Choosing Badly

Richard Quinn  |  April 24, 2018

TIME VALUE of money, asset class, diversification, dollar-cost averaging: This is the language of investment professionals. But it isn’t the language of everyday Americans, including those saving for retirement in their employer’s 401(k) plan.
Trust me, I know. During my nearly 30 years overseeing 401(k) plans, including providing financial education to participants, it became clear to me that using such plans as intended wasn’t easy for most people.
For diversification, employees would often invest in several different mutual funds all focused on a similar collection of U.S.

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Exposing Yourself

Jonathan Clements  |  April 21, 2018

PUT YOURSELF in their shoes. I’ve been doing that in recent weeks, thinking about how I’d design a portfolio if I lived in, say, Australia, Japan or the United Kingdom. What prompted this navel-gazing? I’m in the middle of revising my 2016 book, How to Think About Money, for an international audience.
One conclusion: Here in the U.S., we have it far easier than foreign investors—and a big reason is currency exposure.

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Protect Your Privacy

Adam M. Grossman  |  April 20, 2018

ERIC SCHMIDT SAID THIS when he was Google’s chief executive: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”
In his Congressional testimony last week, Facebook chief executive Mark Zuckerberg didn’t say anything nearly as condescending or abrasive. But his testimony was a good reminder that we’re in a very different world privacy-wise than we were even 10 years ago,

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Teachable Moment

Andrew Rombach  |  April 19, 2018

FOR THREE-QUARTERS of students, loans have become a standard part of the college experience. Scholarships, grants and parental funding may be preferable. But the reality is, many families will need student loans to pay college expenses.
Navigating this world can be baffling. There are many different kinds of loans and repayment programs, and choosing the right option is important. After all, you’ll be living with your choices for 10 years or more.
Federal student loans are backed by the federal government and offered through the Department of Education.

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Living Larger

Jonathan Clements  |  April 18, 2018

NOTICE ANYTHING different? This week, we’re rolling out an expanded homepage for HumbleDollar. Our three latest blogs are now stripped across the top of the desktop version’s homepage. If you’re viewing the site on a mobile device, you’ll see the blogs stacked one on top of the other.
But the big changes are just below. We’ve scrapped the old “This Week” feature and replaced it with “Act.” Twice a week, we’ll suggest steps you might take to improve your finances.

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Fueling the Fire

Kristine Hayes  |  April 17, 2018

I’VE BEEN EMPLOYED on at least a part-time basis since I was 17 years old. For almost three decades now, I’ve been working fulltime. It’s probably not surprising that, at almost 51 years old, I’ve reached the point where I spend considerable energy contemplating a life beyond work.
The idea of achieving financial independence and retiring early—captured by the acronym FIRE, short for financial independence/retire early—is never far from my thoughts. As a born planner,

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Saving Is Sexy

Jonathan Clements  |  April 14, 2018

WE DON’T PROMISE thinner thighs and harder abs here at HumbleDollar. But—unbeknownst to us—we could be the secret to your relationship success.
This revelation comes from an academic paper, “A Penny Saved Is a Partner Earned: The Romantic Appeal of Savers,” by Prof. Jenny G. Olson and Prof. Scott I. Rick, which is based on Olson’s dissertation research.
Conventional wisdom—and earlier academic work—suggest that, if men flaunt their wealth, they’re likely to have greater dating success.

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Fancy Your Chances?

Adam M. Grossman  |  April 12, 2018

ANYONE WHO FOLLOWS my work knows I am a staunch advocate of index funds and believe that stock-picking is a difficult road. That said, there are three undeniable facts about picking stocks:

All of the great fortunes—Rockefeller, Carnegie, Gates, Buffett—were built by owning one stock: a very good one but, nonetheless, just one.
There are rare investors who are able to outperform the market averages by picking the right stocks. It’s hard, but it can be done.

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An Ode to Owing

Julian Block  |  April 11, 2018

A MEDIA-SAVVY IRS OFTEN ANNOUNCES that one of its top priorities is combatting criminals who steal tax-related information. The good news: Reports of tax identity theft have declined markedly in recent years. The bad news: Resourceful identity thieves remain active and constantly introduce new schemes.
One consistently remunerative ploy is to use stolen Social Security numbers and other information to file fraudulent tax returns that claim hefty refunds—claims that generally are submitted at the start of the filing season.

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Cracking the Wallet

Jonathan Clements  |  April 10, 2018

MOST AMERICANS AREN’T SAVING nearly enough. Last year, we collectively salted away just 3.4% of our after-tax disposable personal income. That’s a far cry from the 9% or more that Americans socked away every year between 1950 and 1984. Since those heady days, our ability to delay gratification has all but disappeared, with the savings rate averaging just 4.8% since 1998.
But HumbleDollar isn’t read by the typical American. This is the place folks end up after they’ve tried dating stocks,

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Plan, Prioritize, Proceed

Adam M. Grossman  |  April 9, 2018

IS FINANCIAL PLANNING a product or a process? In other words, is a financial plan a document that you can print, bind and put on your shelf—or is it an ongoing activity? This is something of a religious debate within the finance community.
Supporters of the “it’s a product” view are usually dyed-in-the-wool financial planners. Not surprisingly, they believe that financial planning should result in a physical plan—an exhaustive, detailed document that’s full of analysis and projections.

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Carrots and Sticks

Jonathan Clements  |  April 7, 2018

FINANCIAL FREEDOM is the ability to spend our days doing what we love—and, with any luck, it will come with age. As we amass more wealth, we should become less motivated by fears of layoffs and hopes of bigger paychecks. Instead, our motivation should come from within, because we are increasingly free to focus on the things we’re passionate about. This, I believe, is one of the three pillars of a happy financial life: We have fewer money worries,

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longevity.Stanford.edu

Kristine Hayes  |  April 5, 2018

AS A FORMER JOURNALISM MAJOR, I’m a sucker for a good headline. I understand how difficult it is to grab a reader’s attention in ten words or less. So, when I came across a headline proclaiming that a group of Stanford researchers had determined the “best” retirement strategy, I admit I was intrigued. I clicked on a link to the study—and found not only a useful retirement planning system, but also a portal into the Stanford Center on Longevity.

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Getting Used

Joel M. Schofer  |  April 4, 2018

OKINAWA IS A JAPANESE ISLAND that is southeast of mainland Japan and about two hours and 40 minutes from Tokyo by plane. It is famous for fierce Second World War battles and currently houses about 26,000 U.S. military personnel. From 2006 to 2008, I was one of these military personnel, working as an emergency physician in the naval hospital.
Okinawa, my new dream come true. Going to Okinawa was not my first choice.

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Free Lunch

Adam M. Grossman  |  April 3, 2018

PERHAPS YOU’VE HEARD the expression, “there’s no free lunch.” The idea is, you usually don’t receive something for nothing. Whether it’s with money or with time and labor, you almost always “pay” one way or another.
It’s an interesting concept—but whoever coined the phrase clearly never looked at the U.S. tax code, which is full of free lunches. Today, we’ll discuss one example, which may be of interest to the charitably inclined.
One of the most talked about changes in the new tax law is a provision that alters how deductions are treated.

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