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Investing Blog Roundup: State-by-State Economic Insecurity Among Americans Age 65+

This week I came across a recent study that looks at economic insecurity among older Americans. The paper discusses the typical amount of income necessary in each state for a person age 65+ (or a couple age 65+) to maintain independence and meet daily living costs while staying in their own homes (providing separate figures for renters, homeowners with a mortgage, and homeowners without a mortgage). Then it shows what percentage of people in each state in that age range are below that necessary income figure.

What struck me most was not so much the differences between states, but rather the differences between single people and couples.

Other Recommended Reading

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Investing Blog Roundup: Keys to Financial Success

I hope you’ve all had an enjoyable holiday season.

New Year’s resolution season will be upon us shortly, and Morningstar’s Christine Benz offers some guidance for anybody looking to improve their finances. Benz points out that there’s just a handful of things that make almost all of the difference — get the basic “nuts and bolts” sort of things right before worrying about whether your small-cap allocation is too high or too low.

Other Recommended Reading

Thanks for reading, and I wish you the best for 2020!

Investing Blog Roundup: Rethinking Financial Education

There’s a common refrain about personal finance: “We need to teach this in high school!”

If you studied a foreign language in high school, but you do not speak it regularly in your personal or professional life, how much of it do you still know? How would you fare in a conversation?

In a discussion with Christine Benz and Jeffrey Ptak of Morningstar, John Lynch of University of Colorado Boulder points out that personal finance knowledge is like any other knowledge — if you don’t use it, you lose it.

Information about making a cost-conscious college decision would surely be beneficial to high school students, because they can use it right away. Teaching students how to create and use a budget could also be useful. Information about mutual funds or about the different types of mortgages, on the other hand, is likely to be forgotten by the time it becomes relevant.

Other Recommended Reading

Thanks for reading!

Investing Blog Roundup: Financial Therapy

I hope you all enjoyed your Thanksgiving holiday yesterday.

For decades the field of behavioral economics has been pointing out that we are not simply spreadsheets with arms and legs. The decisions we make are frequently at odds with what a perfectly rational analysis would recommend.

A newer field, however, is the field of financial therapy. Financial therapy essentially takes as a starting point the fact that emotional factors play a huge role in our financial decisions. And it then asks, “given that, how can we help people to make better financial decisions (i.e., financial decisions that will better serve their overall well-being)?” In other words, the financial therapist uses a blend of financial competencies and therapeutic competencies to actually help people enact behavioral change.

Other Recommended Reading

Thanks for reading!

Investing Blog Roundup: Less Time Working, More Deep Work

This week I enjoyed two articles discussing workplace experiments about how different changes to the workday (or workweek) affect productivity.

At least for me, whether it’s writing, research, or coding, I cannot come remotely close to cranking out 8 consecutive hours of productivity with only a brief break for lunch (at least not on a regular basis). I tend toward starting work early, getting in a few hours of really good work, then taking a long break doing something completely different — riding my bike, climbing at the gym, or walking around the neighborhood or our local Botanical Garden. Then I have another few good hours in me, and that’s it.

Other Recommended Reading

Thanks for reading!

Investing Blog Roundup: The Best Predictor of Stock-Fund Performance

Morningstar’s John Rekenthaler recently wrapped up a three-part series about a piece of research that found a metric for selecting mutual funds that has considerably better predictive value than simply picking funds with low expense ratios. I would encourage you to read the series in its entirety though. The first two articles are interesting, but the real lessons come in the final article.

Other Recommended Reading

Thanks for reading!

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