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Highlights of the October 2007 Issue of MONEY
[Full stories also available online at www.CNNMoney.com ]
MONEY 35th ANNIVERSARY SPECIAL ISSUE
COVER STORY: ROAD MAP TO A RICH LIFE
THIRTY-FIVE MINUTES TO RICHES, by Asa Fitch, Amanda Gengler, Josh Hyatt, and Ismat Sarah Mangla, page 75
In honor of our anniversary, 35 is the theme of this story. We offer 47 smart ways to get on track to a rich life in 35 minutes or less (often far less in our timed tests).
Whether you're running a retirement plan, hoping to raise your credit score, save money on health care, or aiming to become a master of home finances, MONEY has some fast and easy tips that will send you on the road to riches.
PLUS: Six plans to reach your long-term goals in 35 hours, 35 days, 35 weeks, 35 months or 35 years.
ARE YOU BETTER OFF?, by Pat Regnier, page 110
American life has grown fantastically richer since this magazine began. So why do you feel so much less secure?
In one sense, the answer to the question "Are you better off?" is clear. Most families are materially richer. And the big economic shocks that made the 1970s so scary seem to have disappeared. Amid this plentitude and choice, you have more opportunity than ever to become who you want to be. On the other hand, it sure seems harder to plan for the future when your job or even your career could move to some other (cheaper) part of your industry's smooth-running global network. Saving for college or retirement has become tougher too. The one choice you don't seem to have anymore is getting comfortable with a routine — and for grown-ups with a family life, a mortgage or a passion for a certain kind of work, that's a deeper loss than many New Economy boosters would care to admit. This is the irony: Even as the risk in the overall system has declined — and perhaps because it's declined — you and your family face the prospect of greater financial turbulence. MONEY analyzes the issue and offers some great advice to calm your nerves.
ARE YOU A BETTER INVESTOR?, by Jason Zweig, page 122
Over the past 35 years, investing has become simple, cheap and convenient. Now it's a snap to build your wealth — or destroy it.
Less cost, more choice and greater convenience: Investing has never been simpler. The birth of the index fund in 1976 enabled anybody with a couple thousand dollars to own every major U.S. stock for less than 0.2% in annual expenses. More recently, indexing has spread to other markets — bonds, foreign stocks, real estate — so you can minimize your costs and maximize your opportunities for profit by covering every base. Meanwhile, the electronic ease of dollar-cost averaging (automatically routing a fixed amount from your bank to your index funds once a month, every month) means you can be a committed investor without ever lifting a finger, second-guessing yourself or timing the market. Combine these two strategies of indexing and dollar-cost averaging and you can hold the entire planet in a single portfolio on permanent autopilot. Nothing could be simpler. One thing, however, hasn't changed over the past 35 years: human nature. MONEY explores why and what to do about it.
THE NEW AMERICAN DREAM SURVEY
FOREVER YOUNG, by Marlys Harris, page 84
Now that they're in midlife, boomers are imagining the American dream all over again, a new MONEY survey reveals. Topping the agenda: closer relationships and more fun. And, oh yeah, they still want to change the world.
Boomers are starting to form a new agenda, a reinvention of the American dream that emphasizes friends and family over making money, having fun over working hard, and making a difference in the community and the world. (In other words, you might say, they're going back to the future). That's among the conclusions of an exclusive survey of nearly 3,000 boomers conducted for MONEY by Clark, Martire & Bartolomeo, an Englewood Cliffs, N.J. polling firm. Above all, boomers want what they do to mean something to themselves and others. And because of the force they exert by their sheer size, what boomers want, the rest of the country seems to want too. Whether boomers will be able to achieve this new American dream, the survey makes clear, is still an open question. MONEY investigates the answer.
FROM DREAM TO REALITY, by Donna Rosato and Carolyn Bigda, page 92
Five baby boomers, five cherished lifetime goals. And five smart game plans for making them come true.
Is there something you've always dreamed of accomplishing but haven't gotten to yet? Maybe you haven't figured out how to lay the groundwork. Maybe you can't imagine how you'd find the money to make it happen. Or maybe you're just now arriving at the time in your life when you can focus on that fantasy, and you could use a little inspiration. MONEY editors recently asked baby boomers to fess up to their most fervent dreams — and were inundated with e-mails from readers pouring out their longing for everything from their own business to the trip of a lifetime. MONEY brings you five personal stories, as well as concrete advice from financial planners and other experts on how they can make their fantasies come true.
MORE IN THIS ISSUE:
INSIDE THE MIND OF YOUR ADVISER, by George Mannes, page 100
Before you take your financial pro's advice, consider what's behind it.
When you seek out the guidance of a financial professional, it's for something big, something you feel you can't handle yourself. Your options, as you seek help, are plentiful. More than 380,000 professionals in the U.S. make a living by giving people financial advice, according to Tiburon Strategic Advisors, a financial consulting firm. What's tougher to figure out is something that's not printed on the business card or fee schedule: the motives behind your planner's advice. Your biggest challenge isn't to avoid crooks and incompetents (though both exist). It's to make sure you're getting the most from an adviser with good intentions — but with interests that may run counter to yours. The more you know about these motivations, the better you'll be able to ask tough questions and choose the best action for yourself, not for the planner. MONEY helps you decide where greed is good, the sins of commission, the sum of all fees, and the best funds (you can sell).
KEEP YOUR ZEN ABOUT THE DOW, by Asa Fitch, page 21
Don't let the stock market's recent gyrations disrupt your inner calm. Stay centered by meditating on these three numbers.
- 10.7 — percentage the Dow fell on intraday trading between July 17 and August 17.
- 5 — months it took for the market to recover from the last credit-induced stock crisis.
- 20 — percentage of returns that the average investor frittered away by trying to time the market over the past decade.
YOUR MONEY & YOUR LIFE, by Jean Chatzky, page 28
The buddy system can make you richer. Research suggests that hanging with the thin crowd can shrink your waistline and fatten your wallet.
Academics and other researchers who have dipped a toe into the networking pool are finding that if you're surrounded by people who save and invest, you're likely to do the same. And if your pals spend like crazy, well, you're in trouble. So how do you make the network effect work for you? Money has some helpful hints.
STARTING OVER (AND OVER), by Donna Rosato, page 35
Relocating can be a great way to get ahead in your career, but it can also be hazardous to your personal finances. Just ask Greg and Laurie Allan.
There's a good reason that relocating ranks alongside divorce as one of life's most stressful events: It's expensive. Even if you're moving for a higher-paying position, your spouse may have to quit a job and look for a new one, which could pummel your household income. You might be forced to sell into a frighteningly declining real estate market. Then there are all the expenses of settling in, from buying furniture to putting in an updated kitchen. The Allans were lucky: They sold their two-bedroom fixer uppers in Yuma for a profit before the housing market stalled, and the cost of their house-hunting trips and move to a larger home was covered by Uncle Sam. But even they suffered some sticker shock settling into O'Fallon, Ill., a suburb 30 miles east of St. Louis. They found the cost of everything from gas to food to lawn care is higher. Think you might relocate too? MONEY tells you how to keep your finances on track.
PLUS: Three fast fixes: Moving towards their goals.
TRAPPED BY THE MORTGAGE MELTDOWN, by Les Christie, page 49
Tighter lending standards have put many home sellers, owners and buyers in a bind. Don't be one of them.
Whether you're a home seller, owner or buyer, by this point you've got to be feeling a little rattled. The bad news about the housing market seems never ending. While it's too soon to see the impact reflected in the numbers, the immediate future is clear: As lenders tighten their borrowing standards, fewer people will qualify for mortgages. Ready for some good news? Here you go: First remember that all real estate is local, and some markets are doing just fine, thank you — in fact, more than half of the major housing markets in the country have yet to see prices drop. Even if yours is in the grim half (or soon will be), there are steps you can take to minimize the damage if you're planning to sell your house anytime soon. MONEY explains why homeowners who plan to stay put for a while may not have anything to worry about. And if you're a buyer — well, this market may be the opportunity of a lifetime.
IS IT SAFE YET?, by Michael Sivy, page 59
The meltdown in the subprime mortgage market will create real bargains among bank and brokerage stocks. But you don't need to rush in right away.
If you're smart enough to spot bargains after any kind of market crisis, you'll almost certainly buy too soon. With a few exceptions, like the rebound immediately after the 1987 crash, crushed stocks need months to recover. Rush to buy and your money will remain stagnant — or worse, you could get hammered in a final sell-off. The recent collapse in financial stocks, caused by the subprime mortgage crisis, will create exactly the kind of bargains that can boost your long-term returns — as long as you're patient and willing to wait for the correction to run its course. MONEY gives the advice you need to get the timing right and buy the strongest stocks.
DEPARTMENTS
START: It's Crunch Time The best ways to cope with tighter credit. Do The Right Thing How long are we supposed to support our grown child? PLAN: Do it Now Make yourself invisible to marketer's databases. Savings and Credit Why you don't need to worry about money funds. The Boom Years Websites like Facebook and LinkedIn matter in your career. Yes, even your career, boomer. The Long View How to find out what an annuity really costs. HOME: How to Cut Your Energy Bills In Half Five great efficiency-enhancing ideas in a special booklet. Field Test A home espresso machine can save you latte money. INVEST: The Answer Guy How can I find funds that own my favorite stocks? Fund Watch Why bad returns don't make a bad fund.
MONEY is available in digital format. To access this version go to http://digital.money.com
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