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An Early Warning System for Your Investment Portfolio

It’s every investor’s worst nightmare. You check your portfolio one morning and find it’s worth much less than you thought, or has lagged the market significantly. In my experience, that usually happens due to a lack of diversification. Imbalances of different kinds can sneak up on even the most experienced investor. (I’d categorize my most …

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How Can You Be Certain About the Retirement Decision?

You’ve worked a long career — several decades, possibly more. You’ve saved diligently, paid off the house, put the kids through college. Your investments have recovered from the latest downturn, and the world seems relatively sane again, for now. You’ve amassed more assets than you dreamed possible when you were younger, and yet you hesitate. …

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Your Retirement Roadmap

This blog is a useful format for a range of topics related to saving, investing, and retiring. But I’ve also been asked for a more structured approach to retirement. So, after a lot of writing and organizing — and quite a bit of living, in order to learn the lessons described — I’m pleased to …

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How Much Will it Cost You to Live in Retirement?

Without a deep understanding of what it costs you to live, any discussion of retirement savings or income is pointless. Despite the oft-repeated advice that you will spend some standard percent (perhaps 60% on the low end to 100% or more on the high end) of your pre-retirement income in retirement, what it costs you …

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Investing for Income When Interest Rates are at Historic Lows

In today’s shockingly-low interest rate environment, which the Federal Reserve has pledged to maintain into 2014, it is more difficult than ever to find safe high-yielding investments. A reader writes: “I have a CD coming due and the interest rate is going to be terrible. I’ll probably just renew it at the best rate I …

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Most Financial Plans are Dubious Attempts to Predict the Future

“In preparing for battle I have always found that plans are useless, but planning is indispensable.” —General Dwight D. Eisenhower Many flavors of financial, investment, or retirement planning boil down to attempts to predict the future based on the past. Smart people and resourceful organizations develop clever models which give them confidence to market themselves …

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To Build Wealth: Avoid Changing Locations or Partners

Major life changes are inevitable, but they are often costly. To retire early and well — in some cases even to retire at all — it is critical to avoid the financial equivalent of a major detour or train wreck. I’m talking here about expenses in the tens of thousands of dollars that can completely …

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Paying for College: The Last Retirement Hurdle?

A reader who is concerned about the high cost of college writes: “A bedrock objective is that my daughters do not graduate from college saddled with debt. They need to pitch in to an extent, but I do not want them to mortgage their future so they can get a degree. I am interested in …

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Should I buy gold?

A reader writes in to ask: “A relative has been saying that our economy is going to collapse and I should put money in gold because the world will fall back on it. What do you think about precious metals?” There has been tremendous investor interest in gold and other precious metals in recent years. …

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How My Investments Prospered in the Lost Decade

Some might wonder how I managed to retire in early 2011, after the terrible 2000’s, which many analysts have called the “lost decade.” (At the start of January 2000, the Dow index stood at 11,497. At the end of December 2010, it was less than 1% higher at 11,578. An atrocious return, even if dividends …

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“Debt” – The Big Picture

As I write this, debt is front and center on the world stage. In the United States, the Congressional supercommittee failed to reach a compromise that would even begin to address the soaring national deficit. In Europe, the crisis is even more acute, bringing down governments and threatening to take out the euro currency itself. …

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3 Proven Investment Strategies

I’ve been investing for the better part of two decades now. I’ve managed a sizable portfolio through two historic bear markets and spent countless hours reading every book, blog, and article I could find on investing and personal finance. During that time I’ve examined nearly every strategy and wealth-building scheme that’s crossed my path. In …

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What Do We Mean by “Retirement”?

The idea of retirement is an invention of the last 75 years. Before then, people had no expectation of “retirement” in the modern sense. It’s worth analyzing this concept a little closer, before we arrive there, to make sure it’s a place we want to go. What is the purpose and meaning of “retirement” to …

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Wish Lists and Dining Cash

Spending less is the simplest, most direct way to increase your effective income, and build wealth. Done right, being thrifty is fun and liberating. Here are a couple of easy, favorite techniques for reducing or controlling your expenses: Use wish lists to delay and defuse the need for instant gratification. I have extensive wish lists on …

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Can You Count on Social Security?

It’s trendy in some circles to discount Social Security completely. But when you look at the facts for those nearing retirement now, that just isn’t realistic. Social Security will be a key part of retirement for most of us. Social Security is in genuine trouble: According to a recent Social Security Statement of mine, “the …

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