I’m still adjusting to writing 2020. It’s surreal to think that we’ve started a new decade and Y2K is twenty years in the rearview mirror.
We’ve got a lot of great articles to help you start your year and decade on the right foot. We start with details and planning implications of the SECURE act, passed at the end of 2019 and currently going into effect.
Our selected articles look back at market performance over the past year and decade, forecast future economic conditions, and help you use all this information to make better decisions with your portfolios and retirement plans.
Our selections explain why the actions that lead to financial success, including those of the often sensationalized Financial Independence, Retire Early (FIRE) community, are actually mundane and why that’s a good thing.
Finally, I close out this month’s selections with a fascinating article about medical tourism that is making me take a closer look at adding this option to our early retirement tool belt.
Getting More SECURE
Last month I squeezed an article about the then just passed SECURE Act into our December round-up. It was far and away the most clicked article. So, now that the dust has settled here is insight on what has actually changed.
For the CliffsNotes version, Mike Piper simplifies the aspects of the law most likely to impact readers with Retirement and 529 Changes from the SECURE Act.
And for those of you looking for an in depth analysis of planning implications, Jeffrey Levine writes SECURE Act And Tax Extenders Creates Retirement Planning Opportunities And Challenges.
Markets: Past and Future
Economists at Vanguard shared their look forward with Vanguard economic and market outlook for 2020.
Some people think gold is a necessity to hedge against worst case future scenarios. Karsten Jeske analyzes the past to see what holding gold would have done to your safe withdrawal rate, writing Using Gold as a Hedge Against Sequence Risk. His analysis will be of particular interest for readers who have written for our opinions on the gold heavy Permanent, All Weather, and Golden Butterfly portfolios.
More on the Future
Retirement planning requires all of us to make some assumptions and predictions about an unknown future. Larry Swedroe offers a sobering reminder to not place too much confidence in these predictions, writing Accountability Proves the Incompetence of Market Forecasters.
Facing an unknowable future, the emotions of fear and greed often drive investors’ behavior. Financial advisors Michael Kitces and Carl Richards share The Overconfident Conversation And Walking Clients Back From The Greed Ledge.
Is FIRE Mundane?
Christine Benz noticed that many people overcomplicate their finances looking for quick fixes. She writes The Keys to Financial Success Are Incredibly Mundane (Sorry!)
I was excited to have the opportunity to talk with Christine and Jeff Ptak this month on Morningstar’s The Long View Podcast. I appreciated their combination of healthy skepticism with open minded curiosity about the FIRE movement. We discussed changing your mindset around what is “normal” with finances, what it takes to build wealth quickly, the impact of the bull market on the FIRE movement, how we’re balancing risks and opportunities, why many people in the FIRE community don’t actually retire and what FIRE skeptics can learn from it all.
My motivation to share my journey to FIRE was to demonstrate that it doesn’t require an extreme lifestyle as is often portrayed. The core concepts of questioning assumptions, spending less than you earn, and investing the difference wisely are what enables financial independence much sooner than most people assume is possible.
The cumulative results of these actions over 10-20 years look much different than those of people on the standard path through life. But at its core, like most personal finance topics, FIRE is pretty mundane. Sorry!
The Best of FIRE
Many people are skeptics of FIRE, because their only exposure to it is the clickbait headlines and sensational stories that appear on TV, newspapers, or large websites. I try to use these monthly round ups to bring together the best advice and tools, from both traditional media sources and independent bloggers.
Mr. Money Mustache is credited by many as the leader of the FIRE movement. This month he offered solid advice on intentional living and giving generously, writing Let the Roaring 2020s Begin.
This past fall, I met and was impressed with the FIRE blogger who writes at A Purple Life. She describes the evolution that many of us go through on the way to FIRE, sharing Lessons Learned After Half A Decade On The FIRE Journey.
FIRE blogs provide an alternative to the “expert” advice typically repeated by the financial industry. A great example is the following guest post from the Physician of FIRE blog about the massive conflicts of interest that come with most advice. Donovan Sanchez writes Confessions of an Ex-AUM Financial Advisor.
Health Care Tourism
We’ll close with a topic that has my interest but also my skepticism, medical tourism. I found this article from the Salt Lake Tribune fascinating. My home state of Utah is paying state employees to leave the state to incentivize them to get cheaper medications in Mexico. Erin Alberty writes Prescriptions from Mexico? Utah is paying public employees to make the trip.
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[Contributing Editor Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris' writing has been featured in MarketWatch, Doughroller, Business Insider and RockStar Finance. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at firstname.lastname@example.org.]
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