Home - HumbleDollar

Around the Obstacles

ArticleDan Smith | Apr 25, 2026

I WAS 48 years old when the judgement was final and the papers were signed. My former wife and I split our net worth 50/50. There were no arguments over household items like furniture; I didn’t care about that stuff. Pam gladly accepted my proposal that she keep the house, and all its equity, in exchange for me keeping an offsetting amount of the IRAs and my 401(k), a very good move for my future self. By giving up the house, I also escaped the mortgage, which was the only loan obligation I had. Had there been consumer debt (there was none), I would have eliminated that as quickly as possible, beginning with the highest interest loans. I was ordered to pay spousal support to age 65, or my retirement if I worked beyond 65. I would be lying if I told you that I liked paying alimony. Still, it wasn’t unfair considering our age at divorce, Pam’s depression, and the fact that she mostly stayed at home to raise our kids. Long before the divorce was ever final, I knew I’d have to make up for lost time if I ever wanted to retire in the manner to which I wanted to had become accustomed. The divorce wasn’t going to be the only obstacle I would have to overcome. Thirty years of delivering beverages resulted in osteoarthritis and plantar fasciitis; my days on the beer truck were rapidly coming to an end. I needed a plan. Where Was I? I had to understand exactly where I was, and what my options were.

My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
I had acquired bookkeeping, payroll, and tax prep skills through my involvement with my local union, though I never pictured myself as the type to sit behind a desk, in a dimly lit office, crunching numbers beneath the glow of one of those green shade banker’s lamps.
As a last resort, I could fall back on my truck driving skills, using my commercial drivers license to get a job hauling ‘no-touch’ freight of some sort.
Last but not least, I needed a place to live. “Hello, mom and dad, I need my room back”. Sleeping on the twin mattress I gave up 25 years earlier, was not part of my plan.
I was determined not to let my occupation as a beer truck driver dictate my future job prospects.

Where did I want to be?

Where to live? Living with the folks was never meant to be a long term thing. After three months of that, I signed my first ever apartment lease as a lessee, as opposed to a lessor. That lasted two years, until a very large increase in the rent caused me to buy a duplex, and become a lessor again.
Where to work? I continued my work as a delivery driver for three more years. My position as the local union president, and my five paid weeks of vacation actually kept me off of the truck much of the time. That enabled me to tolerate the maladies that would eventually force me out of that job. Having absolutely no desire to spend the balance of my life languishing on SSDI and a minimal IRA balance, I set off on the path to becoming a financial services guy. That did not work out, and if you want more information on that, here’s a link.
To make ends meet, I turned to my last resort; driving a truck. Piloting an 18-wheeler was not how I envisioned my remaining working days. And although the freight was ‘no touch’, driving 600 miles every day in a Kenworth tractor is still pretty hard on your vertebrae. But sometimes you have to do what you have to do to survive and to keep your eye on your finish line. My heart goes out to full time drivers, that job is no walk in the park.
And what about love? My preference was to be in a relationship, but not any relationship. I wanted a good partner, I wanted to be a good partner as well. What qualities would I look for in a new partner? Independent, established, confident, and nice. Was I asking too much?

Making it All Work Finally, preparation collided with opportunity. In other words, I got lucky. Remember when I told you I didn’t picture myself as ever being a bean-counter? Two established financial services guys set me up with free office space and began funneling tax prep clients to me. What began with me preparing taxes for about three dozen of my union brothers, instantly turned into over 100 clients. There I was, a bean counter of sorts. I kept that truck driving job for several more years. And remember that duplex I bought after the rent spiked at my apartment? Well, there was this girl living next door. Enter Chrissy. We became best friends. She is no longer my neighbor. She is now my spouse. Of course, at the time we met, aside from being a nice guy, I wasn’t much of a catch. Man, she took a chance on me. As my client count went up, my days driving the big-rig went down. When the client count got to about 400, I retired forever from driving. No more trips to Chicago, Des Moines, Snow Shoe PA, or Jersey City. Chrissy and I began pounding 40% of our gross pay into savings. It would take until I was 70, but working together, we got to a place each of us only dreamed we would be. By living within our means, and keeping lifestyle creep to a minimum, we surpassed our goals. Chris retired at 64 and helped me during my final three years as a tax preparer. Lucky for me, Federal Wage and Hour never found out that I violated the minimum wage laws by never paying her in the first place. I sold the practice at age 70. I prepared 650 tax returns in my final year. It’s important to note that during our journey, we did not starve ourselves of food nor fun. We counted 27 trips during our first ten years together. Chris was great at finding great deals to various destinations in the Caribbean, and we turned several of her business trips into mini vacations as well. It’s important to prepare for the future, but have some fun along the way as well. I hope this piece inspires someone who is still on the road, dealing with similar obstacles, and wondering if there was a way around them. For 30 years, Dan Smith was a driver-salesman and local union representative, before building a successful income-tax practice in Toledo, Ohio. He retired in 2022. Dan has two beautiful daughters, two loving sons-in-law and seven grandchildren. He and Chris, the love of his life, have been together for two great decades and counting. Check out Dan's earlier articles.

Driving Prices

ArticleAdam M. Grossman | Apr 25, 2026

IN 2020, ELECTRIC car maker Lucid Motors brought in revenue of $4 million. Five years later, sales had risen impressively, to more than $1 billion. In 2025 alone, sales grew 68%. That sounds like a success story, and through that lens, it is. And yet, over that same period, the company’s stock dropped more than 89%. What happened? A better question is: What didn’t happen? Despite growing sales, the company has struggled to turn a profit. On sales of $1.3 billion last year, Lucid posted a loss of $3.8 billion. It’s experienced production problems and management turnover. It’s seen its competitors cut prices. As a result, it’s been forced to issue new shares, thus diluting the value of existing investors’ holdings, just to keep the lights on. In fairness to Lucid, the road to success is rarely a straight line. Arizona State University professor Hendrik Bessembinder studies the performance of public companies, and the results are sobering. In new research, he found that, over the past 100 years, the median return among stocks trading on U.S. exchanges was negative 6.9%. Only a minority of stocks, in other words, made any money at all. Why are these results so dismal? Four factors stand out. The first is emotion—specifically, investors’ emotions. After Lucid went public in late-2020, its stock began rising quickly, and in the early months of 2021, the shares gained nearly 500%. What was driving those gains? Since the company was just starting production, very little can be attributed to the company’s financial results. Instead, it was simply investor excitement around the electric vehicle market and the optimistic view that Lucid would become the next Tesla. But no sooner did the stock rise that it fell again. And in the years since, it’s been an overwhelmingly downward slide for investors. In the last interview he gave before he died in 1976, Benjamin Graham compared the stock market to a seesaw. “The present optimism is going to be overdone and the next pessimism will be overdone.” And that causes stocks to go to extremes. Fifty years later, Graham’s observation seems no less accurate. Indeed, investment manager Cliff Asness has argued that, because of the internet, the impact of emotions on the market is even worse today. Due to what he calls “the less-efficient market hypothesis,” inaccurate information can spread much more quickly today than it did in the past. You may recall the phenomenon in which a group of day traders, led by a YouTube personality who called himself Roaring Kitty, was able to drive up the stock of a nearly-bankrupt company for no rational reason. That couldn’t have happened in the years before social media. Another factor that can drive stock prices is government action, and this also explains part of Lucid’s slide. When the government ended tax credits on electric vehicles last year, that made electric cars much more expensive for consumers. And contrary to intuition, this year’s higher gas prices haven’t done much to entice buyers back to EVs. On the other hand, government action can sometimes be positive. In 2017, for example, Congress voted to cut the corporate tax rate from 35% to 21%, significantly boosting public company profits. Perhaps the most obvious factor that can drive stock prices is competition. This can take a few different forms. Coke and Pepsi, for example, have been battling for more than 100 years, but their relative positions don’t change very much. At this point, neither company is going to go out of business as a result of the other. In his book The Innovator’s Dilemma, the late Clayton Christensen described a much more disruptive form of competition—the sort that upends industries entirely, such as when 19-year-old Bill Gates outsmarted IBM. At the time, IBM was the most dominant company in the computer industry, but over time its position faded. It underestimated how important personal computers would become and didn’t take the market seriously. Years later, it ended up selling off its PC business entirely, and today makes very little hardware. The same sort of thing happened to BlackBerry, to Kodak and to Polaroid, among others. Like IBM, all of these companies had enormous resources. But, according to Christensen, it was their success that became their greatest weakness, because it caused them to underestimate threats and to downplay the likelihood that anything fundamental might ever change. Ken Olson, the founder of Digital Equipment Corporation, a leader in minicomputers in the 1960s and 1970s, famously asserted, “There is no reason anyone would want a computer in their home.” The tricky aspect of the innovator’s dilemma, though, is that it isn’t universal. Consider the early years of the auto industry. Before automobiles gained popularity in the early 1900s, it’s estimated that there were 4,000 companies in the horse-and-carriage business. The right move for any of these companies would have been to try to transition into automobile manufacturing. Carriage makers, especially, had relevant skills and were best positioned to make this leap. But they adopted a collective mindset that the automobile wasn’t going to succeed, dismissing cars as “devil wagons.” But one of these carriage makers, Studebaker, did correctly assess where things were going and successfully transitioned to making automobiles. The rest failed, faded away or switched into other businesses. Companies, in other words, can be very good at one thing but lose their footing in the face of change. That’s a key factor behind Bessembinder’s findings. A final factor that can cause companies to stumble: random events. Consider, for example, what occurred in Thailand in 2011. Heavy rainfall resulted in flooding that caused large industrial areas to become submerged. This included the factories of hard drive manufacturers Western Digital and Seagate, causing their stocks to drop 35% and 45%, respectively. Both recovered, but this is an example of how even good companies can run into bad luck. Years of research has shown how difficult it is to predict stock prices. Bessembinder’s new work, however, makes an additional important point, which is that, for all of the reasons discussed here, and likely others, stocks face many more roads to potential demise than to success. Thus, to succeed at stock-picking doesn’t just require research and hard work. It requires an almost prophetic ability to identify the tiny handful of stocks that will turn into homeruns. But since the odds are so steeply against success, that’s a key reason I see it as so important to stick with the simpler and less risky alternative of index funds. 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.

Investing Fundamentals: A Simple Guide for Beginners

William Housley | Apr 24, 2026

"Yes please do."

- William Housley

Financial Planning

Concerned | Apr 11, 2026

"Like others here, I have landed with a flat fee advisor. I worked with a couple of AUM advisors, and was uncomfortable with the value proposition. I heard Morningstar's Christine Benz interview a representative from Abundo, and engaged one of their advisors. Not perfect, but good to work with. I have many questions, and they answer them all, and generally find the advice to be sound, often better than my own thoughts. They don't make any trades, I have to execute them myself, so every option has it's limitations. With my kid's help, my wife would be more than capable of managing our finances in my absence, but it is comforting to know there is a trusted advisor who knows us, ready to help through uncertainty. This is not an endorsement or suggestion that my flat fee advisor is better than any other, just a recommendation to consider flat fee as an alternation solution."

- John Verlautz

Enough complaining already. Live your life and stop worrying about “they” “ them” or things

R Quinn | Apr 24, 2026

"I have observed that things that used to be considered luxuries are standard or baseline. My Dad was a music buff, he thought Karen Carpenter was the bomb. He returned from Vietnam and bought a new 1974 Dodge Dart and was just delighted to have an under-dash cassette tape player to listen to his favorite music. It was a luxury to him, one of few he allowed himself. Now people feel that wired connectivity to the music apps on their phones just isn't good enough compared to wireless, but it's so much better than just a few years ago. The proliferation of luxury features in our consumer mindset is a huge contributor to inflation. On many products, you can no longer find a simple manual system, everything is "smart." I don't object to the development of labor saving features, I object to the dependence on it. I'm probably guilty of this like anyone else, but I miss the days where you had to WORK for the fancy stuff. Or just do without."

- John Verlautz

Rethinking the “Right” Time for Social Security

Andrew Clements | Apr 23, 2026

"I guess the decision also should consider what portion of retirement income is made up of social security."

- R Quinn

The IRA Decision That Affects Your Kids

David Lancaster | Apr 17, 2026

"Wow, great example that the U.S. tax code is exhausting!"

- Andy Morrison

One Good Call?

Mark Crothers | Apr 14, 2026

"Great questions!"

- Andy Morrison

Fixing Social Security once and for all

R Quinn | Apr 15, 2026

"I agree with RQ. Wealthy or not, folks with no wages shouldn’t be required to contribute to SS system. There are other tax mechanism to shift wealth to support society."

- Andy Morrison

How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

DrLefty | Apr 22, 2026

"Thanks for the great tax advice. To respond to a couple of your points:

We are maxing out my husband’s 401K through 2026. Still deciding if we’ll do so in 2027, but probably not. We have enough in deferred comp accounts already. If we find we have extra to invest, we’ll do it in a taxable account.
We didn’t make a big enough profit on the sale of our condo, especially after sales costs, to worry about federal or state taxes on it. As I mentioned in my Pt 2 article, we were grateful to get out without actually losing money.
You raise a good point about our income decreasing, and I think that will require some tax planning for 2027. For this year, his income will reduce by 50% for the final quarter, but it’s not going to change our tax bracket for 2026.

Thanks for your time and expertise!"

- DrLefty

Lonely Island (Correct Edit)

Mark Crothers | Apr 22, 2026

"I have to say that I'm impressed, because if I were writing an article mainly read in Ireland, I wouldn't begin to know how to infuse it with Irish flavor, I mean flavour."

- DAN SMITH

Hidden Surcharge

DAN SMITH | Apr 21, 2026

"I remember this one now. Thanks, John"

- DAN SMITH

Around the Obstacles

ArticleDan Smith | Apr 25, 2026

My continued employment as a delivery driver would likely have left me on Social Security Disability (SSDI) by age 55.
I was very interested in personal finance, and knew many people in that field who would help me get my foot in the door.
I had acquired bookkeeping, payroll, and tax prep skills through my involvement with my local union, though I never pictured myself as the type to sit behind a desk, in a dimly lit office, crunching numbers beneath the glow of one of those green shade banker’s lamps.
As a last resort, I could fall back on my truck driving skills, using my commercial drivers license to get a job hauling ‘no-touch’ freight of some sort.
Last but not least, I needed a place to live. “Hello, mom and dad, I need my room back”. Sleeping on the twin mattress I gave up 25 years earlier, was not part of my plan.
I was determined not to let my occupation as a beer truck driver dictate my future job prospects.

Where did I want to be?

Where to live? Living with the folks was never meant to be a long term thing. After three months of that, I signed my first ever apartment lease as a lessee, as opposed to a lessor. That lasted two years, until a very large increase in the rent caused me to buy a duplex, and become a lessor again.
Where to work? I continued my work as a delivery driver for three more years. My position as the local union president, and my five paid weeks of vacation actually kept me off of the truck much of the time. That enabled me to tolerate the maladies that would eventually force me out of that job. Having absolutely no desire to spend the balance of my life languishing on SSDI and a minimal IRA balance, I set off on the path to becoming a financial services guy. That did not work out, and if you want more information on that, here’s a link.
To make ends meet, I turned to my last resort; driving a truck. Piloting an 18-wheeler was not how I envisioned my remaining working days. And although the freight was ‘no touch’, driving 600 miles every day in a Kenworth tractor is still pretty hard on your vertebrae. But sometimes you have to do what you have to do to survive and to keep your eye on your finish line. My heart goes out to full time drivers, that job is no walk in the park.
And what about love? My preference was to be in a relationship, but not any relationship. I wanted a good partner, I wanted to be a good partner as well. What qualities would I look for in a new partner? Independent, established, confident, and nice. Was I asking too much?

Driving Prices

ArticleAdam M. Grossman | Apr 25, 2026

Investing Fundamentals: A Simple Guide for Beginners

William Housley | Apr 24, 2026

"Yes please do."

- William Housley

Financial Planning

Concerned | Apr 11, 2026

- John Verlautz

Enough complaining already. Live your life and stop worrying about “they” “ them” or things

R Quinn | Apr 24, 2026

- John Verlautz

Rethinking the “Right” Time for Social Security

Andrew Clements | Apr 23, 2026

"I guess the decision also should consider what portion of retirement income is made up of social security."

- R Quinn

The IRA Decision That Affects Your Kids

David Lancaster | Apr 17, 2026

"Wow, great example that the U.S. tax code is exhausting!"

- Andy Morrison

One Good Call?

Mark Crothers | Apr 14, 2026

"Great questions!"

- Andy Morrison

Fixing Social Security once and for all

R Quinn | Apr 15, 2026

"I agree with RQ. Wealthy or not, folks with no wages shouldn’t be required to contribute to SS system. There are other tax mechanism to shift wealth to support society."

- Andy Morrison

Manifesto

Apr 24, 2026

NO. 77: TO BUY ourselves happiness, often the best strategy is to not buy anything at all. That can leave us with a plump bank account and the sense of financial security it offers.

think

Apr 25, 2026

TIME DIVERSIFICATION. Investors with long time horizons are encouraged to buy stocks. Yet such “time diversification” is controversial: While most of us assume the stock market is mean reverting—meaning good times follow bad—academics have argued that, if stock returns are random, healthy returns aren’t a sure thing, no matter how long we hang on.

act

Apr 25, 2026

GET A FREE CREDIT score. You can learn your score at websites such as Credit Karma, Credit Sesame, NerdWallet and WalletHub. Credit scores are also available from financial firms like Capital One and Chase, even if you aren’t currently one of their customers. Not all these sites will tell you your FICO score—the most widely used scoring system.

humans

Apr 24, 2026

NO. 51: WE FAVOR the familiar, such as stocks of local companies and makers of goods we buy. This “home bias” can be risky. Folks often bet big on their employer’s shares, so both their paycheck and portfolio hinge on the company’s prosperity. Many U.S. investors also shun foreign stocks, even though there’s no guarantee U.S. shares will outperform long-term.

Money Guide

Manifesto

Apr 24, 2026

NO. 77: TO BUY ourselves happiness, often the best strategy is to not buy anything at all. That can leave us with a plump bank account and the sense of financial security it offers.

Spotlight: Happiness

Financial Happiness

Adam M. Grossman | Jan 24, 2026

ACCORDING TO THE World Happiness Report, Finland ranks as the happiest nation in the world, a title it’s held for eight years in a row.
Each time this report is updated, it makes the news for a day or two but then fades. That’s for good reason, I think. As much as Finland might be a nice place, it isn’t necessarily practical to suggest that anyone pick up and move.
The good news, though,

Get to Choose

Richard Connor | Mar 15, 2022

AS A YOUNG ENGINEER at General Electric, I took a three-day class on career development. That class strongly influenced my thinking about my career—and my life. The class made use of a great little book by David P. Campbell called If You Don’t Know Where You’re Going, You’ll Probably Wind Up Somewhere Else.
The premise of the book is that life is a journey, not a destination. We should set some basic goals that help guide our journey,

If money were no object, what would you NOT change?

Matt Morse | Jul 29, 2024

I thought it might be interesting to ponder the things about our lives we are perfectly content with and would not change regardless of money.
If you received an unexpected inheritance of $20 million, would you move to a different house/location? Would you drive a different vehicle? Would you eat or dress differently? I don’t think I would. I’m living exactly where and how I want to live. Of course, this is easy to say now.

Free to Be

Jonathan Clements | May 6, 2023

HOW WOULD YOU DEFINE financial freedom? That’s the intriguing question I’ve been asked twice in recent weeks by journalists curious about the new HumbleDollar book, My Money Journey: How 30 People Found Financial Freedom—And You Can Too.
Financial freedom is something that pretty much everybody wants, and yet there’s no agreed-upon definition. Still, I think most folks would focus on two key elements: time and money. But I don’t think it’s a simple matter of having lots of dollars and lots of free time.

Our Good Fortune

Richard Connor | May 16, 2024

HOW DO WE MEASURE societal wealth? And what triggered this thought?
I started pondering the issue early last year. I had a total left knee joint replacement in January 2023. Not long after, I was sitting in my living room with an ice pack on my knee, having just completed a strenuous set of stretches and exercises.
The room was being warmed by a modern gas fireplace, lit by a remote control. No wood to split,

Thankful Tomorrow

Don Southworth | Nov 25, 2021

I RARELY PREACH these days—at least in front of congregations—but I still recall how hard it was, every Thanksgiving week, to come up with something new to say about gratitude.

The messages we hear and see this week will be fairly consistent: Buy more food and stuff. But also: Thanks be to God. Thanks for the life we enjoy.

Expressing gratitude is indeed good. Practice more of it in your life, and life will be sweeter.

A Costly Choice

Greg Spears | Mar 22, 2022

I RECEIVED A GREAT education at Northwestern University in the 1980s. But the school’s commitment to excellence seems to have fallen short when it comes to the 403(b) retirement savings plan for teachers and staff. Northwestern’s plan offers a generous 5% match and more than 400 investment choices, according to court filings. The lengthy list contained some clunkers, though, such as retail-class mutual funds when the plan could have offered lower-cost institutional shares instead. Three university employees sued in 2016, alleging they were being overcharged. In its response, the university said—among other things—that there were many fine investment options to choose from, including low-cost index funds. Who’s right in this fund fracas? The Supreme Court sided with the employees in an 8-0 ruling issued Jan. 24. It’s not the employees’ job to sort the wheat from the chaff, so to speak. Plan trustees have a fiduciary duty to keep imprudent funds out of the plan entirely, the court found. The case was sent back for reconsideration to the Seventh Circuit Court of Appeals, which had earlier found for Northwestern. But in the meantime, I’m prepared to draw two lessons. First, trustees could do worse than stock a plan with low-cost, broad-based index funds. Lawsuits alleging excessive plan fees have become a cottage industry, and I hate to think what this one has cost my university. Second, offering too many funds is harmful to retirement savings, according to Vanguard Group’s Center for Retirement Research. When confronted with choice overload, employees postpone enrolling to avoid a decision they might regret—like choosing the retail-class fund shares hiding inside an institutional retirement plan.

Not Staying the Course

Greg Spears | Sep 19, 2025

THE MOST FAMOUS expression at Vanguard is to ‘stay the course.’ It’s meant to suggest that investors should remain steadfast and not sell stocks in a downturn. This has proven great advice over the decades, but I’ve not been staying the course lately. I’ve been selling stock funds and buying bond funds this summer. Yet I think my actions would have the blessings of Vanguard founder Jack Bogle, who made the phrase ‘stay the course’ famous. Mr. Bogle used to have lunch with the crew in the cafeteria, called the Galley in keeping with Vanguard’s nautical naming style. There, he would dispense wisdom to all comers. Bogle advised keeping investing as simple as possible (though not too simple), and this included his ideas about asset allocation. During one lunch conversation, he said that the adage that you should own your age in bonds was generally correct, but he might make one adjustment. I’m 69 years old, so if I followed the traditional rule, I would invest 69% of my portfolio in bond funds and 31% in stocks. Bogle suggested tweaking the formula by subtracting your age from 110 and owning that percentage of stocks. By this adjustment to the rule, I would invest 59% bonds and 41% stocks. At summer’s start, 70% of my retirement assets were in stocks. I’ve profited from being overweight in stocks. So, why not let it ride? Well, I don’t need to make more money in the market. I do need to protect what I’ve got. When the market briefly corrected earlier this year, I admit I had regrets. After it recovered, I felt I was offered a do-over. I didn't stay the course. After a season of selling, I’ve whittled my stock holdings down to roughly 45%. The remainder is in bonds and money…

A Man With a Plan

Greg Spears | May 10, 2024

YOU COULD CALL ME a 529 superfan. The college savings plans helped me put my two kids through college. Their state and federal tax advantages cut the exorbitant cost of college just enough so we didn’t have to borrow for our two kids’ education. Which makes it surprising that I knew the man who created the 529 plan—but I didn’t realize he’d fathered them. I covered Senator Bob Graham of Florida as a newspaper reporter in Washington in the 1990s, but left the beat the year before he introduced his 529 legislation. I only learned of his role in 529s shortly before he died on April 16 at age 87 in a retirement community in Gainesville, Florida. As a senator, Graham was tan and affable, but he spoke hesitatingly, choosing his words with care. He was what my old political science professor would have called a workhorse, not a show horse. A Harvard-educated lawyer, Graham concerned himself more with details than speech-making, and he worked well in a divided legislature. A Democrat, Graham worked across the aisle with Senator Mitch McConnell of Kentucky, a Republican, to write and pass the rules around 529 plans. About a dozen states, including Florida, had created state college savings plans by then, but the rules were inconsistent and limiting. In Florida, for example, parents could buy a tuition credit for a newborn at a fixed price that would pay for one credit hour of classes 20 years later. That was quite a bargain given the inflation rate in education, but it only worked if your child attended a state university in Florida. If your child went to an out-of-state institution or to a private college in Florida, you got a refund of your money paid, not college credits. Graham realized we needed one college…

Indexing Triumphant

Greg Spears | Jun 12, 2022

FOR THE FIRST TIME, retail investors have more money in index funds than actively managed funds. This is based on March 31 figures compiled by Morningstar and reported by columnist Allan Sloan. Twenty-five years ago, Vanguard Group founder Jack Bogle published his remembrance of the 1970s launch of the first index fund geared to main street investors. As I page through the book again, I’m reminded of how close indexing came to failing. Bogle recounts going on a 12-city roadshow, hoping to raise somewhere between $50 million and $150 million for the fund’s launch. He returned with $11 million. Several firms already had tried an indexing approach with institutional clients, including Batterymarch Financial, Wells Fargo and Samsonite’s pension managers. They met with technical problems and little or no commercial interest, as Robin Wigglesworth details in his excellent book Trillions. Bogle—as determined as they come—plowed ahead anyway. Vanguard opened First Index Investment Trust, as it was called then, on Aug. 31, 1976. It didn’t have enough money for all 500 stocks in the S&P index, so it began with 280 stocks—the 200 largest by market capitalization, and 80 stocks judged representative of the index’s remaining stocks. The timing was terrible. The U.S. stock market soon entered the doldrums, battered by oil shortages and inflation shocks. In its first seven years, the index fund beat the average return for U.S. stock funds only two times. “The Trust’s disappointing initial reception was followed by an equally disappointing ongoing acceptance in the marketplace,” Bogle wrote. The fund was dubbed “Bogle’s folly,” and the name stuck. Bogle always seemed to draw strength from difficulties. He remained a vocal proponent of indexing, sounding certain that its success was inevitable. It isn’t “alchemy,” he wrote in his remembrance. “The secret to indexing is its ability to provide extraordinarily broad…

Rembrandt or Not?

Greg Spears | Sep 9, 2024

I WAS INTRIGUED WHEN an old Dutch painting attributed to a “follower of Rembrandt” came up for auction near me in Maine late last month. It was a portrait of a young woman wearing an elaborately starched ruff collar, the type of clothing depicted in Golden Age paintings from the 1600s. The country auction house estimated the painting would fetch $10,000 to $15,000. I couldn’t shake the thought—however fleeting—that this might be the real thing. As it turns out, I wasn’t alone. Several Rembrandts were unjustly downgraded by art scholars in the 1980s, which has thrown a cloud of uncertainty over the identification of his work. The Allentown Art Museum in Pennsylvania, for example, was given a Rembrandt in 1960 by dime-store magnate Samuel Kress. Years later, a committee of art historians calling themselves the Rembrandt Research Project examined it. The committee concluded it was painted by a pupil who worked alongside Rembrandt in his Amsterdam studio. In 2018, the museum sent the painting of a young woman to be conserved in New York. The brushwork was too fine to be by the pupil, the restorers concluded. In 2021, the museum proclaimed the painting to be a Rembrant once again. The errant scholars tended to demote Rembrandts that lacked dramatic flair. Critics of their work, however, say they overlooked the everyday commissions, like the one in Allentown, that Rembrandt accepted to pay his bills. To my untrained eye, the painting in Maine had a quiet, solemn glow—just like the one in Allentown. I’m a fan of Antiques Roadshow. To me, the painting had the potential to be one of those “oh my God” finds worth a fortune. Would I gamble on it myself? Only if it were an absolute steal. The day before the sale, I logged on to the…

Buffett’s Pension

Greg Spears | Jul 22, 2022

AS MY OLD NEWSPAPER company slid toward bankruptcy, it signed over the deeds to its newspaper buildings to the pension plan in an effort to meet its obligations. It was like burning the furniture to keep the house warm—and it worked about as well as you might expect. When the company finally filed for bankruptcy in 2020, it laid the blame on its unfunded pension obligations. The pension fund was short by $1 billion, according to a subsequent audit by the Pension Benefit Guaranty Corporation, which took over the plan and now pays me a monthly benefit. This is not an uncommon problem. Collectively, U.S. pension funds are short-funded by more than $1 trillion, having only 75 cents on hand for every dollar in benefits promised to employees, according to Boston College’s Center for Retirement Research. Given this backdrop, it’s surprising to hear of another newspaper company’s pension plan that’s overflowing with money. Graham Holdings—which for most of its existence owned The Washington Post—has a $2.1 billion pension surplus, according to the company’s recent filings. It’s so stuffed with money that the company expects to never contribute another cent to the plan. Credit for this is owed primarily to Warren Buffett, who steered the pension fund’s investments in an unorthodox direction while he was a company director in the mid-1970s. In a 19-page memo written to then-CEO Katharine Graham in 1975, he said hiring the usual institutional money management firms would be “doomed to disappointment.” He predicted that rising inflation rates would eat up the returns of the bond portfolios then favored by pension managers. Buffett instead recommended that the fund selectively buy stocks to meet the plan’s obligations. The Post’s directors agreed and hired two small, specialized investment firms that Buffett recommended in 1978. The majority of the company’s pension…

Around the Obstacles

Driving Prices

Investing Fundamentals: A Simple Guide for Beginners

Financial Planning

Enough complaining already. Live your life and stop worrying about “they” “ them” or things

Rethinking the “Right” Time for Social Security

The IRA Decision That Affects Your Kids

One Good Call?

Fixing Social Security once and for all

How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

Lonely Island (Correct Edit)

Hidden Surcharge

Around the Obstacles

Driving Prices

Investing Fundamentals: A Simple Guide for Beginners

Financial Planning

Enough complaining already. Live your life and stop worrying about “they” “ them” or things

Rethinking the “Right” Time for Social Security

The IRA Decision That Affects Your Kids

One Good Call?

Fixing Social Security once and for all

Free Newsletter

Get Educated

Manifesto

think

act

humans

Money Guide

Manifesto

Spotlight: Happiness

Financial Happiness

Get to Choose

If money were no object, what would you NOT change?

Free to Be

Our Good Fortune

Thankful Tomorrow

Spotlight: Spears

A Costly Choice

Not Staying the Course

A Man With a Plan

Indexing Triumphant

Rembrandt or Not?

Buffett’s Pension