Jonathan Clements's Blog, page 412

Worse Than Marxism?

IF YOU’RE WORRIED THAT INDEXING threatens the smooth functioning of the stock market, it’s helpful to spend an hour chatting over coffee with Charles Ellis—which is what I did last week when I was in New Haven, Connecticut. Ellis is one of indexing’s most eloquent advocates, including in his bestselling book Winning the Loser’s Game and in his latest tome, The Index Revolution.

Charley dismisses the idea that index funds are distorting the market—and scoffs at the idea that active management is headed for extinction.

Yet, if you listen to others, you could be forgiven for thinking otherwise. The commentary on the topic has verged on the hysterical. Last year, AllianceBernstein even put out a research paper that labeled indexing “the silent road to serfdom” and “worse than Marxism.”

The much-publicized fear: Index funds will come to dominate the market, allocating money to stocks based on their current market value—and without any thought to what shares ought to be worth based on outlook and valuations. The unspoken fear: The beat-the-market fantasy is finally dying—to the benefit of investors, but to the detriment of Wall Street bonuses.

Yet all the handwringing is hardly justified by the numbers. Even in the U.S., where indexing is all the rage, index mutual funds and exchange-traded index funds own just 12.4% of total U.S. stock market value. To be sure, institutional investors also index. But even if you include all forms of indexing, just 17.5% of global stock market value is held by index investors, calculates BlackRock, the investing powerhouse behind the exchange-traded iShares index funds.

Moreover, in terms of setting prices, what matters isn’t assets, but buying and selling—and active investors continue to trade far more than index funds. “The only way this falls apart is if the number of people playing the game goes down,” argues Ellis, who recently turned age 80.

He estimates that 60 years ago there were 5,000 investment managers worldwide trying to outperform the market. Today, he figures the number of money managers, economists and analysts picking over the global markets is probably closer to a million. “Is that number going up or down? As of now, it’s going up. It’s interesting work, it pays well and you can work well past 65. If it paid half as much, people would still want to do it.”

Indeed, while indexing has gained converts in recent decades, many folks are still convinced they can outperform the market averages. “Twenty years ago, people said indexing was communist and it was settling for average,” Ellis recalls. “They called it passive. I challenge you to find anybody who wants to be called passive.”

By contrast, he notes, “Active investing sounds like a good idea. If you called it doomed-to-failure, it would change people’s perceptions.”

Yet the vast majority of active investors are indeed doomed to fail. Logic guarantees it: Before costs, investors must collectively match the performance of the market averages. After costs, most investors will inevitably lag behind.

Sure, a few active investors succeed—but it’s become much tougher, thanks to increasing market efficiency. Ellis notes that institutional investors account for 99% of all U.S. stock trading, up from 9% six decades ago.

“Every time you want to buy a stock, you have to buy from a person who is just as well informed, just as well educated and has just as much computer power,” he points out. “To win, all you have to do is beat a competitor who has everything you have.”

Moreover, to post market-beating returns, you have to overcome costs that might run 2% of assets per year, comprised of a 1% management fee and 1% trading costs. The latter includes market impact costs. As money managers ease out of stock positions, they push down the price of stocks they’re trying to sell, while their own buying drives up the price of stocks they’re looking to accumulate.

Wall Street frames such investment costs as a percentage of assets, which makes them seem relatively modest. Ellis prefers to think of costs as a share of likely long-run U.S. stock returns, which might average 6% or 7% a year. “It’s 2% of the assets, but it’s 2/6th or 2/7th of the return,” he says.

But what if you stick with managers who have performed well over the past five or 10 years? “People try to buy the past all the time, but it can’t be done,” Ellis says. “Anybody who has done well will likely be the recipient of substantial sums of money.”

That money has two insidious effects. First, managers get paid more—and they lose some of the hunger for success that powered their earlier triumphs. Second, they get more money to manage. “You get flooded with assets, which pushes you into the more efficient part of the market”—the big, blue chip stocks in the S&P 500. Result: A money manager’s chances of outperforming the averages grow even slimmer. Indeed, among stock mutual funds that rank in their category’s top 25% over any five-year period, less than a quarter manage to stay in the top 25% over the next five years—worse than you would expect based on chance alone.

Follow Jonathan on Twitter @ClementsMoney and on Facebook.

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Salt in the Wound

THE TAX LAWS SEVERELY RESTRICT deductions for losses claimed by individuals whose homes, household goods and other properties suffer damage or are destroyed due to events that, in IRS lingo, are “sudden, unexpected, or unusual.”

In many cases, the allowable write-offs turn out to be shockingly smaller than anticipated. Furthermore, those with high incomes and low losses will find they can’t claim any deductions. What follows are answers to some often-asked questions.

What are the usual restrictions on writing off casualty losses?

For starters, individuals who use the standard deduction forfeit write-offs for losses. To claim them, they must itemize. The big barrier: Losses (after they’re reduced for insurance reimbursements and $100 for each casualty) are allowable only to the extent that the total amount in any one year surpasses 10% of a taxpayer’s adjusted gross income.

Let’s say Tess Tracey anticipates a 2017 AGI of $100,000. After subtracting $100 and insurance recoveries for damage to her dwelling, she estimates a deduction of $11,000. But recall she can’t claim any deduction for the first $10,000 (10% of $100,000), thereby shrinking her allowable deduction to just $1,000. If her AGI surpasses $110,000, none of the $11,000 is deductible.

In which tax year are losses deductible?

While the IRS usually allows deductions only for the year in which losses occur, it authorizes an exception for losses occurring in disaster areas eligible for federal assistance. Qualifying taxpayers are able to apply their disaster deduction to either 2017, the current year, or 2016, the previous year, whichever is more advantageous. There’s a benefit to selecting the previous year: a quicker refund. That may provide needed cash for repairs or replacements. It’s a no-no to split a deduction between two tax years.

Legislation enacted in September relaxes the rules for deducting certain disaster-related losses. The new rules boost allowable write-offs for many millions of victims of August’s back-to-back hurricanes, Harvey and Irma.

The revisions permit those affected to claim their entire loss, not just the portion that exceeds 10% of AGI. The new rules include a minor tweaking that increases the $100 floor to $500. And no longer is tax relief available only for itemizers. Even those who opt for the standard deduction are able to claim disaster losses. In the run-up to the 2018 midterm elections, our lawmakers may decide to introduce similar solace for, among others, victims of fires in California.

Is there a tax break when disaster-related losses exceed income?

Yes. Filers need to familiarize themselves with the complex, often-overlooked rules for personal net operating losses (NOLs). These rules allow the application of unused excess deductions to recover or reduce taxes paid in other years.

This means it’s okay to take unused write-offs as additional deductions for the three prior years and for the following 20 taxable years (so-called carryback and carryforward in IRS speak). Alternatively, there’s the option to forego the entire carryback and just carry forward the excess amounts for up to 20 years, unless they’re used up sooner.

An example: Affluent Alice Adams abides in a pricey place that’s completely destroyed by hurricane Irma. Like her neighbors in their exclusive enclave, Alice has an insurance policy that specifically omits coverage for hurricanes. Accordingly, Alice’s six-figure loss exceeds her five-figure income.

Alice has IRS’s blessing to apply 2017’s unused excess deduction to reduce taxes for the years 2014 to 2016 or apply them to trim taxes for the next 20 years. The law permits her to avail herself of both options. She should seek the help of a qualified tax professional, as the rules are complicated, particularly the ones for carrybacks and carryforwards.

Is this the last hurrah for deducting casualty losses? The Republican House and Senate tax bills would repeal write-offs for most itemized deductions, including most casualty losses. If enacted, the repeal would take effect starting with returns for the 2018 tax year, which will be filed in 2019.

Julian Block writes and practices law in Larchmont, N.Y., and was formerly with the IRS as a special agent (criminal investigator). His previous blogs include Too Late, This Year or Next and A Year for Generosity. Follow Julian on Twitter @BlockJulian and learn more about him at JulianBlockTaxExpert.com.

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My $88,000 Nightmare

THE YEAR 2011 was horrifying. I learned my Mom had a life-threatening disease. She passed away six months later.

That forced me to confront the $88,000 of debt I had accumulated during college, including $51,000 in credit card debt. I was in grief, I had no idea what to do about the debt and my Mom wasn’t there to advise me.

My friend John told me to seek professional help. A debt settlement company helped me get rid of $16,000 of higher-interest credit card debt, but I needed to tackle the rest on my own.

John suggested I use the snowball method: Get rid of the smallest debt first by paying extra, while making the minimum payment on the rest. Once the smallest debt is paid off, I used the financial breathing room to focus on paying the next smallest, and so on.

How did I end up with so much debt? It was easy. If you use credit cards randomly and avoid making the payments, you will quickly end up with too much debt, just like me. But while accumulating debt was easy, getting rid of it was far more difficult.

I had no savings, except the house that my Mom left me. I was determined not to lose the place where I have so many memories of my Mom.
I had to transform myself from a spendthrift to a frugal person. I was a pampered child of a single Mom who always fulfilled my wishes. I never realized the importance of living a disciplined financial life.
I sold the expensive car I had bought in college and used the proceeds to pay off the car loan.
I had a fulltime job and started blogging part-time to earn extra money. I used the additional money I earned through freelancing to make bigger debt payments. I also rented out the garage after I sold the car.
I created and followed a budget for all expenses. I had to make financial needs a priority and cut out all financial wants, like eating out, trips, Starbucks, fancy parties and hanging out with friends. I was determined not to amass further debt.

After three-and-a-half years, I was free of credit card debt. I still have student loans, but I’m paying them off gradually. Most important, I sleep peacefully—and I no longer worry about calls from creditors.

Amy Nickson is a writer in Atlanta, Georgia. She has her own blog, writes for the Oak View Law Group and also contributes to other sites. Follow Amy on Twitter @AmyNickson86.

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Courtside Seat (Part II)

EVERYTHING I KNOW ABOUT PERSONAL FINANCE I learned in court. As part of my law practice, I represent individuals in estate, trust, and probate disputes. Many of these cases have common themes that teach important lessons about personal finance—lessons that aren’t covered in the usual commentary about saving for retirement, paying off credit card debt, and so on. In particular, six crucial lessons stand out.

Lesson No. 1: Know where your assets are. Over a lifetime, we can accumulate bank and investment accounts at various firms, as well as retirement accounts from a variety of past employers. Other illiquid assets, such as cars, collectibles, real estate, and partial ownership of a family business, are often part of our accumulated wealth. I am regularly amazed at how many people have no idea what assets they have, where they are located, or how they’re titled.

Lesson learned: Organize your assets so that they are easily accessible—and, more important, understandable—by not just you, but also your executor after your passing. Consider consolidating accounts at one bank or investment firm. Create an inventory of what assets you have and where they are located. Make a list of electronic access codes—usernames and passwords—for your online accounts. 

Lesson No. 2: Wills and trusts are not just for the wealthy. A properly written will specifies what happens to assets that are subject to probate. It ensures that these assets are distributed as you intended. If you have minor children, a will should also direct who should be their guardians, and who will manage any money or property left for their benefit.

Meanwhile, a trust can help ensure that your assets are managed by a trustee of your choosing. It can make sure your money is properly used for the support of the beneficiaries you identify, such as minor children, adults with special needs, and adult children who might not be able to properly manage money.

Lesson learned: If you don’t have a will, state law will direct how your assets are distributed. Each state’s laws are different. These laws provide for a set distribution hierarchy that generally makes intuitive sense—for example, first to the spouse and children, then to grandchildren if no surviving spouse or children, then to parents of the deceased, and so on.

Rather than leaving your assets to be distributed according to a state formula, wouldn’t you rather have your assets distributed as you want? And, if appropriate, wouldn’t you want the opportunity to create a trust and put in place a trustee you select to manage assets for the benefit of beneficiaries you choose?

Lesson No. 3: Check your beneficiary forms. Many assets pass outside probate, including life insurance and retirement accounts for which a beneficiary has been designated. When was the last time you reviewed those beneficiary forms to make sure they reflect your wishes? Will your ex-spouse get $1 million in life insurance proceeds because you neglected to change the beneficiary after your bitter divorce? Has a later born child or a stepchild been inadvertently omitted as a beneficiary of your 401(k) or rollover IRA?

Lesson learned: Regularly review all insurance policies, annuities, and bank, retirement, and brokerage accounts, to ensure that the beneficiary designations reflect your current wishes. Be sure to have your accountant or estate planning attorney evaluate whether there are any tax consequences resulting from your beneficiary designations.

Lesson No. 4: Carefully evaluate who is best suited to be executor of your estate and trustee of any trusts. Many people simply default to picking the oldest child, the child who is a lawyer or accountant, or the child who seemingly has the most business sense. Others choose their lawyer, accountant, or financial advisor. None of those choices is necessarily improper.

Still, ask yourself: Will you accentuate or foment sibling rivalry by choosing one child to be executor or trustee? Does the person selected have the honesty, diligence, and competence to manage financial and other assets? You will be doing your heirs no favors if you choose the wrong person and they end up in expensive legal disputes because assets were mismanaged, wasted or—in a worst-case scenario—stolen.

Lesson learned: The selection of an executor for your estate, and the trustee of any trusts, is a critical component of your financial and estate planning.  Does the person have the skill set—not only technical skills, but also people skills—to faithfully execute this position of trust? While it adds a layer of cost, a professional corporate trustee—such as a bank’s trust department or an independent corporate fiduciary—is sometimes the best solution.

Lesson No. 5: What does your power of attorney say and who holds it? A power of attorney (POA) lets somebody act on your behalf if, say, you’re incapacitated. It has sometimes been referred to as “the most effective burglary tool since the crowbar.” A general POA gives the holder (the agent) broad powers to do almost anything the person granting the POA (the principal) could do.

Common abuses include selling, transferring, gifting, or mortgaging the principal’s assets and property; changing beneficiary designations for life insurance, retirement accounts, or investment accounts; and defeating or impairing the principal’s estate and tax planning by selling, transferring, encumbering, or gifting assets that were intended to be given to a specific recipient.

To protect yourself, ponder how each POA power could be abused. Consider appointing one or more co-agents who must unanimously consent to any action taken under the POA; limit the powers only to certain acts or transactions; and require prior notice to heirs, beneficiaries, or independent professional advisors before certain financial transactions are made.

Lesson learned: Before granting a power of attorney to anyone, understand the scope and extent of the powers you are giving. Will the person or persons who hold the POA only exercise the power in your best interest?  Consider spelling out the agent’s duties and responsibilities, such as keeping the principal’s property separate from that of the agent; keeping a contemporaneous record of each transaction; limiting gifting powers; requiring proper title for accounts and property; and prohibiting the agent from engaging in “self-dealing” or conflict-of-interest transactions.

Lesson No. 6: Communicate, communicate, communicate. In the cases I litigate, it is often clear that a major precipitating factor is the failure to communicate. It might be a failure by the deceased to explain his or her plans before death, or a failure by the executor or trustee to communicate with heirs or beneficiaries.

Talking with family members about our money makes most of us uncomfortable. Discussions about what will happen to our assets at our death are even more difficult. But it is often better to discuss these matters now. After your death, you don’t want beneficiaries surprised and disappointed at their inheritance. You don’t want a sibling, uncle, lawyer, or accountant thrust into the role of executor or trustee without much knowledge of what the role entails. And you especially don’t want this happening at a time when all are grieving.

Lesson learned: After a loved one’s death, disputes often arise when beneficiaries learn that an inheritance isn’t what they expected. Candidly explaining the rationale for your estate plan—why there are unequal distributions among children, why assets are to be placed in trust, or why the majority of the estate was left to charity—can often reduce the legal jousting that might otherwise occur after your passing. Similarly, executors and trustees will greatly reduce the risk of disputes if they are candid and transparent with heirs and beneficiaries.

Robert C. Port is a partner with the Atlanta law firm of Gaslowitz Frankel LLC . He is fascinated with understanding how people deal with and manage money, especially the emerging field of behavioral finance. When not in a courtroom or before an arbitration panel, he prefers to be cycling, skiing, hiking, or swimming. His previous blog was Courtside Seat. This blog post is for informational purposes only, and should not be relied upon as—and does not constitute—legal advice. You should not act upon any information in this blog without first seeking legal counsel from someone licensed to deliver advice in the relevant jurisdiction, and who understands your individual facts and circumstances.

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This Week/Dec. 10-16

INVESTIGATE A REVERSE MORTGAGE. Once retired, borrowing against your home’s value shouldn’t be a first choice, but a last resort. Still, it’s helpful—and comforting—to know what that last resort might be worth. To that end, try the calculator at ReverseMortgage.org. Pay attention not only to the money you’ll receive, but also to the hefty fees you will incur.

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Crisis? What Crisis?

THERE ARE CERTAIN HALLMARKS of financial rectitude: Never carrying a credit card balance. Maxing out the 401(k). Having an emergency fund. But do these habits deserve the sacrosanct status they’ve achieved?

You won’t find me arguing with paying off the credit cards each month or putting at least enough in a 401(k) plan to earn the full matching employer contribution. Both make ample sense. But in the past, I’ve raised questions about how much emergency money people need and how they should handle this money. Every time, I get an earful from readers, alarmed by my financial sacrilege.

I recently stumbled into this controversial territory again, when I suggested that—once retired—folks may not need an emergency fund. Has the man gone completely mad? At the risk of further inciting readers, let me offer three contentions.

1. An emergency fund is really an unemployment fund. If we’re out of work for an extended period, we could easily run through tens of thousands of dollars, which is why the standard advice is to keep emergency money equal to three-to-six months of living expenses. What if we’re retired? Unemployment is no longer a risk, so an emergency fund may be unnecessary.

But what about the other emergencies that people cite—things like replacing the roof, repairing the car, needing nursing home care and paying large medical bills? I’d argue that either these things aren’t true emergencies or the potential financial damage isn’t all that great.

For instance, we know the roof will need replacing at some point, so it isn’t really an emergency expense. Rather, it’s a known upcoming cost and we should simply save the necessary money. Similarly, we ought to have a plan for nursing home costs before we quit the workforce. That plan might involve paying out of pocket, perhaps with help from long-term-care insurance. Alternatively, we might accept that we’ll deplete our assets and then fall back on Medicaid.

What about a car repair? It ought to cost less than $1,000 and, if it’s more, it probably means we had an accident, at which point insurance should kick in. Ditto for medical bills. They should be largely covered by insurance. Indeed, as we ponder how much cash we need easy access to, we should give some thought to deductibles, elimination periods and maximum out-of-pocket expenses on our various insurance policies. For instance, under the Affordable Care Act, the 2018 maximum out-of-pocket expenses on a health insurance policy are $7,350 for an individual and $14,700 for a family.

2. Emergency money is typically dead money. It sits in a money-market fund or savings account, earning an after-tax interest rate that is typically below the inflation rate. This is not a desirable situation—which means we should carry as little emergency money as we can get away with.

To that end, we should focus not on how much cash we ought to hold, but on how much we need access to. For instance, if we have a $100,000 home equity line of credit, we may be comfortable holding far less emergency money.

Because emergency money typically earns such a low rate of return, I also question conventional wisdom, which argues that building up a large emergency fund should be the top priority for young adults entering the workforce. At that juncture, we typically have modest salaries, but a wonderfully long time horizon. Wouldn’t it be better to focus instead on funding retirement accounts, thereby getting long-term compounding working to our advantage?

If young adults later find themselves unemployed, they could always pull their original contributions out of their Roth IRA, with no taxes or penalties owed. They could even cash in their 401(k). Sure, that would trigger taxes and penalties. But if the 401(k) had paid an employer match, often folks will still come out ahead financially.

3. A separate emergency money may be unnecessary. As our wealth grows, we’ll likely accumulate other savings in our taxable account. Let’s say our taxable account holds $100,000 that we’ve earmarked for retirement.

Do we really need a separate $20,000 for emergencies? If we lost our job, why wouldn’t we just dip into the taxable account jar we’ve mentally labeled “retirement”?

True, that retirement money might be invested entirely in stocks and, when we need to sell, those stocks might be in the midst of a bear market. But even as we sell stocks at depressed prices in our taxable account, we could shift an equal sum from bonds to stocks within our retirement account. Result: We would maintain our portfolio’s stock exposure—and effectively sell bonds to pay for our emergency.

Follow Jonathan on Twitter @ClementsMoney and on Facebook.

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Hidden Gems

AS AN OBSESSIVE ORGANIZER, I like having everything tidied up before the start of the new year. I spend considerable time reviewing my finances and making sure my retirement plan is on track. As I was filling out my financial notebook this year, I added a new section: a list of lesser-known “benefits” I’ve recently discovered and intend to use more frequently in future.

For instance, after publishing a blog post about car ownership, a HumbleDollar reader suggested my insurance company might provide a more reasonably priced roadside assistance program than my current AAA coverage. A quick email to my agent revealed that I could indeed get roadside assistance added to my current policy for just over $10 per year—a savings of nearly $50 compared to AAA.

When I wrote about earning credit card rewards, it prompted me to take a closer look at the benefits included with my card of choice: the Costco Citi Visa. I discovered I have access to the card’s price rewind benefit. If I purchase an item using my Citi card and it goes on sale within 60 days, I can receive a refund of the price difference. I also discovered my card provides me with extended warranty coverage on many purchases, as well as rental car insurance.

Earlier this year, when I decided it was time to come to grips with estate planning, I contacted the employee assistance program available through my job. I was able to get a simple will, as well as medical and financial powers of attorney, drawn up for $150. In addition to offering legal referral services, the program provides other benefits, ranging from financial coaching to discounted gym memberships.

Amazon continues to impress me with the number and variety of perks included with its Prime membership program. In addition to getting access to thousands of television shows, movies, books and songs, Amazon now offers a 2% rewards program for members who reload their gift card balances using a checking account. The program is currently offering a $10 bonus for members who reload their gift card accounts with $100.

I frequently take advantage of Amazon’s free two-day shipping for Prime members, but recently I’ve had two instances when an item didn’t show up on the day it was promised. Both times, I sent a quick email to Amazon’s customer service department to tell the company about the delay. I was rewarded for my efforts with a one-month extension of my Prime membership for the first incident and a $10 Amazon credit for the second.

Kristine Hayes is a departmental manager at a small, liberal arts college in Portland, Oregon. Her previous blogs include Keeping It Private, A Rewarding Experience and Driving Down Costs .

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Odd Couple

THEY SAY OPPOSITES ATTRACT. In many ways, this is true of my husband and me. When we met, I was very frugal. My husband was on the other end of the spending spectrum. But we’re still together 21 years later—and we have managed to make this work in a way that’s been good for both of us.

We both well remember that first visit to the grocery store. Before we moved in together, I would go down the aisles with coupons in hand, looking for the best bargains to be had. My goal was to exit the store as quickly as possible with only the items on my list.

On my first visit with my future husband, however, shopping for sale items wasn’t necessarily on the agenda. The perusal of the shelves struck me as painstakingly slow. My husband enjoyed the journey down each aisle, plucking items off the shelves, regardless of cost. He especially enjoyed the hunt for new products. It became clear, after a few joint visits to the grocery store, that it was best for me to stay home.

Fast forward to two decades later, and you will see how we have both changed. There was never a time when we sat down together to discuss money management. It just evolved over time. Nor was there ever a confrontation. We were disappointed with one another, him toward me for not wanting to spend the money on something I really wanted, and me toward him for coming home with yet another piece of art pottery. Now that we are in the third decade of our relationship and we have moderated our spending habits, combining finances would be fine. But it was clear that doing this at the beginning, as we settled down to living together, would probably not have been a wise move.

My purse strings have loosened over time, especially in recent years. I have noted in earlier blogs that, while I remain reluctant to buy material goods, I increasingly find happiness in using my money for experiences enjoyed with family and friends, such as dinners out and travels through Mexico. In addition, I am more inclined to spend on myself. Cycling is a passion and I don’t have much hesitation in buying what I need to enjoy the sport. Meanwhile, my husband has reined in his spending. New pieces of art pottery no longer magically appear on the walls or shelves. He has now managed to build a retirement nest egg that, along with Social Security and his pension plan, should ensure he can sustain his current spending habits for the rest of his life.

I recall a moment a few years ago when I was visiting my in-laws. While I was resting one afternoon, my father-in-law came into the room. I could see that something was on his mind. He proceeded to thank me for helping his son better manage his money. It was true, I had encouraged him to control his spending and put away money for retirement. But for the most part, we both learned to manage our money better simply by watching the other.

Nicholas Clements is one of Jonathan’s older brothers. He is retired and lives just outside Washington, DC. His previous blogs include Hunting for Happiness and Help Wanted . Follow him on Twitter @MDScaper .

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This Week/Dec. 3-9

LOOK FOR INSURANCE GAPS. Many folks agonize over whether their policies are too large or small. A bigger danger: Not having coverage at all, because your life has changed but your insurance hasn’t kept up. Just had kids? It’s time for life insurance. Grown wealthy? Consider umbrella liability insurance. Started working for yourself? You may need disability coverage.

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December’s Newsletter

IF A PICTURE IS WORTH a thousand words, what would our finances look like over the course of our lives? Unfortunately, I have no talent when it comes to drawing. But when I imagine an idealized financial life, I conjure up a chart with five lines. In HumbleDollar’s latest monthly newsletter, I describe those five lines—and discuss when folks might follow a different path.

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