the next.

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Money Guide

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

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Bitcoin

BITCOIN EXPLODED IN POPULARITY in 2017, soaring from less than $1,000 in January to more than $19,000 in December, before backing off from those dizzying heights and ending the year just above $14,000. Prices fell even further in early 2018. Bitcoin may be intended as a new currency, but it also has similarities to an alternative investment—and perhaps the closest parallel is gold. Neither bitcoin nor physical gold have any intrinsic value: They don’t pay interest like a bond and they don’t generate earnings and dividends like a stock. Instead, the value ascribed to both bitcoin and gold is born mostly of faith and trust. True, gold has some limited use—mostly for jewelry—and historically it has been recognized as a store of value by some governments, while bitcoin can make neither claim. Still, like gold, bitcoin has a value largely because owners trust that the supply is limited and because they have faith that others will also view it as valuable. In some ways, bitcoin is superior to gold. While both are recognized as a medium of exchange not controlled by any national government, bitcoin should be cheaper to buy, hold and sell. You don’t have all the costs associated with trading and storing gold. In recent years, bitcoin has been subject to large speculative swings in value. But assuming the market for bitcoin isn’t discredited or replaced by some other virtual currency, all you can expect from bitcoin over the long run is a return equal to the global inflation rate—which is exactly what you can expect from gold. As such, while you might be able to make a short-term speculative gain, it’s unlikely to be a great long-run investment. What if you do make large gains? There’s good news: The IRS has said that profits earned by bitcoin owners will be subject to capital gains taxes, not income taxes. The regulations governing bitcoin remain in flux, but things are becoming clearer. In January 2015, Coinbase.com opened the first U.S.-based bitcoin exchange. In May 2015, itBit.com launched a bank trust company subject to supervision by the New York State Department of Financial Services, and Gemini.com followed in October. Next: Real Estate Investment Trusts Previous: Gold
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Latest Blog Posts

Tales to Be Told

IF THIS TURNS OUT TO BE a major bear market, there will be a slew of articles to be written. It’s the negative correlation enjoyed by every financial writer: Even as our portfolios shrink, our potential for pontification soars.
But what if the market bounces back? It’s almost too painful to contemplate. Think of all the articles that won’t get written. If the past week’s rally continues, here are 10 stories that will have to wait for the next market downturn:
1.

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Wheeling and Dealing

CAR BUYING CAN BE OVERWHELMING, which partly explains why we held onto our 2002 Toyota RAV for as long as we did. When the time came to part ways, we needed to decide whether the replacement would be new or used, how much we were prepared to pay, the features we wanted and what vehicle would meet all our criteria.
These were relatively easy tasks. While I realized that purchasing a used vehicle made more sense financially,

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Check Him Out

AS AN ATTORNEY AND AUTHOR WHO HAS WRITTEN and lectured extensively on the tax aspects of marriage and divorce, I frequently receive questions from couples contemplating marriage. Generally, they come from similar backgrounds: They’re both affluent. They’re both getting married later in life. They’re both aware of trends in divorce rates.
I urge couples considering marriage to ponder the tax consequences beforehand, especially when one or both of them are remarrying.

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Money Guide

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

Start Here

Bitcoin

BITCOIN EXPLODED IN POPULARITY in 2017, soaring from less than $1,000 in January to more than $19,000 in December, before backing off from those dizzying heights and ending the year just above $14,000. Prices fell even further in early 2018. Bitcoin may be intended as a new currency, but it also has similarities to an alternative investment—and perhaps the closest parallel is gold. Neither bitcoin nor physical gold have any intrinsic value: They don’t pay interest like a bond and they don’t generate earnings and dividends like a stock. Instead, the value ascribed to both bitcoin and gold is born mostly of faith and trust. True, gold has some limited use—mostly for jewelry—and historically it has been recognized as a store of value by some governments, while bitcoin can make neither claim. Still, like gold, bitcoin has a value largely because owners trust that the supply is limited and because they have faith that others will also view it as valuable. In some ways, bitcoin is superior to gold. While both are recognized as a medium of exchange not controlled by any national government, bitcoin should be cheaper to buy, hold and sell. You don’t have all the costs associated with trading and storing gold. In recent years, bitcoin has been subject to large speculative swings in value. But assuming the market for bitcoin isn’t discredited or replaced by some other virtual currency, all you can expect from bitcoin over the long run is a return equal to the global inflation rate—which is exactly what you can expect from gold. As such, while you might be able to make a short-term speculative gain, it’s unlikely to be a great long-run investment. What if you do make large gains? There’s good news: The IRS has said that profits earned by bitcoin owners will be subject to capital gains taxes, not income taxes. The regulations governing bitcoin remain in flux, but things are becoming clearer. In January 2015, Coinbase.com opened the first U.S.-based bitcoin exchange. In May 2015, itBit.com launched a bank trust company subject to supervision by the New York State Department of Financial Services, and Gemini.com followed in October. Next: Real Estate Investment Trusts Previous: Gold
Read more »

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Think of the Children

I FEAR I AM GROWING WEALTHY at my children’s expense. My investing life began in the late 1980s. Yes, there have been stock market bumps since then, notably the 2000-02 and 2007-09 market crashes, and even a minor hiccup over the past week. But if you look at the broad trend, it’s been three decades of rising stock market valuations.
From year-end 1987 to year-end 2017, the S&P 500’s price-earnings multiple climbed from 13.8 to 24.6,

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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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