Jonathan Clements's Blog, page 406

February’s Newsletter

IT’S BEEN A ROUGH WEEK for stocks, but a great 30 years. Result: My generation has earned stock returns that far outstrip the results merited by the economy’s performance. This has been good for us, but not so good for our adult children. To save for their retirement, they’re buying the overvalued stocks that we’re selling to pay for our retirement.

To make matters worse, those in their 20s and 30s are facing a tougher employment market, where getting a good job often requires more than just a bachelor’s, and yet all that time in college and university is also leaving them with crippling amounts of student loans. I tackle this conundrum in two articles in HumbleDollar’s latest newsletter, which also includes our usual list of the past month’s most popular blogs.

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Think of the Children

I FEAR I AM GROWING WEALTHY at my children’s expense. My investing life began in the late 1980s. Yes, there have been stock market bumps since then, notably the 2000-02 and 2007-09 market crashes, and even a minor hiccup over the past week. But if you look at the broad trend, it’s been three decades of rising stock market valuations.

From year-end 1987 to year-end 2017, the S&P 500’s price-earnings multiple climbed from 13.8 to 24.6, its cyclically adjusted price-earnings ratio jumped from 13.4 to 32.3 and its dividend yield declined from 3.7% to 1.8%.

And, no, this isn’t distorted by the start date. Despite the October 1987 crash, 1987 was a winning year for the S&P 500, with stocks gaining 5.3%, including dividends. Indeed, the increase in valuations looks similar if you use 1988 as the start date.

Those rising valuations helped propel the S&P 500 to an 8.3% annual share-price gain over the past 30 years. (Add dividends, and the total return was 10.7% a year.) That 8.3% annual share-price gain ran far ahead of economic fundamentals. Over the 30 years, the economy’s nominal growth was 4.7% a year and earnings per share climbed at 6.3%, while inflation notched 2.6%.

If share prices had merely tracked earnings growth, annual returns would have been two percentage points lower, and if they’d tracked nominal economic growth, the results would have been three-and-a-half points lower. Think of it this way: My generation has contributed to an economy that’s done okay, but not great—and yet we’ve pocketed stock-market rewards worthy of economic superstars.

There are all kinds of possible explanations for the market’s heady performance. Our economic fears have subsided and our appetite for investment risk is far greater, thanks to the long post-World War II period of prosperity. We have an abundance of capital sloshing around the globe, chasing limited investment opportunities. Interest rates are far lower today than 30 years ago, making bonds and cash investments less attractive. Sluggish wage growth and lower corporate tax rates have fattened company profit margins. Shrinking investment costs have made the financial markets more appealing.

Whatever the reasons for the market’s spectacular performance, I’m now sitting with a portfolio that will easily pay for retirement. I reaped the reward of the long rise in valuations—and I even got a couple of nice market crashes that allowed me to buy stocks at bargain prices. I’m startled by my good fortune, but also aware that it could slip away, so I have been gradually easing out of stocks and purchasing more bonds, especially inflation-indexed Treasury bonds. I’ve won the game, so I see less reason to keep playing.

Meanwhile, my adult children are buying. The stocks that I’m selling to pay for my retirement, and which strike me as overpriced, are the ones they’re purchasing to pay for their retirement.

Over the next three or four decades, my children will likely make decent money in stocks. But given today’s starting valuations, I suspect their returns will be far lower than mine.

But what choice do they, and others in their 20s and 30s, have? Stocks may generate lackluster results, but they should perform better than bonds and other more conservative investments. My advice to my children: Save as much as you can, allocate 40% and perhaps even 50% of your stock portfolio to foreign shares, with their more reasonable valuations—and hope for tumbling markets, so you can buy at much lower price-earnings multiples.

January’s Greatest Hits

HERE ARE THE SEVEN most popular blogs from January:

Price vs. Value
DaveRamsey.com
Second Childhood
More for Your Money
The Price Is Slight
About That 22%
Hitting Refresh

January’s newsletter also attracted a slew of readers, as did two blogs from late December, Changing Seats and Best Investment 2018. Indeed, last month saw the highest number of page views in HumbleDollar’s brief 13-month history.

Think of the Children (Part II)

ALMOST EVERYBODY SAYS THEY’RE MIDDLE CLASS, so the term has lost almost all meaning. What’s the alternative? Instead of middle class, I think of myself as part of the investing class—with “investing” used in the broadest sense. I want to use the money I’ve saved not only to maintain my financial position, but also to give my children and stepchildren a leg up and (whenever they show up) their children as well.

To be able to do so is a privilege. Many parents barely have the wherewithal to support themselves, let alone help their children.

But to do so is also increasingly difficult. For earlier generations, simply getting the kids into college was the key to continued family prosperity. Now, not only is a bachelor’s degree typically a costly endeavor, but often it also isn’t enough. To stand out in the work world and thrive financially, those in their 20s and 30s may need advanced degrees, as well as parental help with other goals. All this raises three key questions:

1. Should you help? If you provide financial assistance to your adult children, there’s a danger you’ll kill their ambition with kindness.

But I suspect that, whether you help or not, the damage is probably already done. Simply growing up in a comfortable household will often squelch children’s financial ambition. Why would they worry about having enough money if they never saw their parents worry?

You could try to instill that financial ambition by, say, deliberately depriving your kids from an early age. But that strikes me as harsh and undesirable. Instead, I would worry about a bigger issue: making sure your children have some ambition, even if it isn’t financial ambition. You don’t want your kids meandering through life and missing out on the great pleasure that comes with working hard at something they’re passionate about.

To avoid that fate, encourage your children to find a purpose that will make their lives fulfilling and make the world a better place. That purpose may not make them rich. But it should enrich their lives.

2. How much help can you afford to give? You won’t be doing anybody any favors—yourself or your children—if you provide substantial assistance to your kids, only to discover later that you don’t have enough for your own retirement.

My recommendation: Give serious thought to how much financial support you can offer and which goals you want to help with, and then have occasional frank conversations with your children. You want to manage their expectations, so they know what help they will receive and where you’ll draw the line.

Try to have that first serious money conversation when your children are high school freshmen. You should talk to them about how much help you can offer with college costs, so they know whether they can aspire to ritzy private colleges or should look instead at state universities and community colleges.

If they’ll need to take on student loans, that should be part of the conversation. Talk to those in their 20s and 30s with education debt, and many will readily admit they didn’t understand what they were getting into. As a responsible parent, you should discuss likely career earnings and hence how much your children can reasonably borrow.

Ideally, your children will opt for colleges that leave them with little or no debt. There’s mounting evidence that student loans put young adults at a lifelong financial disadvantage, with many struggling to buy homes and save for retirement.

3. How can you leverage your dollars? If you’re like me—part of the investing class but still financially constrained—you should think not only about how much help you can provide, but also how best to use both those dollars and your parental influence to get your children on the right track financially.

To that end, consider seeding your adult children’s financial future. That might mean helping them set up accounts for different goals, such as a Roth IRA for retirement, high-yield savings accounts for emergency money and for their future house down payment, and 529s for the grandchildren.

You could provide the initial investment for these accounts and then encourage your children to contribute regularly thereafter. By doing so, you emphasize the goals you think they should focus on—and you get a chance to pass on your financial wisdom, by picking the right accounts and selecting appropriate investments.

You might also encourage your children to think longer-term, so they fund retirement accounts and buy stocks. But how? You could reassure them that you stand ready to help in the short-term if, say, they lose their job or get hit with surprisingly large medical bills. With your backing, they might be comfortable raising the deductibles on their various insurance policies and keeping a somewhat smaller emergency fund. That, in turn, will give them additional money to sock away toward longer-term goals.

Follow Jonathan on Twitter @ClementsMoney and on Facebook.

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The $121,500 Guestroom

I HAVE A WIFE, TWO CHILDREN, TWO DOGS, and the need for three bedrooms and two bathrooms. In March 2015, I purchased a four bedroom, 3½ bath, 3,000-square-foot house in a nice neighborhood with quality public schools.

The fourth bedroom was largely unnecessary but, like many people, we occasionally get visitors and feel it’s nice to have an extra bedroom for them, instead of spending money on a hotel room. This is the story of how that fourth bedroom cost me more than $121,500, far more than it would have cost to get hotel rooms for our occasional visitors.

The Guestroom. The guestroom and its accompanying full bathroom are approximately 600 square feet. We bought the house for $140 per square foot, meaning that this extra room and bathroom cost me $84,000. Where I live, you can get a decent hotel room for $100 a night.

In other words, I could have purchased 840 nights in a hotel room. I don’t think we’ll ever have 840 overnight guests, unless we stay in this house for a very, very, very long time. In addition, we have a very comfortable, queen-size Lazy Boy sleeper couch that could have substituted for the guestroom.

Running total: $84,000

The HVAC Incident. “The way they installed this, I don’t even think I can fix it.” That is not what I wanted my HVAC (heating, ventilation and air conditioning) repairman to say, but that is what he said. The guestroom did not have its own HVAC zone and, because it is above the garage and the insulation is not what it could be, the guestroom is always too hot or too cold. If you are going to have a guestroom, it needs to be comfortable, right? Some $5,000 later, the guestroom had its own wall-mounted HVAC unit and zone.

Running total: $89,000

The Exchange Student. Because we have an $89,000 extra room with a bathroom and its own HVAC, we hosted a Spanish exchange student during the past school year. Hosting an exchange student was a great experience for both my family and me, expanding our horizons and hopefully forging a lasting relationship with someone for us to visit in Spain.

The student, though skinny as a rail at 5’8” and 110 pounds, ate way more than I would have expected. I have no idea how much it cost me.

Running total: $89,000, plus whatever it cost me to feed a skinny but hungry 16-year-old boy for a school year.

Despite the fact that he was of driving age, he was not allowed to drive in the U.S. This, of course, led to…

The Manny Van. As of August 2016, I had a wife, two kids, two dogs and an exchange student. It was going to be tough to get around and do the traveling we like to do in our Toyota Prius and Ford Fusion Hybrid. Having a 12-, 15- and 16-year-old in the backseat, while technically feasible, was not going to be fun for anything other than the shortest of trips. Plus, we like to bring the dogs.

Enter the $32,500, 2015 Toyota Sienna minivan, which I like to call the “manny van” when I’m driving. It enabled me to haul all living beings I was responsible for in the manliest of vans.

Running total: $121,500, plus whatever it cost me to feed a skinny but hungry 16-year-old boy for a school year.

The Moral of the Story. One of the classic financial mistakes that people make (including me, apparently) is spending too much money, including buying too expensive a car and too large a house. Sometimes, something as simple as wanting a guestroom can lead to unintended and expensive consequences. If we didn’t have a guestroom, I would probably have an extra $121,500, a school year’s worth of food—and I wouldn’t be driving a “manny van.”

Joel M. Schofer, MD, MBA, is a Commander with the U.S. Navy’s Medical Corps. He blogs about personal finance at MilitaryMillions.com and can be reached at Still-In@MilitaryMillions.com. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Department of the Navy, Department of Defense or the United States Government.

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Five Ways to Diversify

IN 1952, A YOUNG GRADUATE STUDENT named Harry Markowitz wrote a paper that sought to prove, mathematically, the old maxim “don’t put all your eggs in one basket.” Through his work, Markowitz taught investors how to diversify their investments effectively, something that was not well understood at the time.

For instance, he explained that the number of stocks you hold is far less important than the number of types of stocks you own. A portfolio of 60 stocks might appear to be diversified. But if all 60 are technology stocks, there is still quite a bit of risk. Today, this might seem like commonsense, but at the time it was a major revelation.

Markowitz ultimately won a Nobel Prize for his work, and there’s no question it was brilliant. Today, however, there’s even more you can do to manage risk in your financial life. Here are five ideas to help you think more comprehensively about diversification:

1. Diversify your tax rates. If you’re saving money through a traditional retirement account, like a 401(k) or an IRA, you’re already doing this, by choosing to pay taxes at future rates rather than today’s. That’s a great move, but don’t stop there. There are other accounts which can also help you diversify your tax exposure.

For example, under the new tax laws, you can now use the tax-free growth offered by 529 savings accounts to pay K-12 expenses. Some states even offer an income-tax deduction for 529 contributions.

Tax-free growth is also available from Roth IRAs and 401(k)s, thus providing a hedge against higher future tax rates. Don’t have a Roth 401(k) at work and don’t qualify for a Roth IRA? Check out the “backdoor” Roth IRA, which may allow you to contribute to a Roth regardless of your income level. And don’t forget Health Savings Accounts, which are triple-tax-advantaged for those who are eligible.

2. Diversify your investment products. In Markowitz’s time, the investment world was much simpler, consisting primarily of stocks, bonds and a modest number of mutual funds. Today, you can choose from a much broader array of investments, some with remarkably low costs.

But you also need to be careful. Exchange-traded funds, for example, have become extremely popular since they were invented in 1993, but they have also exhibited weaknesses. In the “Flash Crash” of May 2010, the prices of many ETFs briefly fell to a penny per share for no explicable reason. With that history in mind, I recommend diversifying the investment products you hold. Don’t own just ETFs or just mutual funds. Instead, own a broad enough mix to protect yourself against the sort of extreme and unexpected events that occur from time to time.

3. Diversify your financial relationships. If you’re from New York, you may remember the blackout of 2003. Among other effects, ATM machines and credit card networks went dark, making it difficult to buy food. The root cause turned out to be a malfunction at an electric utility in Ohio.

For many, this was a reminder that our financial system has vulnerabilities. Today, that includes the risk posed by hackers. As self-defense, I don’t think it’s unreasonable to maintain accounts at more than one financial firm. You might arrange things so that your bank account, credit cards and investment accounts are with different institutions.

4. Diversify the timing of your purchases. Clients often ask me if it’s wise to invest in stocks right now. Unfortunately, no one can predict whether the market will see a decline any time soon—or whether it will continue to rise.

Got excess cash? I recommend investing it on a fixed schedule, such as one-tenth each month for ten months. If the market keeps going higher, you will be glad you didn’t wait. And if the market goes down, you’ll be happy you didn’t invest it all at once.

5. Diversify the timing of your sales. If you are in retirement and taking required distributions from your IRA, you may wonder what the best strategy is for making those withdrawals. I apply the same rationale to sales as I do to purchases. Because we don’t know how markets will perform in the short-term, I would ask your IRA custodian to issue your annual distribution in equal monthly installments over the course of the year.

Adam M. Grossman’s previous blogs include About That 22% , More for Your Money and Your Loss, Their Gain. Adam is the founder of  Mayport Wealth Management , a fixed-fee financial planning firm in Boston. He’s an advocate of evidence-based investing and is on a mission to lower the cost of investment advice for consumers. Follow Adam on Twitter  @AdamMGrossman .

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This Week/Jan. 28-Feb. 3

CHECK YOUR BENEFICIARY DESIGNATIONS. Your retirement accounts and life insurance will typically pass to the beneficiaries specified on those accounts, not the people named in your will. If your family situation has changed, or you simply don’t remember who you listed, take a moment to review your beneficiary designations.

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Second Childhood

IN COLLEGE, I WAS THE KID who swore he would never get married and never have children. A year later, I was engaged. Two years later, I was married. Three years later, I had a newborn.

And three decades later, I’m 55 years old, with a daughter who will turn 30 later this year.

I have no regrets about having children so young. Far from it. But it does mean I missed out on the romancing, bar-hopping, commitment-free years that many in their 20s enjoy. But in return for that sacrifice, I have had my reward over the past four years—a period I’ve come to think of as my second childhood.

Because I was thrust so quickly into the adult world, I was compelled to get serious about money at a relatively early age. I paid off my credit card debt from college, started saving regularly for retirement, bought a house, took on freelance work whenever I could, wrote books at the weekend, and began socking away money for my own children’s college.

By age 51, my two kids had their bachelor’s, my nest egg was large enough for a comfortable retirement and I had lost all enthusiasm for my job at Citigroup, so I quit.

Today, I think of myself as semi-retired: My various ventures earn me roughly a third of what I made as Director of Financial Education for Citi’s U.S. wealth management business and, indeed, I spend modestly more than I earn.

Yet I have never worked harder. Over the past four years, I’ve tackled all manner of projects. In addition to launching this website, I have authored four books, joined the investment committee and advisory board of Creative Planning, given speeches, worked on a concept for a personal finance app, consulted for Wall Street firms, taught a college course on personal finance for two semesters, written a regular column for first The Wall Street Journal and then Financial Planning magazine, and penned freelance articles.

When I left Citi, I didn’t expect to be so busy, but I have no regrets. I have viewed the past four years as my chance to try new things without worrying about what they paid me, and I’ve wanted to make the most of the opportunity.

What have I learned along the way? Five lessons come to mind—and I think they have implications for others venturing into retirement or semi-retirement.

1. It’s hard to know what will make you happy. I enjoy giving speeches and talking to folks about their finances, so I figured I’d love teaching. I was wrong. I expected great things of my students, but most seemed to expect very little of themselves—and I had neither the patience nor the teaching skills needed to bridge that gap.

2. There’s great pleasure in working hard at something you’re passionate about. I have the financial wherewithal to ditch my various projects and retreat to the couch, but I have no desire. Even in my semi-retirement, I get enormous satisfaction from wrestling with financial questions and writing projects.

3. I wish it were otherwise, but I find it isn’t quite enough to help others and do work I consider important. I still enjoy the extra validation that comes with making money and hearing applause. These things aren’t as important to me as they once were, but I can’t shake them entirely.

4. When you’re always home, it’s hard to leave it all behind. Entire days can pass without me going outside, especially during winter. The gym is downstairs, my laptop offers seductively easy access to work and to the larger world, and life’s necessities—food, booze, toothpaste and toilet paper—can all be delivered.

Problem is, remaining rooted in one spot makes it difficult to escape worries and work pressures. Lately, I have been trying to get out of the apartment more, if only for a brief walk, but I’m not as good about it as I should be.

5. The markets look riskier when you aren’t regularly adding new savings to your portfolio. I have always invested heavily in the stock market, and still do. But now that I’m more likely to pull money from my portfolio than add to it, I’m less sanguine about the possibility of a large stock market decline.

As a gut check, I use the strategy I recommend to others: Occasionally, I will take my portfolio and assume the stock portion loses 35%, which is the typical decline during a bear market. I’ll then look at the resulting hit to my overall portfolio’s value and ask myself, “Would you be okay with that?” As the market has climbed over the past year, I’ve found myself answering “no”—and that’s prompted me to ease up somewhat on stocks.

Follow Jonathan on Twitter @ClementsMoney and on Facebook.

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The Last Word

I FREQUENTLY FIELD INQUIRIES from people who know they ought to get a will. Others have wills, but may need to revise them because they’ve moved to a new state, entered into a marriage or ended one. But either way, most folks—in my experience—never get beyond that simple first step.

And those who do often overlook an additional step that’s almost as necessary: drawing up a “letter of final instructions” that provides their heirs with an informal personal financial inventory. While it isn’t legally binding like a will, a letter of final instructions offers the chance to list exactly where you keep your important personal papers, what assets you have and who gets them.

Intrigued? For starters, make sure the letter is current and accessible. It can include certain important details, like funeral arrangements or care of pets, which can change and thus are usually impractical to put into your will. Who should get copies of your letter? Typically, the list would include your spouse, one or more of your adult children, your lawyer and your executor.

At a minimum, the letter may alert your family to the existence of assets that otherwise might prove difficult or even impossible to find when death, a serious illness or another crisis leave you unexpectedly unable to handle your financial affairs. Without the letter, it’s frequently a daunting task for heirs to track down assets, resulting in situations that can be nightmarish and trigger epic family donnybrooks that could’ve been prevented. Indeed, the absence of a letter could significantly increase the fees charged by me and other advice-givers who bill by the hour.

Include in the letter where you keep copies of checks, credit card slips and other documents that you rely on at tax time to justify the amounts shown as income, deductions and exemptions on your tax returns. You should keep records for the past three years or so.

What could happen if the IRS disputes those figures after your death—and the necessary substantiating records are unavailable? The wealth that winds up with your heirs could be drastically diminished by assessments for additional taxes, interest charges and perhaps penalties. Ditto for any applicable state taxes.

Your letter of final instructions should also detail all your tax-deferred retirement accounts, such as 401(k)s and individual retirement plans. IRAs come in several flavors: traditional deductible, Roth and traditional nondeductible.

You might use your letter to remind your heirs of this difference: Like you, heirs have to pay income taxes on their withdrawals from traditional deductible accounts. Like you, heirs generally aren’t taxed on removals from Roth IRAs or the portions of withdrawals from traditional nondeductible accounts that are attributable to nondeductible contributions. These distinctions may be misunderstood or overlooked—and could end up costing your heirs dearly.

Julian Block writes and practices law in Larchmont, NY, and was formerly with the IRS as a special agent (criminal investigator). His previous blogs include Lost Items, Losing Interest and Capital Punishment. This article is excerpted from Julian Block’s Year-Round Tax Savings, available at JulianBlockTaxExpert.com. Follow Julian on Twitter @BlockJulian.

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Your Loss, Their Gain

A FEW YEARS BACK, a fellow named Wylie Tollette faced uncomfortable questions as he sat before the public oversight committee of the California Public Employees Retirement System (CalPERS). Tollette, the pension fund’s Chief Operating Investment Officer, was responsible for updating the committee on the status of its massive $350 billion portfolio.

But when a committee member asked about the fees CalPERS was paying to a particular group of investment managers, Tollette did not have a ready answer. “It’s not explicitly disclosed or accounted for,” he said. “We can’t track it.” CalPERS, the largest pension fund in the United States, was being kept in the dark by some of the money managers it had hired.

In his defense, Tollette noted that CalPERS was not alone in its inability to know what it was paying. “It’s an industry challenge,” he said.

It is indeed a challenge. Still, when you are trying to build wealth, it is critically important to understand and manage the fees that you are paying. According to multiple studies by the research firm Morningstar, fees are “the most proven predictor of future fund returns.” With that in mind, here are four steps you can take to audit your investment costs:

1. Check your mutual fund “expense ratios.” That represents the percentage of a fund that investment managers deduct to compensate themselves. For mutual funds holding domestic stocks, look for an expense ratio under 0.1% (that is, one-tenth of 1%), which is what the lowest-cost index funds charge. For a fund holding international stocks, expect to pay more, but no more than 0.15%. If a fund is charging much more than that, you want to be skeptical. You can find out a fund’s expense ratio on the fund company’s own website or at Morningstar.com.

2. Look for other mutual fund fees. A fund may also levy two other costs, both of which are cloaked in jargon and difficult to spot. The first is called a “12b-1” or “marketing” fee, which is included in the expense ratio and may explain why it’s unusually high. This is a fee that the fund company may pay to the advisor who sells you one of its funds. What makes these fees particularly distasteful is that they are not simply one-time commissions. Instead, they are subtracted from your investment every year.

The other type of fee to watch out for is called a “load.” This is similar to a 12b-1, except that it is a one-time payment. Unfortunately, however, loads can be sizable, eating up maybe 5% of your investment before you even get started. I would unequivocally advise against any fund carrying either of these fees.

3. Pay attention to “turnover.” This represents the percentage of a portfolio that is bought and sold each year. Whether you are looking at a mutual fund or at an advisor who manages a portfolio of stocks for you, turnover is important because it not only represents an additional investment cost, but also it can have a serious impact on your tax return, as winning investments are sold, triggering capital gains taxes.

If you look at a simple index fund like Vanguard Group’s S&P 500 fund, you will find turnover of perhaps 4%. Look at actively managed funds and you’ll often see turnover of 50% or 100%. If you are unsure of the tax impact of turnover, check your tax return or see if your accountant can help you.

4. Ask about “soft dollars.” If you work with an investment advisor, does the firm have any “soft dollar” arrangements with its brokers? Soft dollars are an opaque practice whereby a brokerage firm charges an investment advisor’s clients more to trade and the investment advisor then receives benefits in return, such as help paying for “research services.” The result is that you could end up—indirectly and invisibly—paying your advisor more than you realize.

Does all this sound like a lot of homework? If you want to hold down investment costs, here’s the best strategy: Opt for simplicity in your investment life. Yes, complex investments may pay off. But in my opinion, you put yourself in a much better position to succeed when you keep it simple.

Adam M. Grossman’s previous blogs include About That 22%, More for Your Money and First Things First . Adam is the founder of  Mayport Wealth Management , a fixed-fee financial planning firm in Boston. He’s an advocate of evidence-based investing and is on a mission to lower the cost of investment advice for consumers. Follow Adam on Twitter  @AdamMGrossman .

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USAFacts.org

I SPENT THE FIRST THREE YEARS of my college career pursuing a degree in journalism. Any time I submitted an assignment that had even a hint of my own opinion inserted into it, my advisor would sternly remind me to report “just the facts and only the facts.”

These days, it’s increasingly difficult to find a piece of journalism that doesn’t have a personal edge to it. Between fake news and political propaganda, the distance between fact and fiction feels like it’s narrowing. Finding unbiased information, especially when it comes to government spending and taxation, seems nearly impossible.

Thankfully, USAFacts.org—a website developed and financed by former Microsoft CEO Steve Ballmer—has come to the rescue. Ballmer started USAFacts after his wife Connie asked him to become more involved in philanthropic work. Unable to find easily accessible, unbiased information about government spending and revenue, he set about creating a nonpartisan website to provide this data to the public. The site provides volumes of information in an easy-to-digest graphical interface. Visitors can explore a multitude of data generated by the U.S. government in a way that’s completely devoid of opinion.

I regularly explore the website just to see how well my own perceptions mesh with the facts. Want to know if property crime rates have increased or decreased over the last decade? USAFacts will show you. Want to know whether the number of structurally deficient bridges in the country has increased or decreased since 1990? That’s there as well.

The diversity of data included on the site makes it easy to spend hours surfing around. Whether you want information about obesity rates, mortgage rates or the national volunteering rate, you can find the information on the site. Links to the sources used to generate the graphs, charts and reports on USAFacts are included on each page. Options to download data, or share the pages on social media, are readily accessible as well.

Kristine Hayes is a departmental manager at a small, liberal arts college in Portland, Oregon. Her previous blogs include Perking Up, Aiming High and Hidden Gems .

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This Week/Jan. 21-27

GET SPENDING MONEY OUT OF STOCKS. Calculate how much cash you’ll need from your portfolio over the next five years. That money should be out of stocks and invested in nothing more volatile than high-quality short-term bonds. You don’t want to be forced to sell stocks at depressed prices—and that could happen if your time horizon is less than five years.

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