Science? Yeah, Right

Jonathan Clements  |  September 30, 2017

I HEAR SO MANY compelling investment arguments. That U.S. stocks are destined to generate lackluster returns because valuations are so rich. That there’s no need to own foreign stocks because you get enough international exposure with U.S. multinationals. That interest rates have nowhere to go but up.
And yet U.S. stocks keep clocking gains, U.S. and foreign shares often generate radically different annual results, and interest rates show no signs of heading significantly higher.

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September’s Update

Jonathan Clements  |  September 28, 2017

NOTICE ANYTHING DIFFERENT? HumbleDollar’s home page has had a modest makeover. Along with the latest three blogs, our weekly action item and the daily insight that’s stripped across the top of the page, the home page now includes a preview of the most recent monthly newsletter and a look at one of the 500 or so sections that make up our comprehensive online money guide.
After the Equifax data breach, I posted a blog about protecting your financial life—and then followed it up by revamping the money guide’s sections devoted to identity theft and how to fend off the various risks involved.

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Unending Pain

Julian Block  |  September 27, 2017

SOME OF MY CLIENTS are political junkies; others don’t follow politics. Either way, they’re mostly aware that the Affordable Care Act, a.k.a. Obamacare, overhauled the rules for medical insurance. But lots of them are unaware that ACA’s overhaul also significantly changed some tax laws—and those changes adversely affected their pocketbooks.
I remind my clients that ACA included a provision that increased Medicare taxes for employees with high incomes. Similarly, it increased self-employment taxes for freelancers with high incomes.

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Driving Down Costs

Kristine Hayes  |  September 26, 2017

LIKE MOST PEOPLE, owning a car is my second largest monthly expense, right after housing. But unlike a lot of people, I also strive to be a super-saver, loosely defined as folks who max out their retirement accounts each year. That means I’m constantly looking for ways to cut my transportation costs.
Four years ago, when I found myself needing to buy a car, I settled on a gently used Honda CRV. Even though it was nearly six years old when I purchased it,

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Parting Thoughts

Jonathan Clements  |  September 23, 2017

“IT HAS LONG BEEN IMPORTANT to us to help our children and 12 adult grandchildren learn some of the fundamentals of saving and investing,” wrote Henry “Bud” Hebeler in a Feb. 26 email to me. “I sent them each a booklet that I wrote, illuminating the key elements that I have talked about in the past. To test their comprehension, I sent the following message.”
Bud died in August, nine days after his 84th birthday.

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Right but Wrong

Adam M. Grossman  |  September 22, 2017

I’M A BIG BELIEVER in transparency, so I’d like to tell you a little about my personal investments. As you might guess, the overwhelming majority of my money is allocated to simple, low-cost index funds—the same things I recommend in my writing and for my clients. That is true almost without exception. But today, I would like to describe one of those exceptions.
Many years ago, before I entered the investment industry, I purchased shares in a small mutual fund called the Mairs &

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Debt: 10 Questions to Ask

Jonathan Clements  |  September 21, 2017

GOT DEBT? To get a handle on the situation and figure out whether you’re handling your loans and credit cards properly, here are 10 questions to ask:

What’s your net worth? You might have a home and sizable financial accounts. But what are you worth once you subtract all your debts?
Are you taking the necessary steps to stop thieves from borrowing money using your identity? To protect yourself, regularly check your credit reports for errors and accounts you don’t recognize,

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Excuses, Excuses

Jonathan Clements  |  September 20, 2017

WE MAKE ALL KINDS of financial mistakes: spend too much, borrow too much, buy expensive investment products, try to beat the market. To be sure, there are some folks who simply don’t know better. But others give the issue serious thought—and still act foolishly, justifying their behavior with cockamamie arguments. Here are five such justifications that I’ve heard in recent months:
 1. “It’s okay to spend money if it cheers me up.” This is the crack cocaine school of budgeting.

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Moving On

Julian Block  |  September 19, 2017

WHEN TALKING WITH HOME SELLERS, I’ve long ceased being surprised by how many routinely overlook or fail to take maximum advantage of a valuable tax break: the exclusion when unloading their principal residence.
The exclusion—meaning you pay no taxes—is capped at $500,000 for married couples filing jointly and $250,000 for singles and married couples filing separate returns. I frequently need to remind sellers that these exclusions apply to profits, not sales prices.

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A Price on Your Head

Jonathan Clements  |  September 16, 2017

WE ARE WORTH SO MUCH MORE than the value of our homes and our financial accounts. But how much more? Forget your car and household possessions. Unless you have a Chagall hanging in the living room, it’s safe to assume all this stuff will depreciate and eventually be worth little or nothing.
Instead, our three assets with potentially significant value are our regular paycheck, our Social Security retirement benefit and any traditional employer pension we’re entitled to.

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Growing Up (Part V)

Adam M. Grossman  |  September 14, 2017

ONE OF MY FAVORITE ACTIVITIES as a child was to play with a tomahawk at my grandparents’ house. Yes, that was in the days before the Consumer Product Safety Commission. But in this case, it wouldn’t have made a difference: This particular tomahawk was no toy, but rather the real thing. It belonged to my grandfather. His name was Walking Buffalo, and he was a member of the Assiniboine, a Native American tribe who live on the Plains of Montana.

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Help Wanted

Nicholas Clements  |  September 13, 2017

IN THE EARLY YEARS of the landscape maintenance company that I owned with my twin brother, we would hire workers locally—both American and Latino. But each year, we struggled to find a sufficient number of willing and able workers.
It wasn’t until several years into running the company that I heard about the H-2B visa nonimmigrant program. The program allows companies to bring in foreign workers for as long as nine months. I saw this program as a way to provide our company with the workers we needed.

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Stop Thief

Jonathan Clements  |  September 12, 2017

THE EQUIFAX DATA BREACH seems to be a tipping point, unleashing a barrage of articles—and a boatload of angst—about the security of personal information. What are the potential problems and what’s the best way to defend yourself? I got some great ideas from followers of my Facebook page, where I posted a draft of this article and asked for feedback.
It seems there are five key scenarios where hackers could potentially wreak havoc with your financial life.

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Unheard Of

Jonathan Clements  |  September 9, 2017

TALKING TO A BROKER or insurance salesman? Here are 10 things you’ll likely never hear:

“Wow, your 401(k) has great low-cost institutional funds. There’s no way you should roll that money into an IRA.”
“Do you know that you could buy these funds outside a variable annuity and pay a fraction of the price?”
“Sure, you could make that trade—but probably the only person who will get richer is me.”
“My hunch is, this closed-end fund you’re buying will be at discount within a few months of the IPO.”
“Given the markup on that bond you just bought,

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Investment Taxes: 10 Questions to Ask

Jonathan Clements  |  September 7, 2017

WANT TO BOOST your after-tax wealth? Grab copies of your latest tax return and investment statements—and ask yourself these 10 questions:

What’s your marginal tax rate? That’s the tax rate on the last dollar of income you earn each year. It’s a crucial piece of information as you decide which retirement accounts to fund and how to invest your taxable account. You can get a quick estimate using Dinkytown’s calculator.
Do you expect your marginal tax rate to be higher or lower once you’re retired?

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