Brain Candy –   enrich your understanding of your own finances  – HumbleDollar

Brain Candy Jonathan Clements  |  August 29, 2020

IT SEEMS QUAINT now, but a quarter century ago conversations would often degenerate into arguments over facts. How much do homes typically appreciate? How much does the average American have saved by retirement? What does a nursing home cost? Such questions would trigger tedious debates built on anecdotal evidence and half-remembered newspaper articles. But as my father—who died in 2009—often remarked during the final decade of his life, there’s no point anymore in arguing over facts. Instead, we can just go on the internet and find the answer. Even with the risk that we’ll trip across “fake news,” the internet remains an astonishing repository of information and insights, including financial insights.

Want to enrich your understanding of both your own finances and the financial world more broadly? Here’s a host of tools and charts that I find especially fascinating:

How your net worth compares. Using the Federal Reserve’s Survey of Consumer Finances, DQYDJ.com will tell you how your net worth—either with or without home equity—ranks relative to your fellow Americans. (In case you’re curious, DQYDJ stands for “don’t quit your day job.”)

How your income ranks. DQYDJ can also tell you how your individual income compares to other Americans, how your household ranks and how your income stacks up against those who are the same age.

What the S&P 500 has returned. For years, basic market performance data was hard to come by. Not anymore. DQYDJ has calculators that will tell you the total return for a specified period for the S&P 500 and the Wilshire 5000.

Want to see year-by-year returns for stocks, bonds and cash? Check out this page maintained by New York University finance professor Aswath Damodaran.

How much house you can afford. That’s pretty much the name of a calculator offered by HSH.com. When you purchase a house, closing costs are often the nasty surprise. You can get a handle on those with a calculator from SmartAsset.com.

How long your retirement nest egg might last. Check out the easy-to-use tool from Vanguard Group. Keep in mind that the tool uses historical returns—which may prove too rosy. Also try Vanguard’s retirement income calculator.

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Source: Brain Candy – HumbleDollar

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