Losing Interest

Julian Block  |  October 24, 2017

SEVERAL OF MY CLIENTS took advantage of low interest rates earlier this year and refinanced their home mortgages for the second or third time. I alerted them to the tricky tax rules on deducting mortgage interest. Here’s the gist of what I told them.
Let’s say Amy Brown owns a personal residence. Her lender is willing to let her refinance for more than the balance on her existing mortgage. Under the tax rules, she’s allowed to deduct interest payments on the refinanced loan,

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Bought and Paid For

Jonathan Clements  |  October 21, 2017

STOCK BUYBACKS are here to stay. The Securities and Exchange Commission opened the door in 1982, when it ruled that companies could repurchase their own stock without triggering accusations of share price manipulation. Ever since, more and more companies have taken advantage. Indeed, in recent years, U.S. corporations have spent more money buying back their own shares than paying out dividends.
Good news? I see both plusses and minuses. Here are the plusses:

Once you figure in buybacks,

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We Know Jack

Jonathan Clements  |  October 20, 2017

THE BOGLEHEADS had their annual conference this week in the Philadelphia area, where Vanguard Group’s headquarters is located. Devotees of Vanguard’s 88-year-old founder John C. Bogle, the Bogleheads usually meet online at what’s probably the world’s best investment forum.
The star of their annual meeting was, of course, Jack himself. His latest book, an extensive revision of The Little Book of Common Sense Investing, just came out. What was on Jack’s mind?

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Repeat After Me

Jonathan Clements  |  October 19, 2017

IF YOUR INVESTMENTS CLIMB in value, hold the champagne—until you figure out whether it’s a onetime gain or a repeatable performance.
Suppose your foreign stocks post gains because the dollar weakens. Or your bonds climb because interest rates fall. Or stocks rise because price-earnings ratios head higher. Or corporate earnings increase because profit margins expand. Or stocks jump because the corporate tax rate or the capital-gains tax rate is cut.
Sound familiar? All of these things have either happened over the long haul or helped drive share prices higher this year. 

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Gold Dust

Anika Hedstrom  |  October 17, 2017

FOR THE FIRST TIME in my life, I’ve hired a housecleaner. It’s absolutely worth it—but embarrassing to admit, at least at first.
I’ve always been a neat freak, demanding clean, organized and tasteful living quarters, so I’ve spent a good portion of my life cleaning and organizing. A lot. I have even declined an invitation to go boating and hiking because I was color-coding my books.
Lame, I know.
After purchasing our home, I realized something had to give.

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Double Trouble

Jonathan Clements  |  October 14, 2017

PEOPLE OFTEN ACT FOOLISHLY and then desperately try to justify their financial sins. A case in point: Those who take on too much debt, can’t get it paid off by retirement—and end up servicing huge mortgages and other loans long after their paychecks have come to an end.
Cue the tap dancing. The indebted start waxing eloquent about the virtues of the mortgage-interest tax deduction and how it’s smart to pay the bank 4% while they invest the borrowed money at 10%.

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Where We Stand

Jonathan Clements  |  October 13, 2017

THE TYPICAL AMERICAN FAMILY is wealthier than three years ago. But there are also signs we’re playing faster and looser with our finances, with more folks taking on debt, abandoning homeownership and venturing into the stock market.
Those insights emerge from the Federal Reserve’s latest Survey of Consumer Finances. The survey is conducted every three years. Here are some results from the 2016 survey, which was just released:

The typical family’s net worth—meaning their assets minus their debts—stood at $97,300,

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Capital Punishment

Julian Block  |  October 12, 2017

MY CLIENT ROSTER includes investors who have suffered enormous losses on their stock market investments. To ease their discomfort, I steer the conversation to what they’re entitled to deduct for capital losses. While the IRS imposes strict limits on simply writing off such losses, I assure my clients that there are perfectly legal, IRS-blessed opportunities to sidestep these restrictions.
The big hurdle is a deduction cap of $3,000 for both married couples and single filers.

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Working the Plan

Zach Blattner  |  October 9, 2017

WORKPLACE RETIREMENT ACCOUNTS can be confusing and intimidating. Often, human resources departments serve as the contact point for employees, yet HR folks rarely know much about the nuances of a plan’s investment options—and, in any case, they aren’t legally allowed to offer advice.
Not sure how to handle your 401(k) or similar employer-sponsored plan? My first step was determining how much to contribute per pay period, so that I could hit the $18,000 annual limit.

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October’s Newsletter

Jonathan Clements  |  October 7, 2017

IT’S BEEN AN EXTRAORDINARY eight-year stock market run. Result: Many of us find ourselves far closer to our target retirement nest egg. Maybe we even have enough salted away to call it quits. Does that mean we should declare victory and cut back our portfolio’s risk level? I wrestle with that issue in October’s newsletter.

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Caitlin Roberson  |  October 5, 2017

WHEN MY SISTER GRADUATED from physicians’ assistant school earlier this year, I gave her a journal, the pretty, unmarked, paper-substantive kind that every female loves. Inside, I wrote five things that I wish I’d known, or am glad I knew, when I got my bachelor’s in 2006. Here was the first:
I’m gonna call it self-tithing. Ya know: Basically, what Mom and Dad taught us to give to the church, I’m telling you to give to yourself.

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Giving: 10 Questions to Ask

Jonathan Clements  |  October 4, 2017

HAVEN’T GIVEN MUCH THOUGHT to estate planning and charitable giving? Here are 10 questions to jumpstart your thinking:

Can you afford to give away money now? You shouldn’t gift large sums to your children or charity unless you’re confident you have enough for your own retirement. There’s no limit on gifts to charity, though your annual tax deduction may be capped. For gifts to family members, you might take advantage of the annual gift-tax exclusion,

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Hunting for Happiness

Nicholas Clements  |  October 3, 2017

I HAVE NEVER BEEN under the illusion that happiness was a simple matter of more money and more material goods. But I did question where happiness could be found.
When I was young, I saw poverty at its most extreme in newly formed Bangladesh, where my family lived for four years during the 1970s. People struggled each day to stay alive and were lucky to find food and shelter.
As an adult traveling through Mexico,

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Top 10 Blogs: Third Quarter

Jonathan Clements  |  October 2, 2017

OVER THE PAST THREE MONTHS, readers flocked to our series of blogs on 10 questions to ask. What else caught their eye? Many of the other top 10 blogs focused on investment issues, perhaps reflecting a summer of stock market nervousness, even as share prices edged higher.

Retirement: 10 Questions to Ask
Fooled You
Measure for Measure
Happiness: 10 Questions to Ask
Looking Bad
Protection Money
Safety Net: 10 Questions to Ask
Stocking Up
Savings: 10 Questions to Ask
Growing Up (Part II)

What have been the most popular blogs so far this year?

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Top 10 Blogs: 2017

Jonathan Clements  |  October 1, 2017

WHAT CATCHES READERS’ ATTENTION? I’m often surprised. Below are HumbleDollar’s 10 best read blogs through 2017’s first nine months:

Retirement: 10 Questions to Ask
Fooled You
Ten Commandments
Courtside Seat
Next to Nothing
The Good, the Bad and the Ugly
Nothing Better
Measure for Measure
Did I Say That?
Site Seeing (Part I)

Follow Jonathan on Twitter @ClementsMoney and on Facebook.

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