ADAM RORABAUGH LEFT THE SHORES of his German homeland at age 36, together with his wife Maria and five children, and landed in America in 1831. Two brothers also accompanied him on a stormy, 77-day sailboat voyage across the Atlantic. Driven off course during the trip, they landed at Havre de Grace, Maryland, in the Chesapeake Bay. After making their way to New York City, it is presumed the three brothers parted, never to meet or hear from each other again.
WHILE SITTING AT MY DESK a few months ago, I received a text message from Citibank notifying me of “suspicious activity” on my primary credit card. I immediately logged onto my account and discovered someone that morning had attempted to use my credit card number at a luxury resort—one located several hundred miles from where I work. The charge had been denied, but the damage was done. I immediately cancelled the card. I also began notifying the companies I have automated payments with,
WHAT’S A GOOD REASON to dial down your stock market exposure? A year after Donald Trump was elected president, many folks are still smarting from their decision to bail out of stocks. Clearly, we shouldn’t lighten up on shares just because we don’t like the guy in the White House.
We also shouldn’t bail out just because stocks sport high price-earnings ratios and skimpy dividend yields. No doubt about it, stocks today are expensive.
I RECEIVE MANY QUERIES about taxes. Most of the questions people send are pretty much the same: They want my advice on how to lose less to the IRS.
Most of the answers I send back are pretty much the same: I advise them to plan ahead and stay on top of tax-law changes, especially whether they will be hurt or helped by the Republicans’ proposals for the most sweeping revisions in more than 30 years.
I RECENTLY LEARNED a new expression, TL;DR, which stands for “too long; didn’t read.” Twitter users and bloggers use it when they want to summarize an idea for readers who are short on time. It’s the modern equivalent of saying, “Here’s the executive summary.”
Coincidentally, this week, two people separately asked me what I see as the most important principles in personal finance. In other words, they wanted the TL;DR version, without too much commentary.
I BOUGHT MY HOUSE in Silicon Valley by launching a Kickstarter campaign. Together, the team blew past our target and disrupted an entire industry—all while driving for Lyft (not Uber) and Airbnb-ing our couches, of course.
First, what is a house in Silicon Valley? In the lauded land of garages-turned-unicorns, owning a house means any number of things: A wall, if one’s lucky. A floor. Perhaps a couch.
Not so for the wise who live elsewhere—like my Phoenix-based high school best friend.
IF THERE’S ONE NUMBER that drives our financial lives, it’s our fixed living costs. We’re talking here about regularly recurring expenses that are pretty much unavoidable, such as mortgage or rent, car payments, property taxes, utilities, insurance premiums and groceries.
Why are fixed living costs so important? There are five reasons. First, the lower our fixed living costs, the easier it is to save. I believe many Americans would love to save more, but simply can’t,
IN NOVEMBER 2015, I got a notice from Amazon advising me that its security had been breached by some clever hacker and that my password may have been compromised. I was locked out of my account and instructed to set a new password.
In typical mindless fashion, I immediately set out to do just that. But then my inner contrarian stepped up and shouted some questions. I love this guy, even though most everyone around me thinks he’s a truculent moron.
HAVING RECENTLY LOST SEVERAL PEOPLE, I was in a bit of a daze. Grief stopped me from doing some of the things that brought me incredible joy, like downhill skiing and whitewater kayaking.
Being the Swede I am, I fell in love with Sheila—my gently used Volvo AWD V60 sedan. My attraction to Volvos included family nostalgia, safety and longevity. The dealer was a friend of my aunt, so I was able to negotiate a very reasonable price,
IF THE KEY TO SMART money management was financial education, we’d all be voracious savers and rational, tenacious long-term investors. The reality: We are neck-deep in articles and books devoted to personal finance—I have been a generous contributor to the flood—and yet there’s scant evidence we’ve become any more financially responsible.
In short, the problem isn’t education. Rather, it’s getting ourselves to act. That’s the topic I tackle in November’s newsletter. My firm belief: In the years ahead,
MOST MONEY CONVERSATIONS, especially with financial advisors, orbit around the concept of increasing dollars.
When is it best to buy stocks? Answer: in a down economy. Reallocate money from bonds.
When is it best to buy bonds? Answer: in a thriving economy. Reallocate money from stocks.
When is it best to save? The answer invariably seems to be: always.
On the one hand, I embrace this concept.
MANY OF MY CLIENTS make donations to their favorite philanthropies in the final months of each year. With lower tax rates in the offing, this could be a good year to make such gifts—especially for those who have appreciated property to donate.
Many clients reflexively write checks, as that’s the easiest way to qualify their gifts for charitable deductions. But before they reach for their checkbooks, donors who want to make major gifts—and also lose less to the IRS—will do themselves a favor if they first familiarize themselves with other often-overlooked ways to contribute.
I JUST INVESTED $1,000 on behalf of a grandchild who may never be born. This reflected two of my enduring preoccupations: figuring out the best way to use my limited wealth for my family’s benefit—and getting an early start, with an eye to squeezing maximum advantage from investment compounding.
To those ends, when I visited my daughter in Philadelphia last weekend, I helped her open a 529 college savings plan. Hannah humored her father by committing to invest $25 automatically every month.
OCTOBER IS USUALLY a busy month, as I update HumbleDollar’s money guide with the tax thresholds for the coming year. But with a major rewriting of the tax code under way in Washington, DC, many of the 2018 figures that were just released by the IRS will likely never go into effect.
For instance, the standard 401(k) contribution limit is slated to rise from $18,000 in 2017 to $18,500 in 2018—but there’s talk on Capitol Hill of limiting tax-deductible contributions to $2,400.
A FRIEND RECENTLY ASKED ME the interest rate on my credit card. I admitted I had no idea. I pay off the balance in full every month and therefore don’t know, or care about, the interest rate.
I’m a minority in this regard. Only 35% of us pay off our credit card balance each month. We’re dismissed as “deadbeats” by profit-hungry credit card companies, perhaps with some justification: We reap the benefits of credit card rewards programs designed to lure the other 65% of the population into using their cards on a regular basis—and then foolishly carrying a balance.