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Saving

A Very Humble Saving

Mark Crothers | Oct 1, 2026

"I was going to reply with a pun-heavy message, but I thought I'd better quit while I was only slightly behind 😁"

- Mark Crothers

Investing

Financial Lessons

ArticleAdam M. Grossman | Sep 26, 2026

WHAT'S THE MOST important idea in personal finance? It’s hard to single out just one, but over the years, I’ve found the following dozen ideas to be among the most useful.

Whether it’s on TV or online, there’s never any shortage of market prognosticators. Especially during a bull market, everyone seems to have an opinion on where things are headed. The reality, though, is that people can only guess about how the economy, the market or any individual investment will perform. Convincing as they might sound, no one has a crystal ball. That’s why, when it comes to investing, I suggest taking an evidence-based approach, one that relies as much as possible on data and research rather than on the simple stories, anecdotes and sayings that are so prevalent among market commentators.
What does the data tell us? Among the most significant research in recent years is the work of Hendrik Bessembinder. In looking at the historical returns of stocks, he found that just a tiny fraction—only 4%—have accounted for the vast majority of the market’s gains over and above what Treasury bills paid, and the median stock actually delivered a negative return. This is one of the key reasons I recommend index funds rather than picking individual stocks or investing in an actively-managed fund. Identifying that 4% is almost impossibly difficult. But if you invest in a broad-based index fund, you’ll have a high likelihood of owning the next Apple or Nvidia.
Be careful not to miss the forest for the trees. The most important driver of investment risk and return for most people, most of the time, is asset allocation. In other words, the dollars you have in stocks vs. in bonds or in cash will almost always be the most consequential decision. It’s easy to lose sight of that, though, because so much of the investment commentary from day to day focuses on details like small differences in fund expenses or small differences in bond yields. To be sure, details can be important, but only after considering the big picture.
Another challenge in investing is that certain rules of thumb gain so much popularity that they end up being seen as rules rather than just guidelines. For example, some say that the percentage of a portfolio allocated to bonds should be equal to an investor’s age. To me, that’s illogical. Consider Bill Gates. He’s 70 years old, but it stands to reason that he shouldn’t have the same asset allocation as any other 70-year-old. Rules of thumb are useful as points of reference, but we shouldn’t lose sight of the fact that everyone’s situation is different, and our investments should reflect that. More to the point, don’t worry if you’re doing something different from the next person.
Buy insurance, but only to protect against losses you couldn’t absorb on your own. What does this mean in practice? In many cases, it’s possible to significantly cut insurance premiums by increasing deductibles. For example, if you have a seven-figure net worth, you might consider raising the deductible on your homeowner’s insurance to $5,000 or $10,000 or even more. Similarly, you might re-evaluate your life insurance as your net worth grows. You’ll likely become “self-insured” at some point, and then you could reduce or drop that coverage.
Personal finance is quantitative, but we should never make decisions based only on the numbers. For example, a common question is how much cash to keep on hand. While we could work out an optimal number on a calculator, that shouldn’t be the final answer. You should also consider what would provide you with peace of mind. That is equally important.
Be wary of the psychological pitfall known as recency bias. This is the tendency to extrapolate from recent experience and to downplay the possibility that things might change. The most famous example? In the late-1920s, when the stock market was booming, Yale University economist Irving Fisher declared that the stock market had reached a “permanently high plateau.” Just nine days later, the market crashed, ultimately dropping 89% from its peak.
Avoid high fees. The research firm Morningstar once wrote, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make better decisions. In every single time period and data point tested, low-cost funds beat high-cost funds.”
Keep things simple. Most importantly, I would be wary of investments that aren’t easily understood. Not only can this help keep investment costs down, but it also makes it much easier to monitor your financial picture. Legendary fund manager Peter Lynch said it best: “Never invest in any idea you can't illustrate with a crayon.”
Avoid “interesting” investments. So far this year, Wall Street has introduced more than 1,000 new exchange-traded funds (ETFs). How many of these are worth your attention? My guess is you could probably count them on one hand. More than 80% of these new funds are actively-managed, and more than 30% employ leverage. And there are more to come. Fund companies recently filed paperwork to create ETFs that will track the performance of major league sports teams. They won’t actually own shares in the teams; instead, they’re expected to rise and fall in response to each team’s wins and losses.
For years, I’ve argued that bitcoin isn’t a valid investment. Even though it’s gone way up since I first made that argument, I still feel the same way, and for the same reason: because it lacks intrinsic value. Unlike stocks or bonds, it doesn’t generate any dividends or interest. Bitcoin’s price is not anchored to anything measurable or tangible, and that’s why, in my opinion, its price is so volatile.
When it comes to investment risk, investors’ attention usually turns to the stock market. That makes sense, but as we’ve seen this year, bonds are not without risk. And unfortunately, the total-bond market index, which is often seen as the simplest, set-it-and-forget-it option, is one that carries quite a bit of risk. If you’re choosing bond investments, my recommendation is to pay attention to a metric known as duration. This tells you how sensitive a bond, or bond fund, will be to interest rate changes. In my view, investors should hold a sizable portion of their bond investments in a fund, or in individual bonds, with a duration of less than two years.

Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

In Retirement

Is your retirement plan counting on a Social Security COLA in the future?

R Quinn | Sep 24, 2026

"Every time I read about this strategy I try and get myself to understand, but I have yet to do it. The thought of taking money from savings in the hope of receiving a larger monthly payment seven years hence and then hoping it lasts long enough to make it worthwhile simply befuddles me. Hope it all works out as planned and beyond. I guess I’m just a bird in the hand type person."

- R Quinn

Taxes

Sourcing Taxes for Roth Conversions

Mark Ukleja | Sep 29, 2026

"Mark, I just edited my reply above to clarify. Yes, I plan to do only do modest Roth conversions for the next 2 to 3 years. I’m utilizing the 0% LTCG/dividend rate for these upcoming years and doing Roth conversions within that tax bracket to stay at 0%."

- Bill C

From HumbleDollar Founder Jonathan Clements

Happiness

Let’s Get Happy

AMERICA’S HAPPINESS plunged during the pandemic. I’d assumed that survey result was an aberration, and perhaps that’ll still prove to be the case. But…

Abuse

If you don’t think AI is powerful and scary, think again!

R Quinn | Sep 30, 2026

"Dick, you might have told ChatGPT your age and income in a previous query. It will remember everything unless you set it to forget it. You'll find the button in Settings."

- Mike Gaynes

Health

Medicare Part D premium shock 2027

R Quinn | Sep 29, 2026

"FYI - CMS has loaded the 2027 plans and they are now available for comparison shopping on Medicare.gov"

- Mark Eckman

Retirement

Will Congress Wait Until the Last Minute on Social Security?

Jeff Peck | Sep 27, 2026

"From AI:… the upcoming general election race in North Carolina is projected by media analysts to potentially exceed $600 million in total spending. Maybe all the money being spent on federal politicians’s electoral dreams would be better spent on feeding and housing their constituents."

- DavidHLancaster

In Retirement

Dealing with a reduction in Social Security benefits. Is there a backup plan?

R Quinn | Aug 26, 2025

"Congressmen qualify for a pension after serving only three terms (six years)."

- Paul Ward

Family

A Broken Boy

Andrew Clements | Sep 30, 2026

"Thank you, Dan. I lost touch with most of my classmates, so I really don’t know how those years affected them later in life. My circumstances were also somewhat different from most of theirs. While many could go home for weekends or shorter breaks, Nick and I had parents living some 10,000 miles away in Bangladesh, so home simply wasn’t an option. I’m sure we all carried away different experiences from those years, but I can only really speak to the impact they had on me."

- Andrew Clements

In Retirement

The Security Money Can’t Buy

Dennis Friedman | Sep 25, 2026

"Bob, Thank you so much for sharing your heartfelt words and experience. I’m so glad you have good friends, family, and fond memories to lean on. Wishing you the very best."

- Dennis Friedman

Behavior

Time Is Priceless

Andrew Clements | Sep 23, 2026

"Thank you Philip for your encouraging words, and thank you for reading my post. It's much appreciated."

- Andrew Clements

Saving

A Very Humble Saving

Mark Crothers | Oct 1, 2026

"I was going to reply with a pun-heavy message, but I thought I'd better quit while I was only slightly behind 😁"

- Mark Crothers

Investing

Financial Lessons

ArticleAdam M. Grossman | Sep 26, 2026

WHAT'S THE MOST important idea in personal finance? It’s hard to single out just one, but over the years, I’ve found the following dozen ideas to be among the most useful.

Whether it’s on TV or online, there’s never any shortage of market prognosticators. Especially during a bull market, everyone seems to have an opinion on where things are headed. The reality, though, is that people can only guess about how the economy, the market or any individual investment will perform. Convincing as they might sound, no one has a crystal ball. That’s why, when it comes to investing, I suggest taking an evidence-based approach, one that relies as much as possible on data and research rather than on the simple stories, anecdotes and sayings that are so prevalent among market commentators.
What does the data tell us? Among the most significant research in recent years is the work of Hendrik Bessembinder. In looking at the historical returns of stocks, he found that just a tiny fraction—only 4%—have accounted for the vast majority of the market’s gains over and above what Treasury bills paid, and the median stock actually delivered a negative return. This is one of the key reasons I recommend index funds rather than picking individual stocks or investing in an actively-managed fund. Identifying that 4% is almost impossibly difficult. But if you invest in a broad-based index fund, you’ll have a high likelihood of owning the next Apple or Nvidia.
Be careful not to miss the forest for the trees. The most important driver of investment risk and return for most people, most of the time, is asset allocation. In other words, the dollars you have in stocks vs. in bonds or in cash will almost always be the most consequential decision. It’s easy to lose sight of that, though, because so much of the investment commentary from day to day focuses on details like small differences in fund expenses or small differences in bond yields. To be sure, details can be important, but only after considering the big picture.
Another challenge in investing is that certain rules of thumb gain so much popularity that they end up being seen as rules rather than just guidelines. For example, some say that the percentage of a portfolio allocated to bonds should be equal to an investor’s age. To me, that’s illogical. Consider Bill Gates. He’s 70 years old, but it stands to reason that he shouldn’t have the same asset allocation as any other 70-year-old. Rules of thumb are useful as points of reference, but we shouldn’t lose sight of the fact that everyone’s situation is different, and our investments should reflect that. More to the point, don’t worry if you’re doing something different from the next person.
Buy insurance, but only to protect against losses you couldn’t absorb on your own. What does this mean in practice? In many cases, it’s possible to significantly cut insurance premiums by increasing deductibles. For example, if you have a seven-figure net worth, you might consider raising the deductible on your homeowner’s insurance to $5,000 or $10,000 or even more. Similarly, you might re-evaluate your life insurance as your net worth grows. You’ll likely become “self-insured” at some point, and then you could reduce or drop that coverage.
Personal finance is quantitative, but we should never make decisions based only on the numbers. For example, a common question is how much cash to keep on hand. While we could work out an optimal number on a calculator, that shouldn’t be the final answer. You should also consider what would provide you with peace of mind. That is equally important.
Be wary of the psychological pitfall known as recency bias. This is the tendency to extrapolate from recent experience and to downplay the possibility that things might change. The most famous example? In the late-1920s, when the stock market was booming, Yale University economist Irving Fisher declared that the stock market had reached a “permanently high plateau.” Just nine days later, the market crashed, ultimately dropping 89% from its peak.
Avoid high fees. The research firm Morningstar once wrote, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make better decisions. In every single time period and data point tested, low-cost funds beat high-cost funds.”
Keep things simple. Most importantly, I would be wary of investments that aren’t easily understood. Not only can this help keep investment costs down, but it also makes it much easier to monitor your financial picture. Legendary fund manager Peter Lynch said it best: “Never invest in any idea you can't illustrate with a crayon.”
Avoid “interesting” investments. So far this year, Wall Street has introduced more than 1,000 new exchange-traded funds (ETFs). How many of these are worth your attention? My guess is you could probably count them on one hand. More than 80% of these new funds are actively-managed, and more than 30% employ leverage. And there are more to come. Fund companies recently filed paperwork to create ETFs that will track the performance of major league sports teams. They won’t actually own shares in the teams; instead, they’re expected to rise and fall in response to each team’s wins and losses.
For years, I’ve argued that bitcoin isn’t a valid investment. Even though it’s gone way up since I first made that argument, I still feel the same way, and for the same reason: because it lacks intrinsic value. Unlike stocks or bonds, it doesn’t generate any dividends or interest. Bitcoin’s price is not anchored to anything measurable or tangible, and that’s why, in my opinion, its price is so volatile.
When it comes to investment risk, investors’ attention usually turns to the stock market. That makes sense, but as we’ve seen this year, bonds are not without risk. And unfortunately, the total-bond market index, which is often seen as the simplest, set-it-and-forget-it option, is one that carries quite a bit of risk. If you’re choosing bond investments, my recommendation is to pay attention to a metric known as duration. This tells you how sensitive a bond, or bond fund, will be to interest rate changes. In my view, investors should hold a sizable portion of their bond investments in a fund, or in individual bonds, with a duration of less than two years.

Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

In Retirement

Is your retirement plan counting on a Social Security COLA in the future?

R Quinn | Sep 24, 2026

- R Quinn

Taxes

Sourcing Taxes for Roth Conversions

Mark Ukleja | Sep 29, 2026

- Bill C

From HumbleDollar Founder Jonathan Clements

Happiness

Let’s Get Happy

AMERICA’S HAPPINESS plunged during the pandemic. I’d assumed that survey result was an aberration, and perhaps that’ll still prove to be the case. But…

Abuse

If you don’t think AI is powerful and scary, think again!

R Quinn | Sep 30, 2026

"Dick, you might have told ChatGPT your age and income in a previous query. It will remember everything unless you set it to forget it. You'll find the button in Settings."

- Mike Gaynes

Health

Medicare Part D premium shock 2027

R Quinn | Sep 29, 2026

"FYI - CMS has loaded the 2027 plans and they are now available for comparison shopping on Medicare.gov"

- Mark Eckman

Retirement

Will Congress Wait Until the Last Minute on Social Security?

Jeff Peck | Sep 27, 2026

- DavidHLancaster

In Retirement

Dealing with a reduction in Social Security benefits. Is there a backup plan?

R Quinn | Aug 26, 2025

"Congressmen qualify for a pension after serving only three terms (six years)."

- Paul Ward

Manifesto

Sep 30, 2026

NO. 36: WE SHOULD consider working at least part-time into our late 60s and possibly beyond. That’ll not only help financially, but also it can bring a sense of purpose to our retirement.

humans

Oct 1, 2026

NO. 7: WE'RE ALWAYS comparing ourselves to others. Thinking we’re in for a treat, we go to expensive resorts and renowned restaurants. Imagining it’ll make our life better, we move to a ritzy town where our neighbors are all wealthier. But instead of boosting our happiness, these actions can drag it down—because we’re reminded that others are better off.

think

Oct 1, 2026

CONFIRMATION BIAS. We like to imagine that we objectively assess information and reach unbiased conclusions. The reality: We often start with an opinion—and then latch onto information that confirms what we believe. Those bullish on stocks, for instance, will devour optimistic news reports, while ignoring those that are troubling.

Truths

Sep 29, 2026

NO. 116: AVOIDING probate is a big cost savings in some states—but not others. A local attorney can tell you how things stand in your state. If probate is costly, you might place assets in a revocable living trust. That can also be a smart move if you own a house in another state—and face the prospect of your estate passing through probate in two states.

Money Guide

Manifesto

Sep 30, 2026

NO. 36: WE SHOULD consider working at least part-time into our late 60s and possibly beyond. That’ll not only help financially, but also it can bring a sense of purpose to our retirement.

Spotlight: Family

Family Dynamics, Part 2: Supporting Adult Children

DrLefty | Jul 22, 2025

As I mentioned in my last post, I've been thinking about various ways that complex family dynamics can affect one's own finances, especially when we're in or headed toward the retirement years. Today's topic is about having adult children on the "family payroll," long after…

A Summer of Shared Memories

Mark Crothers | Aug 26, 2025

I noticed a bit of a trend over the summer at my holiday home. Suzie and I were a part of it, as our 10 year old grandson stayed with us for a large portion of the school holiday period. It was wonderful to see…

Lessons on the Ground

Dennis Friedman | Jul 18, 2026

THE OTHER DAY, WHILE walking to my mailbox, I noticed a summer class schedule for a private gifted youth academy lying on the ground. I assumed it belonged to one of my neighbors, who has elementary-aged children. Their interest in extra academics didn't surprise me.…

What would you do if you received this text from your child as I did this morning?

R Quinn | Sep 16, 2026

“Hi. Could I borrow $5000? Only if you have it available from a cash source (don't want to cause taxes for you). We depleted our HSA with all the medical expenses in the last year and still have bills to pay. I would need…

Building Memories by Edmund Marsh

Edmund Marsh | Jun 15, 2025

When my wife asked for a hint for the Father’s Day present I was hankering to get, I was stumped for a day or so. I don’t need a new tie or wallet, or the new garden tool that I sometimes suggest. My eventual answer…

Under the Tree-a Christmas story

R Quinn | Dec 19, 2025

I wrote this article for HD four years ago. It was one of my favorites. It came to mind as we were setting up our Christmas tree this year. EVERY YEAR AROUND this time, I think about one of the most memorable events in my…

Time to scrap IRAs, 401k, 403b and all the rest

R Quinn | May 21, 2026

I mentioned this in a recent HD comment, but I think it deserves more discussion. It’s time to scrap all tax-advantaged defined contribution retirement plans and replace them with one plan, one set of rules, uniform limits. No IRAs of any kind, no 403b, no 401k, no nothing else. Just a Universal Retirement Plan- Individual or employer sponsored. All contributions…

Is there any point when a child needs financial help that you feel comfortable saying “not my problem?”

R Quinn | Mar 14, 2026

A question for discussion. Is an eighteen year old an adult? Do you expect an 18 year old to pay their bills, to be on their own for college? Several years ago on HD someone wrote in a comment that when their child reach age 18, they were done. They expected them out of the house and they were on…

About that inflation in retirement

R Quinn | Jul 11, 2026

No doubt you have heard or read the posts and comments, perhaps by friends about the Social Security COLA. It’s not accurate, not fair, not enough, doesn’t keep up with our actual spending, use the CPI-E and all the rest. One thing it does for sure is add to the Trusts growing shortfall. Some people really need that annual boost,…

How financially illiterate are Americans?

R Quinn | Jun 19, 2026

A article in the NYTs says “Many people are not aware IRAs exist.” Can that be true? I bet it is. One survey reports the median worker has only $955 saved for retirement. Another says 1 in 5 Americans over 50 has no retirement savings.Some people push for a national IRA with auto enrollment because people don’t have access at…

Just the facts about Social Security

R Quinn | Jun 12, 2026

The amount of misinformation out there about Social Security is astounding and to me very disturbing. I put this fact sheet together. I hope you will share the next time you hear one of the outrageous claims being made. The basic funding mechanism has remained essentially the same since Social Security began: Workers and employers pay dedicated payroll taxes (FICA).…

Question for writers

R Quinn | Feb 21, 2026

Is anyone else seeing their comment on a post being marked “Awaiting for approval” what’s going on?

A Very Humble Saving

Financial Lessons

Is your retirement plan counting on a Social Security COLA in the future?

Sourcing Taxes for Roth Conversions

Let’s Get Happy

If you don’t think AI is powerful and scary, think again!

Medicare Part D premium shock 2027

Will Congress Wait Until the Last Minute on Social Security?

Dealing with a reduction in Social Security benefits. Is there a backup plan?

A Broken Boy

The Security Money Can’t Buy

Time Is Priceless

A Very Humble Saving

Financial Lessons

Is your retirement plan counting on a Social Security COLA in the future?

Sourcing Taxes for Roth Conversions

Let’s Get Happy

If you don’t think AI is powerful and scary, think again!

Medicare Part D premium shock 2027

Will Congress Wait Until the Last Minute on Social Security?

Dealing with a reduction in Social Security benefits. Is there a backup plan?

Free Newsletter

Get Educated

Manifesto

humans

think

Truths

Money Guide

Manifesto

Spotlight: Family

Family Dynamics, Part 2: Supporting Adult Children

A Summer of Shared Memories

Lessons on the Ground

What would you do if you received this text from your child as I did this morning?

Building Memories by Edmund Marsh

Under the Tree-a Christmas story

Spotlight: Quinn

Time to scrap IRAs, 401k, 403b and all the rest

Is there any point when a child needs financial help that you feel comfortable saying “not my problem?”

About that inflation in retirement

How financially illiterate are Americans?

Just the facts about Social Security

Question for writers