Jonathan Clements's Blog, page 69

Ranking Colleges

I'VE TAUGHT BEHAVIORAL economics, which holds that even our most important decisions are influenced by unrecognized biases. For my students, there’s no better example than the choice of where they went to college.

Although the cost is enormous, the decision of where to go hinges on the smallest things. A teenager who says, “I want to be close to my boyfriend,” will zero in on a nearby college, even if her high school romance is fading. The opposite impulse—to go far away—led my brother from New Jersey to attend college in Los Angeles.

After my children toured colleges, we didn’t hear anything about the number of students who go on to get graduate degrees or the percentage of students who graduate in four years. Instead, we heard about the elegant ballet flats the tour guide had worn, or how cool it would be to attend a city school.

When faced with a difficult decision, people tend to ask themselves an easier question and answer that one instead. We usually don’t notice this substitution and later tell ourselves that we considered our options carefully.

Because America is full of great colleges, little harm is done by such decision-making shortcuts—until the bill comes due. Those who borrowed to attend their dream school can find themselves drowning in debt, unable to pay both their student loans and their rent.

When I enrolled at the University of Rochester in 1974, it cost $4,000 a year. Tuition, room and board now exceed $80,000. Wages have risen at a far slower pace than the 20-fold increase in college costs. Many students realize too late that the central question at the heart of their college decision is, “Can I afford this given the salary I’ll earn afterward?”

That’s a hard question to answer, especially for 18-year-olds. That’s why parents of college-bound seniors may want to consult The Wall Street Journal’s 2025 college rankings published this month. It gives extra weight to financial outcomes, particularly how much a school “boosts a student’s salary beyond what they would be expected to earn regardless of which college they attended.”

Viewed through this return-on-investment lens, some unfamiliar names rose to the top. Business- and technology-focused schools like Babson, Claremont McKenna, Georgia Institute of Technology and Davidson all broke into the top 10 colleges in the nation. Bentley University, Lehigh University, San Jose State and Virginia Tech landed in the top 20.

That’s quite different from the U.S. News & World Report rankings, issued this September for the 40th year. By now, many schools have gamed the U.S. News rating systems to raise their standing. No less of an authority than U.S. Education Secretary Miguel A. Cardona said, “It's time to stop worshiping at the false altar of U.S. News & World Report. It's time to focus on what truly matters: delivering value and upward mobility.”

The Journal seems to be trying to do that. Still, it’s wise to view any ranking system with skepticism. The Journal’s algorithm does produce some head-scratching results. The college where I taught, St. Joseph’s University in Philadelphia, is ranked No. 42 nationally, ahead of Duke (No. 45) and Dartmouth (No. 57). St. Joe’s may be benefitting from the extra credit given to schools that create upward social mobility, helping students to rise above where they started in life.

The Journal estimated that St. Joe’s added $51,405 per year to a typical graduate’s salary and cost $31,894 a year after scholarships and discounts. At this rate, St. Joe grads would need an average of just two years and five months to repay their student loans, according to the Journal, provided they used only the extra pay that their degree added to their wages.

Compare this to Savannah College of Art and Design, No. 431 in the Journal’s rankings. Savannah added $17,274 a year to the average graduate’s salary but cost $44,790 a year to attend. It would take Savannah grads 10 years and four months, on average, to pay off their student loans using only the extra pay conferred by their arts degree, according to the Journal’s calculation.

What should we make of the Journal’s ranking? Is St. Joe’s really a better school than Duke? Certainly not in basketball. The Journal’s system is still on its shakeout tour, I suspect. That said, a contrary view—even when flawed—can open the eyes of high school seniors to a wider array of colleges.

When making a difficult decision, behavioral economists advise us to place one hand on the data. Seeing how others have fared when making a similar choice can disrupt our tendency to make snap decisions.

Psychologist Daniel Kahneman said data can provide us with “the outside view.” In this case, the outside view might disrupt the tendency to fall in love with a college based only on the campus tour. Kahneman called that kind of decision-making “the inside view,” and wrote that it’s based on WYSIATI—what you see is all there is.

Greg Spears is HumbleDollar's deputy editor. Earlier in his career, he worked as a reporter for the Knight Ridder Washington Bureau and Kiplinger’s Personal Finance magazine. After leaving journalism, Greg spent 23 years as a senior editor at Vanguard Group on the 401(k) side, where he implored people to save more for retirement. He currently teaches behavioral economics at St. Joseph’s University in Philadelphia as an adjunct professor. The subject helps shed light on why so many Americans save less than they might. Greg is also a Certified Financial Planner certificate holder. Check out his earlier articles.

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Retiring Smarter

A RECENTLY RELEASED book titled How to Retire is a goldmine for those in or near retirement. For the book, Christine Benz—Morningstar’s director of personal finance and retirement planning—conducted interviews with 20 experts, covering every aspect of retirement.

The result is a valuable field guide for those tackling life after work. Below are seven insights I found particularly useful.

1. Social connections. When we think about retirement planning, most of us tend to think first about the numbers. “Do I have enough? Am I on track?” These are certainly important questions. But one of the book’s experts, Michael Finke, points out that they’re just part of the equation. Finke argues that it’s equally important to be investing in social connections during our working years. That’s because isolation—unfortunately—can be a reality for some retirees after leaving the workplace’s built-in social network.

Where retirees choose to live is also critical. Finke cites research that found that folks tend to be happier living in their own homes—but only for a time. “Once they hit their 80s,” he says, “people who live in apartments are actually happier.” Everyone is different, of course. The key lesson: Retirement planning requires more than just making the numbers work. We also need to plan how and where we’ll spend our time.

2. Retirement styles. I recall meeting with a couple who were on the cusp of retirement. When it came to the question of investment strategy, the husband was quick to respond: “Let’s go with 100% stocks.” They could afford the risk, he argued.

His wife countered that they should go with 100% bonds, reasoning that they didn’t need to take any risk. While they were able to find a middle ground, this highlighted a reality of retirement planning: There’s more than one right way to build a plan—and people differ on the best approach.

Some like managing their own portfolio and are comfortable with market risk. Others, meanwhile, would prefer the guaranteed income offered by an annuity and don’t mind the limitations they impose. To help retirees better understand their personal preferences, researcher Wade Pfau has developed an assessment he calls “Retirement Income Style Awareness.” The idea is to help couples like the one I described understand both the range of options, as well as their own preferences, before they set out to make a plan.

3. Safe withdrawals. You’ve most likely heard of the “4% rule.” Based on research by advisor William Bengen, this is a guideline for setting a sustainable withdrawal rate from a portfolio. It’s intended to minimize the chance a retiree would run out of money.

But researcher Jonathan Guyton notes that the 4% “rule” was never intended as a rule. Because it was designed to be a “set it and forget it” strategy, it’s overly conservative, he says. “It’s designed to work even if you get a worst-case scenario” in the market. But since worst-case scenarios occur only in a minority of time periods, most retirees should be able to spend more than 4%.

That’s why Guyton recommends an alternative to the static 4% approach. His “guardrails” strategy allows retirees to adjust their spending from year to year as the market rises and falls. The bottom line: The 4% rule can be useful for a back-of-the-envelope reading on retirement readiness, but it’s not a complete answer.

4. Believing the numbers. Author Morgan Housel has observed that compound interest—a powerful force in finance—doesn’t lend itself to easy computation. If you have to calculate, “eight plus eight plus eight plus eight,” Housel says, the math isn’t difficult. But if we had to compute “eight times eight times eight times eight,” he says, “your head's going to explode.” The math, in other words, isn’t intuitive.

This has always presented a challenge in financial planning, but author JL Collins provides a further insight. Compounding “is like a hockey stick,” he says. “It goes along slowly and then spikes.” That’s a good thing, of course, but it does present a pitfall. Collins describes a discussion with a woman who, like many people in recent years, had benefited from the market’s hockey-stick-like growth. She had a problem, though: Even though she could see the numbers, “she couldn’t quite believe them.”

It’s an interesting dynamic and fairly common. After decades of saving, plus strong market gains, many people have a hard time shifting gears from saving to spending. That’s why I recommend sketching out long-term projections that include various stress tests.

5. When to stop playing the game. William Bernstein, author of The Four Pillars of Investing, coined this well-known personal finance motto: “If you’ve won the game, quit playing.” If you’ve achieved financial independence, in other words, don’t unnecessarily jeopardize it. Instead, invest conservatively.

But Bernstein explains that this advice was intended only for “the median retiree.” Someone with more substantial savings can certainly take more risk. Folks with modest 2% or 3% withdrawal rates, he says, “are not drawing down enough of their assets to get into trouble.” It’s an important point. As a retiree’s asset base grows, the range of suitable asset allocation choices broadens. The advice to “quit playing” is important—but only in some cases.

6. Understanding history. A theme that runs through many of the interviews in this book is the importance of studying history. Bernstein, for example, explains why stocks tend to be a good hedge against inflation. He cites the Weimar Republic during the interwar era in Germany: “When prices increased there by a factor of one trillion, you actually were able to earn a positive real return.”

Elsewhere, Bernstein notes a little-discussed risk in owning an annuity: the risk that the insurer might fail. “I don’t think anyone should soft-pedal that,” he says, citing the 1991 failure of Executive Life Insurance as an example. It left policyholders with more than $4 billion in losses.

7. Setting an allocation. You may be familiar with the “bucket” approach to asset allocation. With this strategy, the size of a retiree’s bond portfolio is set in proportion to his or her withdrawal needs. Suppose a couple requires $100,000 per year from their portfolio. They might set aside $500,000 or $700,000 in bonds—enough to weather a five- or seven-year downturn in stocks. The remainder of the portfolio could then be invested in stocks, and the result would be a simple stock-and-bond portfolio.

But as Christine Benz points out, we shouldn’t overlook the value of cash. She recommends a separate cash bucket containing one or two years’ worth of expenses. Why hold cash, especially with rates falling? Benz points to 2022, when both stocks and bonds declined: “A retiree with cash on hand could have used those funds to provide spending money.” Holding cash, in other words, might feel inefficient, but it can serve an important role.

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.

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My Spending Rules

HERE'S A FINANCIAL topic on which I claim scant expertise: spending. Still, I’ve belatedly been getting a lot of practice.

Over the past four years, I’ve spent more freely than at any time in my life. While part of it might be explained by post-pandemic splurging, mostly it’s because I finally convinced myself that I had more than enough saved for retirement. Added to that has been my recent cancer diagnosis, which has prompted Elaine and me to take our spending to a whole new level, as we attempt to cram a retirement’s worth of travel into the limited time I have left.

I can’t claim to be entirely comfortable with all of this. To counter my unease, I fall back on seven rules that—I hope—will make my spending less impulsive and more thoughtful.

1. The dollars that bring the greatest happiness are those we don’t spend. If we don’t have enough set aside in a bank or investment account to feel financially secure, we’ll suffer ongoing money stress, and the stuff we buy likely won’t come close to compensating. How much do we need to feel safe? The sum will differ for each of us. For me, today’s amount is considerably larger than it was when I was in my 20s and 30s, and more oblivious to risk.

2. Lower fixed costs mean fewer financial worries. Want to stress less about money? The two key steps, I believe, are not only keeping at least a little money in cash investments, but also holding down fixed living costs such as mortgage or rent, utilities, insurance premiums, property taxes and so on. The lower these costs relative to our income, the more financial breathing room we’ll have.

3. Don’t spend under the influence. We might think we’re independent thinkers who make clear-eyed purchase decisions based on our own unique personal preferences. The reality: Our consumption choices are often heavily influenced by corporate marketing, what our friends purchase and how our parents spent when we were growing up.

For instance, my father loved to eat out, and I think I’ve long been influenced by his behavior. Indeed, in the four years since I moved to Philadelphia, Elaine and I have tried many of the city’s finest restaurants. But now, I’m wondering whether I’m suffering from restaurant fatigue—because I’m just as happy when we sit in the park, eat a takeout salad and surreptitiously drink a bottle of wine.

4. Ponder pleasure per dollar spent. Just as our inexpensive dinners in the park deliver as much happiness as pricey restaurant meals, the pleasure from other small purchases is often disproportionately large relative to the price tag.

For example, while I continue to be wowed by the six-figure remodeling project we undertook last year, I can’t claim that the happiness I’ve received has been proportional to the cost. Yes, the cumulative pleasure might be 1,000 times greater than that from a takeout pizza—but, let’s face it, the pizza would only cost $20.

5. Looking forward. I like to book our vacations far in advance. Why? With the help of the internet, I enjoy researching countless possible trips and, along the way, I get to take all kinds of wonderful vacations in my head. And once we settle on a destination, there’s the chance for months of eager anticipation, which is often almost as much fun as the trip itself.

6. A gradually rising standard of living is a great pleasure. For our December flight to London for my son’s wedding, I booked us seats in premium economy—a marked improvement over regular economy, where I tend to sleep fitfully and arrive feeling wretched. Premium economy is the small luxury I’ve allowed myself in recent years for overnight flights to Europe. After all those decades in economy, it feels like a huge improvement.

After I booked our London tickets, I noticed on the British Airways website that I could upgrade us to a flatbed for $1,064 apiece. My younger self would have considered that an unthinkable extravagance. My older self jumped at the chance. Okay, maybe not jumped. But my dithering over the decision probably only lasted 10 minutes.

7. Giving can be as satisfying as spending. Given my diagnosis, I could spend with reckless abandon—and I certainly shouldn’t be fretting over a $1,064 flatbed. But every dollar I spend is a dollar that won’t go to Elaine and my two kids, and that’s more important to me than my own comfort. Whether it’s family, friends or charity, there’s great pleasure in being generous with our time and money—a pleasure that outweighs and outlasts anything I can imagine buying.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.

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My Inheritance

WE'VE ALL HEARD of the obscure relative—often a long-forgotten uncle or aunt—who leaves behind a surprise inheritance. This usually only happens in fairy tales, trashy novels and screwball comedy movies. I certainly never expected it to happen to me, especially at this late stage. But happen it did—from my lifelong friend Katie, who bequeathed me a generous sum.

I learned I was a beneficiary from the will’s executor and from a subsequent letter from the attorney handling the estate. I was happy that my friend held me in such high regard, but the news was also a reminder that I’d lost someone dear. On top of that, there was a feeling that I didn’t do anything to deserve the money, other than to have enjoyed a wonderful friendship.

Had I received the money in my younger days, I could have helped family members in so many ways. I think of my mother’s struggles and wonder why I was given this largesse so late in life.

With Katie gone, there’s now no one left to share the old days with—so many good memories, including those of our parents. Although our mothers were true friends, people were not overly familiar with each other in days of yore. Throughout their friendship, our mothers addressed each other as Mrs. followed by their surnames. Thinking back, it all seems sweet, respectful and quaint. Refinement was a quality ladies aspired to—it was a different time.

Katie used to say that we’d had a connection before we were born. Our mothers met at a class for new mothers while they were still carrying us. We were born a week apart in the same hospital, and became like sisters growing up. Katie even thought that we looked alike. We went through school together and were in the same classes throughout grammar school. We were even first and second in our graduating class.

I loved her parents. Her father was the kindest, gentlest man I’ve ever known. We lived in Brooklyn, and every Saturday Katie’s dad would take her into “the city”—as we called Manhattan—to visit the many sites. I was often invited along. We never missed the wonderful St. Patrick’s Day and Macy’s Thanksgiving Day parades. From the noise and the dirt, to the glamor and the grit, everything held an endless allure.

During our outings, lunch at Horn and Hardart Automat was a special treat. Imagine the thrill of being a child with a handful of nickels, looking through the chrome and glass door of a small window and being able to choose your own lunch—yes, a nickel was worth something back then. In those days, most children ate with their families at home, or at the home of a friend or relative. Eating at a restaurant was a rare experience.

The Automat was famous for its quality cup of coffee, which was only a nickel from 1912 to 1950. And for less than $1 you could enjoy a complete meal. You put a few nickels in a slot and opened the door to whatever you fancied. It was like magic. You got good quality food, cleanliness and fine service. And no tipping. The rich, the famous and the average working man dined at the Automat. It was as big a draw as the Statue of Liberty.

For those not familiar with the Automat, you can get a good look at this iconic piece of Americana on YouTube. There are several clips from various movies, and Kanopy has a great documentary depicting the restaurant’s unique history. Philadelphia had the first Automat, followed a year later by additional Automats in New York City.

As Katie and I grew into adults, our paths diverged. I married. Katie remained single. She travelled extensively, including several trips to her parents’ homeland, Scotland. And she enjoyed several cruises. We were now living in different states and we didn’t see each other nearly as often, but we still visited and kept in close contact. There are some people you may not see or talk to on a regular basis—but somehow, when you do, it’s like picking up where you left off. That’s how it was with Katie and me.

What will I do with the inheritance? I intend to use it to improve my life, my husband’s life and the lives of those around me. I will try to live my values by not embodying a vision of wealth and status that doesn’t align with who I truly am, and I’ll set aside a certain percentage for charitable giving. I agree with the many social scientists who feel that money given away provides more happiness than money received.

I tried researching how others feel about receiving money late in life and how they use an inheritance. My research ended with people in their 60s—it seems that no one expects people to inherit money in their 80s. I agree that it’s unusual. Apparently, Katie didn’t think so. She never told me I was a beneficiary, but I’d like to think that her purpose in honoring our friendship was to make my final years more comfortable, and to let me know how much she valued our friendship.

For me, Katie was a true gift. Because our relationship never changed throughout the years, I think of her as my forever friend. You may have many friends throughout your life, but very few lifelong friends—those who accept you for who you are and you accept them. It’s a special bond.

Marjorie Kondrack loves music, dancing and the arts, and is a former amateur ice dancer accredited by the United States Figure Skating Association. In retirement, she worked for eight years as a tax preparer for the IRS’s VITA and TCE programs. Check out Marjorie's earlier articles.

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Savoring the Moments

BASIC ECONOMICS teaches us that scarce commodities are more precious. This holds true for metals, rocks, food—and time. Which brings me to today’s topic: Time spent with my daughter and only child has reached the rare and precious stage.

In summer 2023, scarcity was far from my mind. My daughter and I traveled to visit Grandmama—my mother—five hours’ drive south of our home. The visit itself was short and mundane, with just the usual catching up with my mother and tending to her business. But the 10 hours of conversation with my daughter during the drive were memorable.

What did I discuss with a 17-year-old? For starters, neither of us tends to small talk. We dove right into the meat of the conversation—theology, political theory, writing, money. She’s of the age when old ideas seem fresh and in need of new deliberation. I’m happy to serve as her sounding board.

Building a bond. Sharing hours while swapping stories is not new to us. Her mother returned to part-time work a few months after our daughter’s birth, with a work schedule out of sync with mine. That meant that, for several days each month, my time was devoted to doting on my daughter. A highlight of a day together was—and still is—our “daddy-daughter lunch,” as she came to call it.

Nowadays, that meal often includes canned tuna salad, which my wife won’t even taste and would rather not smell. In addition, it usually includes amber-colored ginger pickles made with overgrown cucumbers from the garden, a dish we relish. My wife won’t sample those, either, but she’s kind enough to make them for us.

The main fare, however, is conversation. Soon after settling down with our plates, she turns to me and asks, “What shall we talk about?” Thus begins an hour-long discourse similar to our exchange during our summer 2023 drive. The menu of topics varies, but eventually the words wend their way to books. 

We both have an appetite for literature. This joint passion helps us through the inevitable rough patches that attend parenting and being parented. Though we each have a will that sometimes wears on the other’s patience, our mutual interest keeps us close. She tells me that I “always have something interesting to talk about.”

Troubling thoughts. While my daughter has been part of my life’s rhythm for the better part of two decades, that beat is changing. She began college at the end of the summer. If all our plans pan out, she’ll start her career about the time I’m settling into retirement. I can’t help but wonder how her new life will, in turn, shape the life of her mother and me.

College often opens wide the door to the future. Along with a freshman career, she may make a fresh start in a new location, with a new man as a regular lunchmate. Likewise, I wonder about the coming change in the lives of her parents.

Will we suffer the emotional pain of empty-nest syndrome? This phenomenon can strike parents whose last child has left home and who find themselves at loose ends. Parental loneliness and depression may move in when the child moves out, and satisfaction with life can decrease. Yet some research shows the effect may not be as strong when the child leaves for university—as is the case with our daughter—rather than full-time employment.

Conversely, data gathered from people aged 50 and older from 16 countries across Europe suggest a person’s sense of well-being increases after children depart. One reason may be that the stress of child-rearing is removed. Also, children living outside the home can enhance the parents’ social network and have a positive effect on the mental health of older folks.

That’s encouraging news. Meanwhile, what if our daughter winds up living hours—or days—away from us? Residents from a nearby 55-plus community make up part of my physical therapy patient schedule. A majority have relocated here from another state. During the course of our weeks together, I typically ask why they chose our town. “To be near our children” is a common response.

The urge to live near family is a powerful impetus to pack up and move neighborhoods. One HumbleDollar writer dropped out of retirement and into a new business. Another resumed the role as landlord to help finance his relocation. Closer to home, my wife's own parents traveled cross-country to finish their days near us.

I understand the sentiment. Though the emotional attachment to my present home is strong, my wife and I have poured our souls into parenting our daughter. Given a choice, we want our lives to remain intertwined with hers until we both breathe our last.

Letting go. By the time this article is published, my daughter and I will have had our last lunchtime chat before she heads off to school. She’s requested a bowl of her father’s venison stew—another dish her mother won’t eat. Even though I expect we’ll sit and chew the fat over many more meals before I depart this planet, this seems like the closing of a long chapter in our lives.

Yet I harbor no reservations about ushering my daughter toward her future. Indeed, much of my life as a father has been focused on providing her with opportunities I didn’t have or wouldn’t take. In many ways, my time with her has been a series of vicarious moments, watching her progress from tottering steps to confident strides. As those moments grow scarcer, I strive to savor each one.

Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, "Are you saving for retirement?" Check out Ed's earlier articles.

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Don’t Procrastinate

BY THE 1990s, New York City had been in decline for decades. What brought about the city’s recovery? It was, in part, the broken windows theory.

Picture a vacant building with one window broken. Most people wouldn’t think much of it. But this one broken window sends a signal—and, soon enough, others get broken. How do you reverse this decline? It’s easy: You get rid of the broken windows, and make sure things stay that way.

What does this have to do with money? I took my first personal finance course as a community college freshman. The teacher didn’t have a finance background. Still, he offered the class his theory about personal finance.

He said he fixes things quickly rather than procrastinating over problems. For instance, if his car had a cracked taillight but the bulb still worked, it wouldn’t be an issue to continue driving the car. But he felt that, if he didn’t replace the taillight, water would get into the light socket and cause more damage. The cost of the resulting damage would far exceed the cost of a new taillight. That idea has stayed with me to this day.

Taking care of the little things early in the game can save us money in the long run. For instance, after accidents and surgeries, failing to go to physical therapy has caused many of my friends to end up with reduced mobility.

Similarly, not caulking your windows can result in water leaking into your house, plus the resulting draft can cause your heating and air-conditioning bills to soar. Caulk is cheap. Heating and AC bills are not.

Fixing minor problems before they get bigger can not only boost pride of ownership, but also it can save you money in the long run. In my old field of property-and-casualty insurance, this is referred to as “minimizing the loss.” A tree that falls on your house and leaves a hole in your roof will only get worse unless you put a tarp over the hole. The tarp is cheap, but the potential water damage is huge.

This approach to fixing problems helped return New York City to its glory—and it can help you by saving serious money.

Finding My True North

AFTER I STOPPED working at age 70, the first thing I did was to examine my investments and cash flow. Satisfied that my finances were robust, I next turned to a key question: What did I want to do with the rest of my life?

You see, I’d always used work as my life’s organizing principle. It gave me purpose and provided much-needed money. What about my free time? Similar to work, I’d used chores and projects to organize my days.

But now that I had abundant free time, I needed a new direction. I sat down and listed all the things I did. I was taking a nutrition class, so I listed “school” as one category. “Fixing stuff” was another category.

After completing my list, I marked which activities I liked to do and which ones I didn’t. In making this division, I didn’t consider whether or not I should do these things. Rather, I marked the things I wanted to do—and those I didn’t—regardless of their importance.

Finally, I lumped my favorite activities into a few broad categories. By the end of this winnowing process, I’d come up with three general pursuits. I’m not trying to convince you to adopt my three categories. But I do find my short list helpful whenever I’m bored and wondering what to do next. My list: exploring, learning and accomplishing.

Exploring could mean traveling to Tibet or driving down a street I’ve never seen before.

Learning will never mean getting a degree. I hated school. I got my bachelor’s degree but didn’t enjoy it. No, to me, learning means gaining a new skill. I’m currently learning leather crafting by making a belt.

Accomplishing can mean replacing the brake pads on my car or mowing the lawn. I just feel good about how I’ve spent my time whenever I accomplish something tangible.

When I have nothing to do and feel bored, I refer to my list of three possible pursuits to give me direction. This check-in, in turn, gives me motivation to move forward.

After each task is complete, I assess how I feel. I consistently find that, to some degree, I’ve enjoyed the activity. That tells me these three endeavors are my true north.

Retirement was never a goal of mine. I’ve known people who worked for schools, the fire department or companies that offered pensions. In every case, these people would count down the days until they could retire. Meanwhile, the FIRE—financial independence, retire early—movement is about how long these devotees must work before they can call it quits.

I was entitled to two pensions from former employers. But even combined, they wouldn’t be enough to live on, so work became my activity of choice in my earlier years, not leisure.

Now that I’m retired, though, I need ideas for how to spend my time. Knowing the three things that turn me on—plus the freedom to choose which activities I don’t want to do—helps me enjoy this new phase in my life. After all, it’s my life. Why not try to enjoy it?

David Gartland was born and raised on Long Island, New York, and has lived in central New Jersey since 1987. He earned a bachelor’s degree in math from the State University of New York at Cortland and holds various professional insurance designations. Dave’s property and casualty insurance career with different companies lasted 42 years. He’s been married 36 years, and has a son with special needs. Check out Dave's earlier articles.

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Stay Safe Out There

SOME YEARS AGO, an elderly neighbor came to our door, asking for a favor. She was looking for packing tape because she’d sold her television and needed to ship it. She went on to say that the buyer, who she’d found on eBay, was in Nigeria. It was, of course, an obvious scam. But for whatever reason, she couldn’t see it.

Today, scams like this are better known and easier to recognize. But what makes online fraud such a problem is that the crooks are always developing new tricks.

Consider the latest incarnation: text messages which purport to be from Fidelity Investments. One reads: “Your investment account is locked due to unauthorized activity. Resolve before your account is suspended.” These messages look reasonably authentic, but they include a fraudulent link designed to steal users’ Fidelity login credentials. Recently, several people have forwarded me copies of messages like this, asking if they’re real. It can be difficult to know, especially because they include the Fidelity logo.

How can you protect yourself from bad actors? For starters, employ all technical means available. Use a password manager to generate very long passwords. Turn on two-factor authentication, ideally using an authenticator app rather than text messages. For sites that offer passkeys—an advance over traditional usernames and passwords—I favor using this option.

Depending on your bank, there may be further tools available to monitor for anything unusual. You can set up text alerts to notify you when funds are transferred out of your account or when a particularly large purchase is made with your debit or credit card. To guard against a type of fraud known as check washing, some banks allow you to preview checks online before they’re paid.

Technology isn’t infallible, though, which is why I recommend other steps to toughen your defenses:

To further guard against check washing, be sure to use a gel pen when writing checks. These are easy to find, and their ink is more difficult to tamper with.
Don’t feel compelled to respond to inbound communications, whether it’s an email or text message. If a communication asks you for financial information—or even asks you to click on a link—don’t do it. If you aren’t sure whether the communication is authentic, call the institution using a number you have on file or look up the number on the company’s website. Even with this step, you’ll want to be careful. Fraudsters often set up sites that look just like real banks’ websites, and they even employ what’s known as search engine optimization to make their fake websites appear in search results. My advice: If you want to go to a bank’s website, enter the address directly—chase.com, for example—rather than searching for “Chase Bank.”
Recognize that voices and even video can be mimicked today. So can caller ID. No matter how authentic folks might sound on the other end of the phone, be cautious. If they’re asking questions, don’t hesitate to hang up.
If a communication purports to be from an institution you don’t deal with, feel free to ignore it.
Also ignore communications that seem innocuous but are odd or out of the blue. A scheme known as “pig butchering” typically starts with a simple text message. One I received recently read, “I noticed your number in my contacts. Can you remind me of your name?” They’re attempting to draw people into conversation and, ultimately, into a financial trap. The best response is to simply delete the message. Depending on the messaging app you use, there may also be a link to mark the message as spam. That will help slow the spread of similar messages.
Don’t panic or act in haste. Fake communications often employ urgency, warning that an account will be locked, for example. If an incoming message is asking you to move fast, instead slow down. Ask yourself whether the request really makes sense.
Be wary of anything that appears implausible. Some years ago, I saw a woman send money to an address in Jamaica because she’d received a call letting her know she’d won a raffle. To claim the prize, she would just need to send a few thousand dollars in advance to cover “administrative expenses.” In this case, it made no sense because the woman hadn’t even entered a raffle—and certainly not one in Jamaica.
Don’t use a debit card to make purchases. Instead, use a credit card. That way, if your card number is compromised, it won’t affect your bank account.
Examine links before clicking. In the texts pretending to be from Fidelity, the links were a clear tip-off. None included “fidelity.com.” In emails, fraudulent links aren’t as easy to spot. But if you hover your mouse over a link, you should see in the lower-left corner of your screen the web address to which the link is pointing. If that address doesn’t look right in any way, don’t click.
Because of past data breaches, it’s easy for crooks to acquire personal information. They might have your bank account number or even your Social Security number, and they can use that information to make themselves appear more legitimate. Don’t let them fool you.

Worried that you may have already given up information to a bad actor? Depending on the situation, I suggest these steps: Change your account passwords, order a new credit or debit card, keep a close eye on transactions in your accounts, and put a fraud alert or a freeze on your credit report. To place a fraud alert, you need only contact one of the three major credit bureaus, Equifax, Experian or TransUnion. They’re then required to notify the other two. But to place a credit freeze, you’ll need to contact all three separately.

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.

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Never Quite Enough

WE ALL HATE LOSING—and life, alas, is full of it.

I’m not just talking about investment losses. There are the career successes we never had, the relationships that didn’t pan out and the purchases that fell short of our expectations. Almost all of us, I suspect, can recall countless situations that turned out less gloriously than we'd initially hoped.

Yet, even though my failures pain me, they don’t stop me from getting up each day and trying again. It strikes me that I’m the victim of some devious self-deception—and perhaps you are, too. That deception has three notable aspects.

1. Slights and failures are easily recalled, while praise and successes are quickly forgotten.

When I left The Wall Street Journal in April 2008, thousands of overly kind messages filled my email inbox. But guess what I remember? There was a lone email from a Journal reader who declared that he was glad to see me go. It’s almost as if my brain was telling me, “You did okay, but you could have done better, so don’t rest on your laurels.”

There’s a parallel with investing’s emotional rollercoaster. We build well-diversified portfolios, with an eye to reducing risk and capturing market returns wherever they’re happening, and yet we can’t help but be bothered by our investments that are lagging behind. This, of course, is classic loss aversion: We get more pain from losses than pleasure from gains.

2. Life makes sense in retrospect.

Hard work may set us up for career success. But whether we actually succeed often depends on luck—an element of randomness that doesn’t sit well with us humans, who desperately want to control our life’s destiny.

To be sure, we could always cite bad luck as the reason for our failures. But when it comes to life’s more significant events, bad luck isn’t a satisfying explanation. We want our life to make sense and, on that score, ascribing too much to luck doesn’t help. What to do? Enter the narratives we tell ourselves. One narrative I’m fond of: My failures laid the ground work for future successes.

In the middle of the night, I found myself considering my life’s achievements. These include getting into Cambridge, my long stint as a Wall Street Journal columnist, my two kids, the half-marathons I ran, my 2016 book How to Think About Money and this website. But here’s what’s striking about those successes: They were preceded by so many failures—or, if not failures, undistinguished results over many years.

But when I look back on those failures, I see a silver lining—that they somehow helped me get to where I am today by, say, knocking the rough edges off my character or by teaching me important lessons about both the world and myself. At the time, my life’s story might not have felt like it had any cohesion. But with the benefit of hindsight, I’ve managed to cook up a narrative where things make sense.

This narrative is especially clear when I think about my career. For instance, in many ways, my six years at Citi was a bust. I arrived to help launch a new online advisory service, but that venture was pretty much dead 15 months later. I then spent my remaining time at Citi as part of the U.S. wealth management business, doing daily battle with the lawyers and compliance officers who reviewed the stuff I wrote and the speeches I planned to give.

Still, in addition to some fat paychecks, I got a lot out of my time at Citi. I saw a bloated, politicized bureaucracy up close—and it made me realize how ineffective large organizations are. I learned how not to build a website. I got an inside look at how a brokerage firm works. I was compelled to write about every financial topic conceivable, including subjects like insurance and estate planning that hadn’t previously been my strength. And I was giving as many as 30 speeches a year, so I learned how to become a better public speaker. There was a huge silver lining—or that’s what I tell myself now, so the six years don’t seem like wasted time.

I imagine many folks have a similar narrative about their investment career. Early on, we often make all kinds of mistakes. But fingers crossed, we learn from those errors and eventually become more prudent investors. The early missteps were costly, but they came with a silver lining.

3. It always feels like there’s more to be done.

I first met Vanguard Group founder Jack Bogle in 1987, and last spoke to him a few months before his 2019 death. He was an astonishing man, relentlessly striving to leave his mark on the world—a drive that was still there right up until the end.

I’m not sure many folks could match Jack’s fire, but I think most of us have a little of that drive within us. In retirement, we might not be aiming for that next promotion or pay raise. But we’re still looking for a sense of accomplishment, whether it’s visiting all 50 states, losing weight, seeing our portfolio’s value hit some milestone, building something with our hands or putting together a great family reunion.

Indeed, this urge still afflicts me, even as I grapple with my dire medical diagnosis. I want to see HumbleDollar continue to thrive. There’s a slew of articles I still want to write. There’s a bathroom remodeling that Elaine and I are undertaking. I’d like to bring even more order to my financial affairs and get rid of even more stuff from the basement.

This striving is truly never ending. Like everybody else, I’m running on the hedonic treadmill, figuring happiness is just one accomplishment away, only to discover I never quite reach the finish line. Will I ever be content to rest on my laurels? I think not—because of the way we humans are wired: Relaxing may occasionally feel good, but it doesn’t feel nearly as good as achieving. Maybe that’s foolish. But it’s how our brains work.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.

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Feed Your Brain

HUGE AMOUNTS OF TIME and money are spent planning for retirement. The focus is almost entirely financial—running the numbers, so to speak. How much do I need to save to retire by age 65? Can I retire with my current nest egg? What are the chances I’ll run out of money?

No doubt these are the sorts of questions that keep HumbleDollar readers up at night. And, yes, the numbers are important. In essence, it all boils down to two key questions: How many years will I live and how long will my money last? We have little control over the former, so we focus intensely on the latter.

But dare I suggest that one issue too few of us consider is the quality, rather than the quantity, of years we have left? Do I really want to live to 100 if I’m saddled with chronic, debilitating illnesses for the final two decades of my life?

One of my greatest fears about aging is developing dementia. Today, over 55 million people live with dementia globally, and that number is expected to reach 78 million by 2030. The economic cost of dementia may reach $2.8 trillion by 2030. And this doesn’t include the enormous emotional toll on loved ones.

But what scares me most about dementia is that it robs us of our very identity—what makes us human. If we lose our minds and our memories, what’s left?

There’s some good news on this depressing front. Whether or not we develop Alzheimer’s disease—the most common form of dementia by far—is to a large extent under our control. A recently published randomized, controlled clinical trial showed that lifestyle changes can lead to improvement in those with mild cognitive impairment or early dementia due to Alzheimer’s disease. This offers hope that Alzheimer’s disease, at least early on, may be reversible through simple lifestyle changes. What’s even more amazing is that the beneficial effects were seen after just 20 weeks of intensive lifestyle intervention.

And since an ounce of prevention is worth a pound of cure, these same lifestyle changes may prevent the development of Alzheimer’s disease in the first place. What are these lifestyle changes? They’re fourfold: a whole foods, plant-based diet; moderate exercise; stress management techniques; and support groups. Furthermore, there was a statistically significant “dose-response correlation” between the degree of lifestyle change and measures of cognition and function. In other words, the more intensely patients modified their lifestyle, the greater was their cognitive improvement.

The medical evidence is mounting that Alzheimer’s disease has much in common with chronic diseases such as heart disease, high blood pressure and diabetes. As the saying goes, what’s good for the heart and blood vessels is good for the brain. This makes perfect sense when one considers that the brain receives 15% to 20% of the body’s blood supply.

While exercise, lower stress and social support are all important, I believe that what we eat may be the single most important determinant of our health, including whether or not we develop dementia. In short, we are what we eat. In another study, the risk of developing Alzheimer’s disease was 38% lower in those eating high vs. low amounts of vegetables, whereas consuming saturated fat and trans fats—so prevalent in the typical American diet—doubled the risk of developing Alzheimer’s disease.

As with other interventions, particularly medical drugs, there are side effects to the lifestyle changes we’re talking about. In two earlier studies, the authors showed that these same lifestyle changes caused regression of coronary artery disease and improved heart function. Implement these lifestyle changes, and your heart will heal alongside your brain. I’ll take that side effect any day.

One of the authors of the new Alzheimer's study, Dr. Dean Ornish, wrote the book, Undo It! How Simple Lifestyle Changes Can Reverse Most Chronic Diseases. If you want to understand why the four lifestyle changes are so important in preventing chronic diseases that lead to so much morbidity and mortality in modern life, this is your book. Ornish shows you how to implement the lifestyle changes of eating well, moving more, stressing less and loving more.

Nor are your genes your destiny. Eating the right foods can increase the expression of “good” genes and lower the expression of “bad” genes. But don’t expect too much advice along these lines from your doctor. Truth be told, modern medicine focuses mostly on treating the symptoms of disease, not the root causes. I was taught very little about the importance of diet in medical school and things haven’t changed much since.

Let’s face it: A long retirement is not really the end goal. What we ultimately desire is a long, healthy and active retirement. And more than anything else, this depends on having a healthy brain. Dementia is not an inevitable consequence of aging. You have far more control than you ever imagined.

John Lim is a physician and author of "How to Raise Your Child's Financial IQ," which is available as both a free PDF and a Kindle edition. Check out John's earlier articles.

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Behind the Curtain

I'M RELUCTANT TO ADMIT that HumbleDollar is run using smoke and mirrors. But if someone said that, I’d be hard-pressed to disagree.

I’ve long believed that the principles of sound money management are pretty timeless. What you should be doing with your money this year isn’t a whole lot different from what you should have been doing last year, and the year before that, and the year before that.

This notion is baked into how much of the site operates. Ignore the Forum and the latest articles, and consider the two other key elements of the homepage, the Get Educated and Second Look sections. Both these parts of the site run on autopilot, or close to it, and it’s a key reason I’m hoping the site can continue to thrive after I succumb to cancer.

By setting up much of the homepage to run on autopilot, it’s freed me up in recent years to focus on editing and writing articles, while also continuing to add ever-greater depth to other parts of the site. One result: I like to think HumbleDollar offers a richness of content that’s found on few other personal-finance websites.

Second Look. At any given time, this section offers a selection of five articles that were first published at least 30 days earlier. Some of these articles go back as far as 2014, when I was blogging at JonathanClements.com, before HumbleDollar’s year-end 2016 launch. The five articles displayed are automatically refreshed every two hours. Over the past decade, HumbleDollar has published more than 3,500 articles and blog posts.

Get Educated. In this section, you’ll find features dubbed Act, Humans, Manifesto, Money Guide, Think and Truths. All these features are published on an annual cycle, as is the punchy one- or two-sentence insight that appears at the top of the homepage.

I like to think that, if folks peruse the Get Educated section every day for a year, they’ll get a great personal-finance education—and, if they keep reading the section year after year, they’ll be reminded of some of the key financial insights that we often forget amid the turmoil of the financial markets and everyday life.

One issue with all this: Some of these pieces need revising each year depending on, say, the latest tax thresholds or retirement account contribution limits. In the months ahead, I’ll endeavor to make the site more timeless and hence reduce the need for such updating. Still, I worry that, after my death, parts of the site will become outdated if, say, we get major changes in Social Security, Medicare or the tax law.

This is especially an issue with the site’s money guide. My hope: In the years after I shuffle off this mortal coil, readers will use the comment section below each money guide section to offer updates. In addition, I'm working with folks at another website, with an eye to having them periodically update HumbleDollar's money guide.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.

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