When we make financial choices, we usually have a pretty good idea what we’re getting. But what are we giving up?

All of the Above

A QUESTION FOR YOU—a trick one, I admit: Should you invest in technology stocks, such as Apple?
My answer: Yes, certainly.
Another question, also a trick one: Should you invest in the stocks of entertainment companies like Netflix?
My answer: Again, yes, of course.
A third question: Should you invest in energy companies, such as ExxonMobil?
My answer: Again, yes.
You might wonder why I’m asking these questions and why I’m answering “yes” to all of them.

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Piling On

FORGET XBOX and PlayStation. If you’re an investment nerd, nothing beats playing with a financial calculator, especially running scenarios that combine dollars, investment returns and great gobs of time. Here are six mathematical musings—not all of them happy:

Got a newborn daughter or granddaughter? If you invest $1,000 on her behalf and the money notches 6% a year, she’ll have almost $106,000 at age 80. That 6% is my assumption for long-run annual stock returns.

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Hot Topic

IT WAS 90 DEGREES—and we were the unfortunate owners of a broken, 18-year-old heat pump. After evaluating our system, one heating, ventilation and air conditioning (HVAC) contractor recommended replacement at a cost of $7,472.
Reluctant to spend that chunk of change, we opted for a second opinion. Company No. 2 spent an hour and a half at our house, changed out a capacitor, added refrigerant and treated the system with “stop-leak,” all for $837.99.

Read more »

Latest Blogs

All of the Above

A QUESTION FOR YOU—a trick one, I admit: Should you invest in technology stocks, such as Apple?
My answer: Yes, certainly.
Another question, also a trick one: Should you invest in the stocks of entertainment companies like Netflix?
My answer: Again, yes, of course.
A third question: Should you invest in energy companies, such as ExxonMobil?
My answer: Again, yes.
You might wonder why I’m asking these questions and why I’m answering “yes” to all of them.

Read more »

Piling On

FORGET XBOX and PlayStation. If you’re an investment nerd, nothing beats playing with a financial calculator, especially running scenarios that combine dollars, investment returns and great gobs of time. Here are six mathematical musings—not all of them happy:

Got a newborn daughter or granddaughter? If you invest $1,000 on her behalf and the money notches 6% a year, she’ll have almost $106,000 at age 80. That 6% is my assumption for long-run annual stock returns.

Read more »

Hot Topic

IT WAS 90 DEGREES—and we were the unfortunate owners of a broken, 18-year-old heat pump. After evaluating our system, one heating, ventilation and air conditioning (HVAC) contractor recommended replacement at a cost of $7,472.
Reluctant to spend that chunk of change, we opted for a second opinion. Company No. 2 spent an hour and a half at our house, changed out a capacitor, added refrigerant and treated the system with “stop-leak,” all for $837.99.

Read more »

Blog archive »

Numbers

FACED WITH A $400 unexpected expense, 59% of Americans say they could easily cover it, up from 50% five years ago, the Federal Reserve found. What about those who couldn’t? Typically, they’d carry a credit card balance or borrow from family or friends.

Act

TAKE STOCK OF YOUR BONDS. Our financial lives are chockful of bond lookalikes, including savings accounts, our regular paycheck, Social Security and any defined benefit pension—all paying us regular income, either now or in the future. Set against these income streams is a big income drain: our debts. Result: Our finances may be riskier or more conservative than our bond position alone suggests.

Think

REBALANCING. For major market segments—emerging markets, high-quality bonds, small-cap stocks and so on—we should have target portfolio percentages. Every so often, we should bring our portfolios back into line with these targets, preferably making any sales in a tax-deferred account. Rebalancing is mostly about controlling risk—but it can bolster returns.

Home Call to Action

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My One and Only

IS IT TIME TO STOP messing around with our portfolios—and go for radical simplicity? I’ve been asking myself that question in recent months, as I eye the growing list of funds that offer broadly diversified “one-stop shopping” portfolios built solely with low-cost index funds.
Take Vanguard Target Retirement 2050 Fund, which invests its assets in four Vanguard index funds and is geared toward those retiring in 2050 or thereabouts. The 2050 fund has a $1,000 investment minimum and charges just 0.15% a year,

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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.

Money Guide

Start Here

The Virtuous Cycle

LIFE IS CHEAPER WHEN YOU have some savings. How so? Think of all the extra costs you incur when your finances are tight—and how you can sidestep those costs as you build up your retirement and taxable accounts.

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Money Guide

Start Here

The Virtuous Cycle

LIFE IS CHEAPER WHEN YOU have some savings. How so? Think of all the extra costs you incur when your finances are tight—and how you can sidestep those costs as you build up your retirement and taxable accounts.

Read more »
Home Call to Action
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.

Free Newsletter

My One and Only

IS IT TIME TO STOP messing around with our portfolios—and go for radical simplicity? I’ve been asking myself that question in recent months, as I eye the growing list of funds that offer broadly diversified “one-stop shopping” portfolios built solely with low-cost index funds.
Take Vanguard Target Retirement 2050 Fund, which invests its assets in four Vanguard index funds and is geared toward those retiring in 2050 or thereabouts. The 2050 fund has a $1,000 investment minimum and charges just 0.15% a year,

Read More »