Lavish spending is a sign not of wealth, but of wealth departed.
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.NO. 8: RETIREMENT may be our final financial goal, but we should always put it first. Why? It’s easily our most expensive goal, so it takes decades of savings and investment gains to amass enough.
DIVERSIFICATION. While diversifying is important with bonds, it’s crucial with stocks—and involves investing in hundreds and perhaps thousands of companies from a host of market sectors and countries. If we don’t diversify, and instead buy a handful of stocks or a single sector, there’s a danger we’ll take the risk of stock investing—without getting the reward.
GET YOUR CHILDREN age 18 and older to draw up a health care power of attorney, specifying that you can make decisions on their behalf if they become incapacitated. If they have an accident—and you have no power of attorney—you may be unable to make medical decisions for them or even learn basic information about the state of their health.
NO. 33: MOST INVESTORS trail the market averages. That’s true whether a market is considered efficient or inefficient. Before investment costs, we collectively earn the results of the market averages. After costs, we must inevitably earn less. In fact, investors—as a group—will trail the market by a sum equal to the investment costs they incur.
NO. 8: RETIREMENT may be our final financial goal, but we should always put it first. Why? It’s easily our most expensive goal, so it takes decades of savings and investment gains to amass enough.
IT’S BEEN A MONTH since I dropped off my twins at college, one east, one west. Each has a debit card for an account with the credit union here in our hometown. One has downloaded the credit union’s mobile app. Both are already developing their own ideas and strategies for managing college life on a shoestring budget.
I got them their debit cards some time ago. I also opened a teen account for their brother,
I perhaps have a contrarian view of the utility of some higher education courses. This opinion has developed over the last 20 years or so, talking and interacting with younger staff I employed within my past business. Degree courses seem to have somewhat transformed into a business model, more influenced by volume over suitability of the course and proper weight being given to the future earning and retirement outcome expectations the course will achieve.
To use a fishing analogy,
WANT A CONSERVATIVE strategy that can help you prepare for college costs? Consider prepaying your mortgage.
In 1992, when my oldest was 10 years old, we moved to a new home. We opted for a 15-year mortgage at 7.625% with 33% down. With our son’s graduation set for 2000, we began to prepay the mortgage so the last payment would coincide with the month before he began his freshman year. Thereafter, the payments previously sent to the mortgage company were instead directed to the college.
IN HIGH SCHOOL, I worked at a local roller-skating rink to save money for college. I calculated that, if I kept working at the same rate once I was in college, I could make it through my four-year degree without taking on any student loans.
I was determined to make it work.
In my freshman year, my plan started with a budget—and that budget included this simple edict: Spend the least amount possible on everything.
WE HAVE A PROBLEM: We may have saved too much for our daughter’s college education.
My wife and I started contributing aggressively to our daughter’s 529 college savings account as soon as she was born. For the first two years, we invested the full amount of the annual gift-tax exclusion, which was then $14,000. Now, the exclusion is at $16,000, but lately we haven’t been saving as much as we used to. The reason: Our early aggressive saving,
STUDENT LOANS ARE a hot topic—one that’s fraught with confusion and complexity. Still, many borrowers should consider taking action this year. Want to get a better handle on what’s happening? Let’s start with three changes that have lately been in the spotlight:
Federal student loan payments, along with the interest charged, were paused from March 2020 to September 2023. That gave borrowers more than three years to make principal-only payments or, alternatively, to potentially accrue credit toward loan forgiveness without the need to make payments.
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