As we approach the end of another year, many people are considering gifting some money or assets to the people and causes they care about. Depending on the situation and your goals, there are a few nuances worth considering which can make your gifts a lot more effective.  If you are giving money to a qualified, tax-exempt charitable organization, here are a couple strategies to maximize the impact of your gift.  First, if you are over 70 ½, and do not  itemize on your taxes,

How much of your net worth would you put into a house or a mutual fund that you knew was going to lose 70% of its value over the next 10 years. Not only that, but actually, you’ll have to pay money into it each year just to keep it. The right answer is, “as little as possible.”  Do houses or mutual funds generally do that? No. But cars almost always do.  My financial role models are not car people. The richest guy I’ve met in person drives a lexus, which is essentially an eve

On October 19th, 1987 the Dow Jones Industrial Average dropped 22.6% in a single trading session. A million dollar portfolio on Sunday finished Monday with $787,400.  Based solely on this datapoint, one might assume that 1987 was a horrible year to be invested in stocks. Yet the total return for the year was 5.81%, including dividends. Huh.  That’s partly because markets had a really strong, maybe excessively strong, year going into the crash. The Dow was up 44% from the begi

A catastrophe is always brewing. Or one is already happening. Sometimes more than one catastrophe is unfolding simultaneously. Such is life.  Stocks are risky in part because investors assume that the future will be more or less like the present. It never is. Occasionally, we are reminded what an unpredictable world we live in, and the illusion of smooth continuity is shattered. Chaos reigns. Hence, some people update their valuations models, find that their investments aren’

Let’s talk about the difference between a 10% expected return in stocks and a 3.8% return from TBills.  That extra 6.2% makes a big difference. Over 20 years, 10% turns $1 into $6.72. 1.038 grows it to just $2.11. That’s 3x the return, and the difference only expands with time.  Perhaps more startling is what happens when you factor in inflation. Even 3% takes that $2.11 down to just $1.17. So if you invest $1 in bonds and then wait 20 years, you end up with just $1.17 in ter

First off, for specific figures, I recommend this page on the Medicare.gov website. It explains what the key terms mean, like Part A, B, and D, how coinsurance works, etc. Importantly, it also mentions what those all cover, and how much you pay (or could pay) for them. And it does so in plain English. Super useful. Start here: https://www.medicare.gov/basics/costs/medicare-costs   Secondly, I recommend you work with a Medicare enrollment agent. It doesn’t increase your premi

For retirees I usually recommend a portfolio between 50% stocks and 80% stocks. In other words, the most conservative portfolio I...

Markets rallied hard today after Jerome Powell's speech, in which he noted some small shifts in the Fed's policy-making framework....

There are many ways to solve this problem, and it depends on incredibly wide range of factors. But still, here's a framework that I think...

As a rule of thumb, it is better to hold stocks than not to hold stocks. Your expected returns in stocks are around 10% nominal, or 5-6%...

Someone recently asked me whether they ought to take Social Security early and invest it rather than wait to claim it until full...

This is something that Dave Ramsey gets a lot of flak for. He recommends that once people are saving 15% of their income for retirement,...

There are a few things Dave Ramsey recommends which don't always make sense on paper, but seem to work really well in real life. Paying...

I wanted to share a ritual I’ve been doing which has given me a lot of value over the last few months. It comes from a book by John Mark...

As some people approach retirement, they start checking their portfolio more and more frequently. I do not recommend this.  This is also...

It has been a rough month for investors. The S&P 500 has fallen roughly 7% in the last month, or about 8% year-to-date. Though some of...

I've had this question come up a couple times with friends and family members, and I imagine there are a lot of people out there...

For a long time I struggled with indexing for the same reasons anyone does. You're buying expensive companies, the market isn't that...

The last two weeks of volatility in the stock market offer a timeless lesson on market crashes: the thing that causes a crash is never...

One of the most common questions I get asked is, “do you think the election is going to cause the market to crash this year?”  My typical...