When Assessing Your Income, Comparing Is OK, but Just the First Step

… what the comparison means (beyond our natural vanity), and what to do next …

Map of most of the continental US, with state boundaries shown.
Map of most of the continental US, with state boundaries shown.
Photo by Hans Isaacson on Unsplash

It’s just human.

Unless we’re struggling to survive, we care a lot more about how we’re doing compared to others, especially those we consider our peers, than about our objective situation.

Really.

Don’t believe me? Ok, let’s do a thought experiment.

Ever hear of Maslow’s hierarchy of needs? It defines several tiers of what humans need, usually shown in a pyramid.

The first two tiers are basic needs: food, water, warmth, rest, physical safety, and security. Beyond that are psychological needs like love, feeling you belong, and a sense of accomplishment. …


Many Experts Recommend Optimizing Your Social Security Claiming Strategy for the Wrong Thing

Following conventional advice on claiming strategy may put you at greater risk of running out of money when you’re too old to do much about it

Seal of the United States Social Security Administration (courtesy of the US Government).
Seal of the United States Social Security Administration (courtesy of the US Government).
Seal of the United States Social Security Administration (courtesy of the US Government).

Social Security is a critical part of making retirement even somewhat affordable for many Americans.

According to Fool.com, Social Security can replace over half of career-average wages for low-income Americans, and about 40% for middle-income Americans. By the time you reach the maximum Social-Security-taxable income, benefits replace just over a quarter of your career-average income.

Obviously, unless your income is extremely low, you can’t count on Social Security as your sole source of income.

However, given how little most Americans have saved for retirement by their 60s, Social Security can make the difference between a barely livable retirement vs. …


If You’ve Just Had It with Your Job…

And if not, how can I retire now anyway?

A couple sitting at the oceanfront, watching the sun setting over the water.
A couple sitting at the oceanfront, watching the sun setting over the water.
Photo by Anukrati Omar on Unsplash

You just got out of yet another meeting with your jerk boss…

Or, it’s Monday morning and you can’t face another week at your soul-sucking job…

Or, you’ve been scrolling through your Facebook feed or Instagram and can’t stop fantasizing about traveling to all those exotic locations (once it’s safe again)…

Or, … fill in the blank with why you personally have absolutely had it with work and want to finally stop.

You’ve been saving as much as you can for as long as you can remember, and your portfolio finally crossed that $500k or the quasi-mythical $1 million mark…


Is Accepted Investing Wisdom Always Right?

“Past performance is no guarantee of future results” is a common disclaimer, but is that just a CYA legal disclaimer, or does past performance truly have no predictive value?

Photo of race track starting line, showing numbered positions from 1 to 7.
Photo of race track starting line, showing numbered positions from 1 to 7.
Photo by Markus Spiske on Unsplash

I’ve been investing in (mostly stock) mutual funds since 1994.

As I wrote elsewhere, after a rocky start, I developed a method for picking mutual funds that’s worked pretty well for me.

2 Pieces of Accepted Investing Wisdom I Rarely Follow

There are two commonly accepted pieces of investing wisdom that I mostly reject.

First, Warren Buffet’s assertion that investing in low-cost index funds is the best way to invest. I’ve invested almost every dollar in actively managed funds, and my picks beat the S&P 500 (including dividends) by about 1% per year over nearly 2 decades.

Second, that using past results to pick investments is like “driving while…


With Prices Ballooning Faster than They Have in Decades, You Need to Pay Attention

Inflation keeps ticking higher and higher, but affects some items much more than others. Here’s which ones, and what you can do about it…

A man holds in front of himself a purple balloon with a crying face drawn on it.
A man holds in front of himself a purple balloon with a crying face drawn on it.
Photo by Niklas Kickl on Unsplash

The US Bureau of Labor Statistics (BLS) tracks thousands of prices, and folds them all into a weighted average they call the consumer price index, or CPI.

Last month, I wrote how the CPI’s year-over-year increase was 5.0%, which followed a string of gradually growing 12-month readings, from 1.4% in January, to 1.7% in February, to 2.6% in March, to 4.2% in April, to 5.0% in May.

I wrote how the CPI’s year-over-year increase was 5.0%

Now, the BLS reports June’s ballooned 5.4% year-over-year, with a monthly increase of 0.9% (not seasonally adjusted).

Do All Prices Move Up Together?

No, they don’t.

Not at all.

You…


Inflation Is Heating Up, for the sixth Month in a Row

How to calculate your personal inflation rate

A man is looking at a screen showing a graph with a red line trending up.
A man is looking at a screen showing a graph with a red line trending up.
Photo by Frank Busch on Unsplash

There’s no two ways about it.

Prices are moving up.

For some things, by over 50% in the past year!

According to the US Bureau of Labor Statistics (BLS), the official score-keeper, May’s year-over-year change in the consumer price index (CPI) was 5.0%.

This is part of a rising trend of year-over-year numbers, from 1.4% in January, to 1.7% in February, to 2.6% in March, to 4.2% in April, to 5.0% in May.

Will June continue this trend? Will July? Will the rest of 2021?

What Does It Mean?

A handy website shows the history of monthly US inflation numbers from 1914 to 2021…


Opening Your Own Small Business Is an Adventure, but Shouldn’t Become a Nightmare

Learn from mistakes I’ve made, or seen my clients make…

Red neon sign saying, “IT BEGAN AS A MISTAKE.”
Red neon sign saying, “IT BEGAN AS A MISTAKE.”
Photo by Varvara Grabova on Unsplash

As the owner of several (really) small businesses, including a consulting practice and a financial strategy practice, here are the top 3 things I learned to not do, from my own experience and the experience of clients.

3. Not Setting Aside Enough Money to Pay Taxes (and Build a Reserve)

I met Jane (made up name) for a one-off coaching session to help her with this one.

Every January, April, June, and September, she’d get stressed and upset because of the large sums of money she needed to send to Uncle Sam and her state’s taxing authority. …


A Step-by-Step Guide for Building an Achievable Retirement Saving Plan

9 steps for figuring out how much you need to retire, and how to get there without letting despair overwhelm you…

Photo by Sylas Boesten on Unsplash

I love simplicity.

But sometimes, even if you avoid the trap of over-simplifying things, the simple answer is far from easy.

Case in point — the 1000-a-month savings retirement rule. If you’re not sure what that is, here’s a quick explanation, including how to tailor it to your personal situation.

Done?

Great, let’s start figuring out how to use the rule without getting overwhelmed by how much you think you’ll need to save for retirement.

Step 1: Going from Annual Salary to Estimated Amount Needed in Retirement

Let’s imagine a hypothetical guy, John, age 40, who makes $80,000 a year, putting him above 56% of Americans. To figure out how much income…


Personal Finance “Rules” Are Often Misused — Don’t Join That Trend

How to correct an over-simplified rule-of-thumb and tailor it for your personal situation…

Silhouette of a man’s thumb pointing up.
Silhouette of a man’s thumb pointing up.
Photo by Jan Antonin Kolar on Unsplash

In 2018, Certified Financial Planner Wes Moss wrote this:

For every $1,000 per month you want to have at your disposal in retirement, you need to have $240,000 saved.”

He called this “The 1,000 Bucks-A-Month Rule.”

The (Overly) Simple Math Behind the “$1000/Month Rule”

The math behind the $1000-a-month rule-of-thumb is simple.

If you take 5% of a $240,000 retirement nest egg each year, that works out to $12,000/year, which divided into 12 months gives you $1000 each month.

Painless, right?

Two Problems with Moss’s “$1000/Month Rule”

Moss assumed that if you retire between the ages of 62 and 65, you could safely withdraw 5% each year and not run out of money before…

Opher Ganel

Consultant | physicist | sys eng | writer |financial strategist (opherganel.com) | avid reader | amateur photographer and artist ➜ medium.com/financial-strategy

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