Picking superior investments is a crowded trade. Saving more is an easy win.
INVESTIGATE A REVERSE MORTGAGE. Once retired, borrowing against your home’s value shouldn’t be a first choice, but a last resort. Still, it’s helpful—and comforting—to know what that last resort might be worth. To that end, try the calculator at ReverseMortgage.org. Pay attention not only to the money you’ll receive, but also to the hefty fees you will incur.
THE YEAR 2011 was horrifying. I learned my Mom had a life-threatening disease. She passed away six months later.
That forced me to confront the $88,000 of debt I had accumulated during college, including $51,000 in credit card debt. I was in grief, I had no idea what to do about the debt and my Mom wasn’t there to advise me.
My friend John told me to seek professional help. A debt settlement company helped me get rid of $16,000 of higher-interest credit card debt,
EVERYTHING I KNOW ABOUT PERSONAL FINANCE I learned in court. As part of my law practice, I represent individuals in estate, trust, and probate disputes. Many of these cases have common themes that teach important lessons about personal finance—lessons that aren’t covered in the usual commentary about saving for retirement, paying off credit card debt, and so on. In particular, six crucial lessons stand out.
Lesson No. 1: Know where your assets are.
THERE ARE CERTAIN HALLMARKS of financial rectitude: Never carrying a credit card balance. Maxing out the 401(k). Having an emergency fund. But do these habits deserve the sacrosanct status they’ve achieved?
You won’t find me arguing with paying off the credit cards each month or putting at least enough in a 401(k) plan to earn the full matching employer contribution. Both make ample sense. But in the past, I’ve raised questions about how much emergency money people need and how they should handle this money.
IMAGINE AN IDEALIZED CHART that summarizes our finances over the course of our lives. What would the chart look like? Picture these five lines:
Our nest egg grows, slowly at first and then ever faster, hitting a peak of around 12 times our final salary when we retire.
Our portfolio in our 20s stands at perhaps 90% or even 100% stocks. We dial down our allocation in the years that follow, especially during our final decade in the workforce,
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.