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When I first began reading that President Obama was considering reducing the tax benefits for savers who make use of 529 plans and other education savings accounts to reduce the cost of education-related expenses, I was surprised. It has been my understanding that 529 plans, all though I do not have one, are intended to help the middle class by encouraging tax-efficient savings for education.

According to the statistics on 529 plans and Coverdell Education Savings Accounts, these college savings plans have not lived up to the expectations. The middle class has mostly ignored these options for preparing for their children’s and grandchildren’s education. Those taking advantage of the tax benefits might be families who may not need the incentive.

The tax benefit for 529 plans is simple. The growth in these accounts will accumulate tax free, unlike growth in regular investment accounts. When you sell investments and withdraw that proceeds from a regular investment or savings account, you owe income tax on gains and interest. You will also owe income tax if your regular investments offer any dividends. This is not the case with 529 plans. You can withdraw your investment or savings for education expenses tax-free, according to how the law is written today.

Most startling when reviewing the demographic statistics was the fact that families with 529 plans or Coverdell accounts have, on average, twenty-five times the median net worth of those families without education savings plans. Those with the accounts have three times the median income of the others, or $142,400 versus $40,300.

So while in theory, the 529 account could save the middle class money, it’s generally not working out that way. Despite the popularity of 529 plans among financial writers and advisers, it just hasn’t caught on among the middle class. That probably could have been expected; wealthier families generally are in a better position to take advantage of all that is presented to everyone. The same criticism can be made regarding 401(k) plans, which have been around much longer than 529 plans.

The middle class was so slow to adopt 401(k) plans that companies started automatically enrolling employees in the retirement plans to jump-start their savings. This, while beneficial to some employees, was a bigger win for 401(k) plan administrators and managers of the (usually expensive) funds included in 401(k) plans. In this “win-win” scenario, middle class investors receive a supposed benefit, while the financial industry feeds off a growing source of revenue.

There are a number of specific reasons that 529 plans have failed to take root in the middle class investment and savings portfolio, according to reports by and discussions with 529 plan officials.

The middle class has difficulty saving. Whether this is true from a financial perspective or just a matter of mindset, in general, the middle class sees saving for their children’s future needs for funding of higher education an unattainable goal. In many cases, families believe they need to choose between saving for retirement before saving for their children’s education, and saving for retirement is a necessity that can’t be fulfilled. Thus, the priority is always one’s own retirement.

The hierarchy of needs is real. Especially through the recession, the financial focus of the middle class has been on basic necessities, even more basic than one’s own retirement. It is impossible to make saving for the children’s future when there isn’t enough income to cover food and shelter. If you have to choose between paying the mortgage and investing for any other purpose, whether one’s own retirement or in a 529 plan for the children, the mortgage always comes first. Urgency trumps importance.

The industry hasn’t done a good job of marketing to the middle class. Half of all parents of future college students just don’t know what 529 plans are. Financial aid is complicated even without the inclusion of 529 plans, so there are two paths that one can arrive at the idea that middle class families don’t understand 529 plans. Either they are just not receiving the marketing message, or they are receiving the message, but it’s drowned out by the complex industry surrounding the financial requirements of a college education.

Parents underestimate the cost of a college education. It’s possible that many parents in the middle class don’t anticipate their children’s future expenses being so large that they would necessitate advance planning. They could be underestimating the cost (and annual increase in cost) of tuition or overestimating the amount of financial aid available in the form of loans and scholarships. Parents may be unaware of how the burden of student loans has grown significantly over the last generation.

If these numbers were illustrated better, even though some in the financial industry are continuing to attempt communication, perhaps the middle class might be motivated to think about the future needs of their children.

Is Obama’s proposal to limit the tax benefits of 529 plans and Coverdell Education Savings Accounts the right solution? At this point, we’d probably be better off working on how to encourage higher education through tax policy than discouraging it. Right now, wealthy families are more likely to take advantage of these tax benefits, so solutions should be focused on how to encourage middle and lower income families to save more.

Simplify the options. In its current form, each state can support its own 529 plan, plus there is a 529 plan that relates to private colleges specifically. States usually partner with one specific provider in the industry. For example, New Jersey partners with Franklin Mutual Advisors (a branch of Franklin Templeton Investments). Vanguard is a partner with several other states including New York and Nevada to provide qualifying 529 plans in those states.

On the one hand, choice is limited depending on the state in which you live (if you want to save money on state income taxes), but on the other hand, the information is often presented in a way that makes it difficult for investors to choose plans. If 529 plans were presented more like IRAs, some confusion might be eliminated. You can open an IRA with almost any investment company and receive the same tax benefits. 529 plans could theoretically work just as easily.

Another way to simplify would be to offer one 529 plan across the entire United States. All investors would invest in the same plan, and this would eliminate the problem of choice. Earnings could be tax-free at the federal level and in every state.

Offer more incentives. In order to encourage more middle class and low income families to save for their children’s education — an even more important goal among low income families because a college education is a necessary part of moving out of poverty — the government can change the way incentives are presented for saving. For example, the government could match, in the form of a credit into the account or in the form of a tax credit, contributions into 529 accounts made by families whose household income falls below a certain level.

Also, the government could consider a contribution into a 529 account a tax deduction, so a family that has an income of $40,000 and chooses to deposit $1,000 into a 529 would be taxed only on $39,000. That tax deduction could be limited only to households that fall below a certain income level.

Another potential incentive would be for the government to automatically create an account for every newborn child, with an initial deposit that can only be withdrawn after at least fifteen years and only for higher education expenses.

Increased communication. Regardless of how the government, the financial industry, or society at large decides to improve the feasibility of 529 accounts for moderate and low income families, the communication needs to improve before more people adopt these plans. Not only does communication need to be clear about the benefits of 529 accounts, but there needs to be a stronger effort to promote the necessity of a college education.

It’s difficult to see children from struggling families believe that college will never be an option for them, particularly when children find themselves needing to contribute as soon as possible to their families’ household income.

If education isn’t a priority, whether out of necessity or out of ignorance of its social and financial benefits, saving for education can never be a priority.

Do you invest in a 529 plan for your children or future children? If not, why not?

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At the beginning of the year, I joined another investing challenge. This was sponsored by Motif Investing, who provided me and several other financial writers and bloggers $500 to invest in strategies each of us would choose. Like last year’s Grow Your Dough competition, this is a relatively short time horizon for me. In 2014, I invested in the brands behind some of the products I use the most: Microsoft, Google, Samsung, Honda, and Canon.

I invested using ShareBuilder, whose $6.95 transaction fees ate away ravenously at my gains both when I bought the stocks and ETFs at the beginning of the year and when I sold. This year, Motif Investing is the sponsor, so I am using that particular platform. After some time, I’ll put together a review of my experiences as a customer of Motif Investing. At this point, I can say it adds a social element to investing, allowing investors to create buckets of investments (to add to Motif’s own buckets). Investing in a bucket, either of your own creation or of someone else’s, requires paying just one fee of $9.95. And because each bucket can contain a number of stocks or other investments, it can easily work out to be a lot less expensive than ShareBuilder and many other discount brokerages.

With Motif Investing, your “friends” linked to your account on Motif Investing can comment on your investments and share their own market analyses. I have yet to decide whether this is a good thing; the financial news media is all ready full of so-called investment experts making predictions about the stock market; now everyone can fashion himself or herself an expert — though you can view someone’s investing performance as proof. If short-term investing results don’t even matter in the long run, this might as well be as useful as a gambling scorecard.

Here’s how I approached my participating in the investing challenge with Motif.

Following the precipitous slide in oil prices at the end of last year, and with the accompanying gas prices hitting lows not seen for years, I once again used some money — an amount whose potential loss wouldn’t hurt my financial condition — to make an investment where I thought I’d be able to buy low and sell high.

Using Motif’s tools, I created a bucket that focuses on energy, mostly oil and gas.

These are the investments I added to my Motif bucket at the beginning of the year, and in which promptly invested about $475:

VDE Vanguard Energy ETF
BNO United States Brent Oil ETF
BOIL ProShares Ultra Bloomberg Natural Gas
OIL ProShares Ultra Bloomberg Crude Oil
TAN Guggenheim Solar ETF
XOM Exxon Mobil Corporation

If you’ve following along with the markets, you probably have a good idea of how this strategy is working out so far. My investments at Motif are already down 13%. The price of oil keeps going down, and prospects for the immediate future look grim. A Saudi prince and the nation’s oil minister seem to be warning the world that oil is in a state of over-supply and under-demand, and we may never see oil at $100 per barrel again.

But even if this is true (although the pattern seems to point to investments always finding new highs — eventually), most commentary seems to point to the price of oil rebounding eventually. So the investments I chose may have some rocky times before recovering. If I could, I’d use further dips as opportunities to invest at an even better bargain, but this competition is limited to the initial %500, and further trades would result in more transaction fees, which I loathe.

On the one hand, investing in oil at the beginning of 2015 with an eye for a recovery by the end of the year may not have been the best choice of an investment. I am solidly in last place, number twenty out of twenty, in the competition’s leaderboard after one week. But there is a whole year ahead of us, and I tend to invest for the long term. If the big oil producers are manipulating the market’s supply to allow the smaller producers, like those behind fracking in the Untied States, to fail, eventually that strategy will change, and the traditional oil sources will want their investments to grow.

Personally, I’d like to see a variety of energy sources eventually overtake those that are damaging to the environment. I’ve included a solar energy ETF in the portfolio to reflect that. I think, though, that oil production is still a major factor in the global economy, and despite warnings about “peak oil” for decades, the resource isn’t drying up anytime soon.

You can also see the leaderboard above, if you are reading this article on Consumerism Commentary rather than on a newsreader, in email, or on another website. Follow along with the twenty of us where we go to show that stock picking is generally a bad idea in the short-term, and people are better off, if investing at all, leaving money in an index fund that tracks the stock market as a whole. If I had done that with my Motif Investing pot of $500, my account tracking the S&P 500 would be down only 1.5% so far this year.

With all the negative news about the price of oil, I figure it’s got to go up someday. Here are a few gloomy articles.

One of the investment advisers I talked to recently but together a potential portfolio for me, and it included commodities, but mostly as a hedge. I have been talking to money managers at some large banks and investment houses (Wells Fargo Advisors and Merrill Lynch) to discuss strategies for my investments, and ways to use my nest egg to my advantage. For example, my asset level will allow me to qualify me for super low interest rates on loans — but in certain circumstances. And loans might be helpful as I look more into investing in businesses, doing more work with start-ups, and helping finance a nonprofit organization.

I’m not making any changes yet, but I’m considering the options that are available to me. I don’t like the idea of anything that’s going to cost me more money, but at a certain level of assets, even those tiny management fees (expense ratios) on Vanguard’s index mutual funds add up to a lot of money lost every year due to fees.

Do you think it’s a good idea to invest in oil or other energy investments right now? What would be your choice for investing $500 with a goal of having the best returns at the end of the year? Or shall we just stop encouraging market timing completely? I know if I absolutely needed my investment at the end of one year, I’d leave it invested in cash. And a cash investment this year might beat out oil, stocks, or bonds, anyway. But I don’t think so. What would you do?

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Throughout the last year, I’ve been participating in a friendly competition among friends. We each placed $1,000 in an investing account (or multiple investing accounts) at the beginning of the year, chose an investing strategy, and tracked progress throughout the year.

I gave the initial details in the beginning of 2014. My strategy was to invest in the products I use the most. I split the $1,000 between Honda, Samsung, Google, Microsoft, and Canon. For some of these investments, I had to use an ETF or an ADR to invest in the company. Honda, Samsung, and Canon are traded on foreign stock exchanges, and Google’s share price was too high for me to invest in the stock directly with about $200.

While the S&P 500 index ended the year up 11.29% (noting that it accomplished this even after the first two days of the year were down), my investment didn’t fare as well. It’s worth pointing out that the transaction fees charged by ShareBuilder ensured I’d be starting this experiment from a tough position. And the commissions come when you buy and when you sell the investments. So unless you’re trading lots of money, transaction fees are way too significant to make trading stocks worthwhile. Of course, you could end up choosing stocks that climb high, but the chances of that happening, especially when you choose a strategy that involves investing in established companies, are low.

And of course, if you choose to invest in companies that are not well established, the risk of failure is higher.

I’m fairly happy that I lost only $15.75. In fact, my performance is a little better than Quicken is calculating here because it is including dividends in the cost basis. I invested with $1,008.82 of my money, and that includes $34.75 for commissions — resulting in an immediate “paper loss” in my investing reports of $34.75 before any stock price changed. One way to look at this is that the performance of the investments failed to cover the cost of investing.

It was a waste of a year that was supposedly good for the stock market. Had I invested in an S&P 500 index fund, I would have fared much better, particularly if I had been able to avoid commission fees.

Thankfully, the rest of my investments more than made up for this strategy’s disappointment. The return for Vanguard Total Stock Market Index Fund (Admiral Shares) in 2014 was 12.56%. The return for Vanguard Total International Stock Index Fund Admiral Shares was -4.17%. Two two bond funds I own returned 7.33% and 9.99%. All in all, my investment returns represented enough so that the cost of commissions in another account shouldn’t really bother me.

I can’t say I’ve learned anything in particular from this experience with the Grow Your Dough Throwdown. It’s been fun to see the choices made by my friends, like Larry, who invested in one stock and later switched to cash; Miranda, who took a dividend investing approach; Tom, who invested in two Canadian dividend-paying stocks; and Glen, who invested in a bucket of stocks, much like I did, but with lower commission costs.

But other than fun, the experienced reinforced what I knew:

Don’t bother picking stocks for the short-term. When you invest in the stock market for the short-term, you’re gambling. Everything that happens to that investment is beyond your control. Unless you hold sway over the management, you are putting your trust in people to make decisions that are best for you as a shareholder in the distant minority. Nobody cares about your needs — you might as well not even be a shareholder. If you’re Warren Buffett and you’re interested in investing in a company, not only will you get a favorable deal unavailable to the little people like you and me, but management will listen to your opinion and take your guidance.

The banks and brokerages are the real winners. Because fees! Keep trading. You’re making the investment companies richer through transaction fees and commissions and you’re unlikely to beat the market’s return with any kind of consistency.

There are too many variables at play in the economy. External factors affect your investments, so investing with a one-year time frame is too volatile. At the beginning of 2014, you couldn’t have predicted that North Korea would (allegedly) hack Sony. You might have expected some unrest in North Korea, but the way this happened was a surprise to investors. That’s only one example of world events that affect stocks — specific stocks and the market overall — over a short-term time horizon.

Stick to index funds. At this point in my investing career, it’s been suggested I could beat the ridiculously-low expense ratios in my index funds by creating my own basket of stocks that capture the S&P 500. I haven’t decided what to do, but I do know that the lack of fees external to the funds and the inability for anyone to beat the indices consistently is keeping me enamored with a passive investing strategy. The only deviation, other than what I just described, is the possibility of investing directly in companies where I would hold a significant stake. But that’s still a long shot.

Now that the first Grow Your Throwdown has concluded, I’m selling the stocks I held in that investment (and paying the associated commissions). To be honest, I’d rather sell these to raise some cash than selling the stock market and bond index funds I’m holding in my Vanguard investing account. I also plan to stop my automatic reinvesting of dividends and income to provide a monthly cash cushion for my expenses, now that I plan to reduce the income I’m earning from work.

This year, the Grow Your Dough Throwdown is returning, but in a different form. I’ll have more details about that in a few days. Thanks to Jeff for setting up the initial Grow Your Dough Throwdown and continuing the fun in 2015.

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I’ll be honest. When the idea for this article struck me late last night, I had a definitive idea of how I was going to address the topic of conservation mode. But the clarity of day may have changed what I think about the idea.

Throughout my life, I’ve been working with scarce resources. Now, not as scarce as most people living on this planet, but scarce in my environment. After college, time and money eluded me, as I was busy working for an organization that was unable to provide the compensation that would cover my living expenses, which were already low. Working with limited financial resources, I made some living choices out of necessity, like living in an apartment with a group of friends, crashing my newlywed friends’ guest room, and even moving in with my father in his significant others’ house. Talk about an imposition; he had only just moved in there himself.

When you have a new, full tube of toothpaste, if you’re anything like me, you’re more inclined to line the whole length of the toothbrush bristles with the paste when you brush your teeth. When you get to the end of the tube and start rolling up the end, you know a shopping excursion is on the horizon, and you know it’s almost time to spend another $4.00. The price isn’t even relevant, it’s just the fact that you’re running low of a resource. You may start lining only half the length of bristles with the toothpaste; after all, the dentist says you don’t actually need to use more than that.

The same behavior seems to be true regardless of the resource. In the bathroom alone, you use less toilet paper when your last roll is getting thin and less shampoo when the bottle is getting light. You easily adapt and made do with less — and less is all right in these cases. You’re not sacrificing quality of life by conserving toiletries.

But living in this scarcity mode does wear thin a little. You get tired of being low on resources, so you go to the store, replenish your supply, and start the cycle over again while flush and feeling rich.

I’ve found myself doing the same with the money in my checking account. I try to keep $2,000 to $3,000 in my checking account after my credit card payment is made. (I pay for almost all my daily expenses with a rewards credit card and pay off the balance each month.) Because my only consistent income is writing for this website, and because the company that owns it has been reducing the budget, my regular work income has been lower than usual. Therefore, it’s been increasingly difficult to meet my expenses while maintaining a buffer, as I’ve avoided dipping into my investments for income.

So I’ve been living life more frugally than one might expect of someone who sold a profitable business for a good amount of money. When I first started paying attention to my finances and learning about long-term investing, I figured I would need $2 million to retire comfortably and would have to work forty years or more to get there. When a financial planner asked me about my retirement goals recently, I couldn’t even come up with a good answer. On the one hand, I’m already retired — I have a higher level of assets than I ever expected and have no real pressure to work (except the pressure I put on myself) and I am free to spend my days however I want. But on the other hand, I don’t want to live off my assets just yet. I still have more to do, more to accomplish. I’m not done.

Also recently, in a different discussion, an investment manager asked me how much money I needed every month to fund my lifestyle. To be honest, I don’t know. I’ve committed myself as a volunteer to an organization, and my new responsibilities prevent me from living full-time elsewhere or even taking a good amount of time to travel. I still live in the same apartment I’ve had for the last eight years, the apartment I moved into when I finally conceded that my website was a business that was earning real money I could use for expenses. There may be a few indulgences here and there, like a regular massage and home grocery delivery (who really likes walking around a supermarket?) but this seems to be the extent of my extravagance.

So the threat of not being able to pay my monthly bills is something I put on myself. Maybe it’s because this is how I lived for so long, maybe the pressure keeps me aware of my situation. I could sell investments and keep a healthy amount of money between checking and savings, but that would mean watching my investment account decrease. And I’ve grown accustomed to it increasing for the last decade. Nevertheless, that’s likely going to be the plan this coming year.

I’ve believed that forcing myself to live more frugally than necessary is a good thing. Science may disagree with me. I’ve always understood that dealing with urgent problems prevents people from making solid decisions about the future. (See Why Some People Can’t Save: A Matter of Urgency.) However, there must be some benefits to living close to the edge. You’re on your toes, you’re not getting comfortable and lazy, and you keep your eyes open with hyperawareness.

When you have enough resources, your mind isn’t consumed with survival strategies. You are free to cogitate on a higher level.

Poor farmers in India actually perform better on cognitive tests at the end of the harvest season, when they are flush, than at the beginning, when they are running low on money. The effect? The equivalent of a 13-point drop in IQ. (Psychology Today)

We then completed a battery of studies where we saw that manipulating scarcity has an enormous impact on people’s cognitive capacity. First… we went to a mall in New Jersey where we asked people to complete tests measuring cognitive control and fluid intelligence, a component of IQ. We had them do these things while they were contemplating a financial scenario — something that’s manageable, requiring $150 to fix a car that broke down, or more demanding, requiring $1,500 in car-related expenses. We divided the participants by household income and found that the rich people in the mall did equally well on the cognitive tests, whether they were thinking of the challenging or the less challenging scenario related to the car. The poorer people in the mall were equally capable cognitively and did just as well on fluid intelligence as the rich when they were thinking about the manageable scenario. But once they contemplated the more challenging scenario, their scores went way down. Simply being preoccupied with this demanding financial challenge makes them perform worse. (American Psychological Association)

A person who manipulates his money to trick himself into a situation where resources is scarce is still someone who knows his problems aren’t serious. If resources are scarce out of necessity, decision-making skills are impaired. If resources are scarce but within control, as they would be for someone who has the resources but chooses not to deploy them, cognitive reasoning may be normal, but I would have to imagine that not using money that is available might raise a question on whether that in itself is a good decision.

What’s really bugging me, though, is the potential for a market correction. In the past, this wouldn’t have bothered me, because I was in an asset accumulation phase. I could take advantage of market lows and invest for the long-term. Now, I will be able to use a market correction as an opportunity to rebalance my portfolio, but it’s not the same as putting “new money” — income from working — into the market for the best long-term advantage.

It’s a waiting game. In a few months, I’ll have some more freedom to start new businesses, but I have to manage my expectations. I probably won’t have another business as lucrative as this website was for me. But I have ideas and I’m excited about putting them into action.

Do you force yourself into scarcity mode, or do you allow yourself more freedom? Which do you see as a better approach to long-term wealth building?

Photo: Flickr

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Is Acorns the Next Best App for Investing?

by Luke Landes
Acorn App

Acorns allows investors to divert small amounts of money to the stock market, $5 at a time. And all you need is your mobile phone. Have you seen the fees?

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The One Action You Need to Take in Any Market Correction

by Luke Landes
Bear Market

As of today, the Dow Jones Industrial Average has erased all of its gains this year. We’re not quite in “market correction” territory, though. The S&P 500 is still up year-to-date, but it isn’t presenting as fantastic a return as was evident earlier in the year. We could be getting to the point where the ... Continue reading this article…

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If All Investments Are Expensive, Where Can You Invest?

by Luke Landes
Dinosaurs

Neil Irwin at the New York Times points out that all asset classes around the world are expensive compared to their historical prices. If that’s the case, is there any investment class available that has the potential to provide great returns over the long-term? Stocks and bonds; emerging markets and advanced economies; urban office towers ... Continue reading this article…

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Grow Your Dough Throwdown: Second Quarter Results

by Luke Landes
Grow Your Dough Throwdown

Here’s my latest Grow Your Dough Throwodwn update as well as some information about the companies I’m investing in.

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Growing My Dough: The Latest Look at My Portfolio

by Luke Landes
Grow Your Dough May

CNN is sounding the alarm bells. The “Fear and Greed Index,” which is a strange measure of market sentiment, has passed the threshold into the “extreme greed” level.CNN is sounding the alarm bells. The “Fear and Greed Index,” which is a strange measure of market sentiment, has passed the threshold into the “extreme greed” level. ... Continue reading this article…

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Should You Become an Angel Investor?

by Luke Landes
Angel Investing

Two years ago I wrote about how I was “winding down”, whatever that means, after selling Consumerism Commentary, in the sense that I was looking to involve myself in new projects. I was considering, among other things, investing a portion of my assets in start-up companies. In fact, I signed up for a service called ... Continue reading this article…

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Buying and Selling Stocks Is Often a Losing Strategy

by Luke Landes
Grow Your Dough Throwdown - March 2014

After three months, my $1,000 investment portfolio, nicknamed “Feemaggeddon,” is lagging. This portfolio is part of an investing challenge, the “Grow Your Dough Throwdown.” It’s a lighthearted competition featuring several top financial bloggers. I have two goals with this portfolio. The first is to test a specific popular investing philosophy. Among those who offer advice ... Continue reading this article…

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Grow Your Dough: My Investing Results as of February

by Luke Landes
Grow Your Dough February

As I mentioned at the beginning of the year, I’m participating in an investing competition — well more of just a game than a competition — with several other writers and bloggers this year. The premise of the game is to start the year with $1,000 invested in discount brokerages of our choice, and track ... Continue reading this article…

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Should You Open an IRA With Your Bank? Ally Bank Offering $250 Bonus

by Luke Landes
Cash

It’s easy for me to look back in time and analyze the faults of my twenty-two year-old self. If only I had started saving and investing sooner, I’d be in a better financial situation. My younger self would assume I had forgotten what it was like for me during that time period, when I had ... Continue reading this article…

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Grow Your Dough Throwdown

by Luke Landes
Throwdown-Dec2013

I’ve joined a number of other financial writers in the “Grow Your Dough Throwdown,” a stock market competition. At the beginning of 2014, each of us will invest $1,000 in the stock market through a discount brokerage. We can trade as often as we like, and publicly track our investments throughout the year. It’s similar ... Continue reading this article…

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401(k) Contribution Limits for 2014

by Luke Landes
401k

Looking for the latest 401(k) contribution limits? Click here. After two years of increases, the IRS is not adjusting the retirement savings opportunities for American taxpayers this coming year. From 2009 through 2011, the maximum contribution to retirement accounts — 401(k) accounts, 403(b) accounts, most 457 plans, and Thrift Savings Plans, was $16,500. In 2012, ... Continue reading this article…

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The Myth of Early Retirement for the Middle Class

by Luke Landes
Is early retirement a myth?

Financial independence has become an important topic for me over the course of my adult life. It’s been a progression. First, I discovered the concept of spending less than I earn — simple mathematics but a behavioral change — and how that, in addition to making better choices, could eventually lead to financial independence through ... Continue reading this article…

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Should Millennials Trust the Stock Market?

by Luke Landes
Should millennials trust the stock market?

First impressions often form the basis of how a young person perceives an object for the remainder of that person’s life. The object in question could be another person, a business, an industry, a group of people, or even a part of society. Deeply-seated beliefs are entrenched during several stages of formative development. Psychologists point ... Continue reading this article…

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IRA Balances At Five-Year Highs: Time for a Retirement Check-Up

by Luke Landes
IRA balances at an all-time high

Thanks to the stock market’s upward trend since the recession (if the trend hadn’t been upward, we couldn’t say “since the recession”), policy changes that allow investors to convert traditional IRAs to Roth IRAs without limit other than the income tax bill, and perhaps even younger savers inspired to plan for their retirement by saving ... Continue reading this article…

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Variable Annuities Customers Facing Benefit Reductions

by Luke Landes
Money - Variable Annuities

When people find out I’ve been writing a blog about personal finance for ten years — yes, it seems crazy, but the tenth anniversary of Consumerism Commentary is Tuesday — they recognize it is an opportunity to share their financial troubles and triumphs. I’m a good listener. For the most part, I am happy to ... Continue reading this article…

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School Gives Club of Teens $100,000 to Play in the Stock Market

by Luke Landes
Teens investing

For many children, one primary exposure to just a piece of financial literacy is the Stock Market Game. The public elementary school I attended pitted a hundred or so fourth-graders against each other. After a few months, the student with the highest overall account value, not taking fees or expenses into account like the real ... Continue reading this article…

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