Bonds: What Are They Good For? Part II

[Note: The following is Part II of a guest post that I requested from one of my Gold Sponsors, Johanna Fox, CPA of Fox & Company Wealth Management. In case you missed it, please visit Part I of Bonds: What Are They Good For, then come back for the rest of the story.] Let’s open this second part of our bond series with a couple of statistics: On average, the stock market experiences an intra-year drop of 14.1%. On average, we have experienced a bear market (defined as a sustained drop of 20% or more) every 5.5 years since the […]

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Bonds: What Are They Good For? Part I

[Note: The following is a guest post that I requested from one of my Gold Sponsors, Johanna Fox, CPA, CFP® of Fox & Company Wealth Management. She was one of the first people to see my Sponsorship proposal. I sent it to her not because I expected she might be interested in sponsoring the site, but because I know she is not afraid to speak her mind. If I was asking too much, she would tell it to me straight. On the WCI forum, she has expressed her opinion on bonds, and I thought it would be great to allow her […]

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How I Brofited from the Brexit

The sky wasn’t falling. The end wasn’t near. But you wouldn’t know it if you had access to a computer, television, or radio recently. The overreaction wasn’t limited to major new outlets, although they were all over it. Even a couple of my favorite financial companies got in on the act. When I logged in a full week after the vote to Brexit, both Personal Capital and Vanguard had Brexit pop-ups (Brop-ups?). We in the blogosphere gave our perspectives, which tended to be more sensible. Recommendations to ignore the news, stay the course, and don’t believe the hype were standard issue. […]

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He Has Read Over 250 Investing Books. He Recommends These Three Funds.

Marquette Sailboats

I was browsing the Bogleheads forum recently, when an “old” post from 2014 was brought to the top of the page by a new comment. The thread was started by Taylor Larimore, revered Boglehead Emeritus. In the post, Mr. Larimore states, “Nearly everything I know about investing I learned from experience (the hard way) and reading books.” He goes on to list the investing books he has read. Mr. Larimore has read more investing books than I have read Dr. Seuss, Eric Carle, and Little Golden Books combined. Color me impressed. What’s even more impressive than the number of pages he has […]

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I Made a Bad $10,000 Investment. On Purpose.

Our post-recital ice cream social was in full swing. The kids were running rampant, the leftover ice cream was slowly melting in the tubs, and the adults were enjoying some adult beverages and some non-violin music. If there’s one thing I’ve learned from children’s music recitals, it’s that the violin must be a really difficult instrument to learn to play well. Fortunately, our boys play piano. I was chatting with another proud father, learning a little more about his line of work. He works for the local small business development corporation, funded by the federal Small Business Administration (SBA). He […]

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PoF Portfolio Performance Update

A couple months ago, I shared my portfolio with you. In the previous post, I showed you which funds I hold in which accounts, including the percentage of each fund within the account, and as a percentage of the overall portfolio. I didn’t share performance. Today, I’ll fill that gap. I like a highly customizable spreadsheet to track the ratios, and I like Personal Capital to track the balances and performance day-to-day and over time. The current spreadsheet for the PoF Portfolio, as of 5/18/2016:     Not a whole lot has changed in the interim. The taxable account now […]

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Don’t just do something. Stand there!

I stepped In from the covered patio to my basement office overlooking the river. It would be at least a few minutes before the maple sap that had been boiling all day on the patio would become syrup at the critical temperature of 219 degrees Fahrenheit, so I thought I’d finish reading some article I had started earlier. “It’ll be fine,” I said. “I’ll just be a minute” I said. “PoF!!!” my wife hollered at the top of her lungs. [she actually yelled my given name] I got up from the distracting computer. The syrup had clearly met and exceeded […]

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Investment Fees Will Cost You Millions

New Orleans FIRE

Yes, Millions.   You don’t have to be a big shot for this to be true. In fact, someone investing $833 a month into his 401(k) can see an 8-figure sum (that’s $10 million) disappear over the course of a long lifespan. Today, we will pry into the finances of four people you may encounter at the hospital and discover the net worth they might expect to have over the course of their working and retirement years. What sort of annual investment fees are we talking about? Expense ratios of mutual funds (0.04% or less to 1.5% or more) Front-End Load or Back-End Load (Up […]

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My Mega Roth Conversion: a $212,000 mistake?

Prior to 2010, Roth conversions were off limits to most physicians or anyone else with six-figure income. In 2010, the rules changed and the $100,000 AGI limit was eliminated. The prevailing thought was that there would be a one-year window in which high earners could legally do a Roth conversion. From one of the many articles on the subject from back then:   “2010 is the only year that this exception is allowed. Starting in 2011 (unless congress changes it), it reverts back to the original way where all the tax is owed in that year.”   My Mega Roth Conversion: a $212,000 […]

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Double Your Money with the Rule of 72

Rule of 72

Doubling your money is easy. Seriously. Let’s see, you could walk away with double your money by: Placing your chips on the roulette table. Wesley says “Always bet on black.” Any variation of #1 at the blackjack, craps, poker table or sports book. Bet against the housing market at the perfect moment in history, à la The Big Short. Collect your Nigerian lottery winnings. The return on this one is actually way more than double according to the e-mails.   Do you see a pattern here? The odds are stacked against you. You might double your money, or walk away […]

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Top 5 Ways to Manage Your Money

I’ve written a few Top 5 posts so far, and the 5 top items have generally been listed in no particular order. That won’t be the case today. Presenting, from best to worst, the Top 5 ways to manage your money:   1. DIY (Do It Yourself)   Invest in low cost stock and bond funds. Diversify. Invest early and often. Know the tax implications. Create an Investor Policy Statement with a thoughtful asset allocation for your portfolio. Read a recommended book or three. Avoid costly mistakes. Acknowledge that you don’t know what you don’t know, like the future for example. Educate yourself. Understand […]

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You Need an Investor Policy Statement

I enjoy internet forums. I’ve been a lurker (non-participating reader) of several forums for quite awhile. Since launching this site, I’ve become a more active participant. I learn a lot when a question is raised and then answered by dozens of interested people with different backgrounds and perspectives. Crowdsourcing for a solution to any dilemma can be a great way to help you make a decision or simply become more educated on a topic of interest. A frequent question that comes up on the forums I frequent looks something like this:   “Which is better, a Small Cap Index Fund or […]

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The PoF Portfolio

pof koozies

[editor’s note: content updated 7/2018.] [In my best Ron Burgundy voice] “My portfolio looks good. I mean really good. Hey everyone! Come see how good my portfolio looks!” I’ve touched on the importance of investing early and often, but I haven’t given you a clue as to how I invest. It wasn’t until sometime last year that I wrote myself an Investor Policy Statement and came up with an asset allocation that felt appropriate. I made a few transactions to apply the allocation across my various accounts. This is the allocation I’ve decided upon:   60% US Stocks (with a tilt […]

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