The Price Is Slight

Jonathan Clements  |  January 20, 2018

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

Kristine Hayes  |  January 18, 2018

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%

Adam M. Grossman  |  January 17, 2018

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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Phil Dawson  |  January 16, 2018

MY FIRST ENCOUNTER WITH DAVE RAMSEY was in 2010, when I stumbled across a radio broadcast featuring one of his recorded presentations. His style was funny and engaging, and I thought he might be helpful in teaching my kids about money.
I bought each of them his book The Total Money Makeover and gave them reading assignments, which were followed by group discussions in the weeks that followed. Later, I also attended his local Financial Peace University (FPU) classes with daughter Karah.

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Price vs. Value

Jonathan Clements  |  January 13, 2018

WE CAN THINK OF INVESTING as an argument between two competing opinions: What we think an investment ought to be worth—and what the market currently says. It’s an argument the market usually wins.
While we can be highly confident what, say, a certificate of deposit or a Treasury note is worth, it’s much harder to put a value on stocks, gold, high-yield junk bonds and other riskier investments (and, I’d argue, all but impossible with bitcoin).

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More for Your Money

Adam M. Grossman  |  January 11, 2018

AT SEVEN O’CLOCK THIS MORNING, as my wife and I tried in vain to wake our children for school, we heard a similar response as we went from room to room: “My head hurts.” Nobody wanted to get up.
I have to say, I don’t blame them. It’s the middle of winter here in Boston. The sky is gray and the thermometer seems stuck below zero. It can be hard for anyone to feel motivated,

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Lost Items

Julian Block  |  January 9, 2018

JUST BEFORE SANTA ARRIVED in 2017, President Trump signed legislation officially titled the Tax Cuts and Jobs Act, which was described by both supporters and opponents as the most comprehensive overhaul of the Internal Revenue Code since the Tax Reform Act of 1986.
The many new rules that are now on the books are mostly prospective, meaning they apply to returns to be filed for calendar years 2018 through 2025. They aren’t retroactive to calendar year 2017.

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January’s Newsletter

Jonathan Clements  |  January 6, 2018

WE’RE AN IMPATIENT LOT—and increasingly so. Who has time to read long articles, let alone entire books? Much of the time, all we want is the one- or two-line summary. Faced with that challenge, I’ve taken to boiling down my financial ideas to 140 characters or less.
HumbleDollar’s latest newsletter includes 41 of those ideas, which I hope will inspire, amuse and guide you as we sally forth into 2018. January’s newsletter also offers three financial steps to take in response to the new tax law,

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Making Your Case

Phil Dawson  |  January 3, 2018

MRS. J. LIVED IN SOUTHEAST VIRGINIA and had purchased an eight-year-old truck at auction for her college-bound child. It turns out that the truck had spent its entire life in and around Rochester, New York, in the heart of the Rust Belt. Mrs. J. had been advised by her local garage that many of the exposed chassis components on her truck were covered in rust. Her neighbors’ cars did not exhibit this condition. She felt the truck was unsafe and that the vehicle’s manufacturer—my employer—owed her a solution.

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Hitting Refresh

Jonathan Clements  |  January 1, 2018

WHERE DO WE STAND? That question is tackled at the beginning of almost every chapter of HumbleDollar’s online money guide—and I spent much of the past week updating the various statistics involved.
Check out the latest numbers from the worlds of borrowing, real estate and investing, including stock and bond market valuations. I’ve also updated the money guide’s sections on taxes and giving—the latter covers estate planning and charitable gifts—to reflect the new tax law.

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Top 10 Blogs: Fourth Quarter

Jonathan Clements  |  December 31, 2017

AS WE LOOK FORWARD to the year ahead, here’s a chance to look back. Below are HumbleDollar’s 10 most popular blogs from the past three months:

Number One Number
We Know Jack
Ten Financial Principles
All the Right Reasons
Worse Than Marxism?
Three Keys to Happiness
Giving: 10 Questions to Ask
Money Well-Wasted
Life After Amazon
Courtside Seat (Part II)

The above list includes four blogs written by other contributors, which I’m thrilled about.

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Best Investment 2018

Jonathan Clements  |  December 30, 2017

THE ABOVE HEADLINE OVERPROMISES, I readily admit. Still, three considerations—taxes, risk and the economic cycle—point to one conclusion: Paying down debt in 2018 looks like an awfully smart move.
Debtors’ prison. Ridding yourself of debt, even mortgage debt, has long been a savvy alternative to buying bonds and certificates of deposit. But thanks to the new tax law, it looks especially savvy right now—and especially if you’re married.
How come? The new tax law took away personal exemptions but compensated by roughly doubling the size of the standard deduction.

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Top 10 Blogs: 2017

Jonathan Clements  |  December 29, 2017

WE’RE READY TO DON our birthday hats here at HumbleDollar, as we close out our first year. What caught your attention over the past 12 months? Here are the 10 most popular blogs from 2017:

Retirement: 10 Questions to Ask
Fooled You
Ten Commandments
Courtside Seat
Next to Nothing
The Good, the Bad and the Ugly
Measure for Measure
Nothing Better
Number One Number
We Know Jack

Meanwhile, the year’s most popular newsletters—based on online views—were October’s Enough Already and December’s Timely Tale.

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Aiming High

Kristine Hayes  |  December 28, 2017

BACK IN 2013, I was recently divorced, living on my own for the first time and utterly naïve about investing. I was in my late 40s, I’d lost half of my small state pension in the divorce and I was afraid I’d be working well into my 70s if I didn’t get my financial life on track.
I set the ambitious goal of having a net worth of $500,000 by 2022, when I’ll turn 55.

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First Things First

Adam M. Grossman  |  December 26, 2017

IN A CLASSIC EPISODE of the sitcom 30 Rock, Tina Fey’s character, Liz Lemon, muses about the size of her nest egg: “I have money saved. Two years. Maybe four, if I cancel cable.”
Not worried about the size of your cable bill? In all likelihood, you’re fretting about one aspect of your financial life—and probably more than one. You might be wrestling with housing costs, student loans, the cost of putting your own children through school,

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