From the category archives:
The rules of thumb (i.e., “you’ll need 70% of your pre-retirement income”) drive me crazy. They’re nothing short of dangerous given the wide variety of people’s plans for retirement.
There’s really no viable alternative to sitting down and calculating how much you’re going to need.
Fortunately, it’s not as difficult as you might think: Start with your [...]
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Question: If you have the choice of investing $750 at an 8% rate of return for 10 years, or investing $1000 at an 8% rate of return for 10 years, then paying a 25% tax on the ending value, which should you prefer?
Answer: Neither. The ending value in each case is exactly the same.
In other [...]
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The following comment was made on the Boglehead forum the other day:
“The financial-advice community has been seducing everyone into setting goals that cannot be met with low-risk investments, and then seducing people into drawing the logically fallacious conclusion that therefore, they should accept high-risk investments (rather than changing their goals). It’s akin to seducing everyone [...]
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Trent at the Simple Dollar recently wrote a post sharing a question he received from a reader. Here’s what the reader asked:
I’m twenty eight years old and am now debt free. I’d like to start investing, but I have almost no tolerance for risk. I don’t mind not earning a great return because of this, [...]
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I just read what is without a doubt the most thought-provoking thing I’ve encountered in a good while: Chapter 4 to Stephen Pollan’s Die Broke. The chapter is titled “Don’t Retire.”
Now, I’ve read that piece of advice several times before. Many people make the case that if you’re doing work you love, there’s no need [...]
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Earlier this month, I took a look at how volatility affects your return when dollar-cost-averaging into an investment. (In short, it increases it.)
While in St. Louis for the holidays, I had a conversation with a family member that made me think that it might be prudent to explain the other side of the equation: Volatility’s [...]
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