Fourth Quarter Webinar Summary: My Key Takeaways

 

We are at the end of 2025 and it’s time for my fourth quarter summary of takeaways from webinars that I recently attended. Below are seven nuggets that stood out to me as I reviewed notes taken in my personal learning journal:

 

Budgeting for Happiness- The more money and time (e.g., commuting) that people spend on cars, the lower their life satisfaction, unless the money and time are spent on road trips with family or friends. High housing costs and car payments decrease happiness and leave less room for savings and shared experiences. Too much “stuff” can drag people down emotionally.

 

A Fulfilling Retirement- Three key factors in a fulfilling retirement are money, relationships, and health. All three require investments of time and/or money. Guaranteed income sources (Social Security, pension, annuity) provide peace of mind. Retirees without them tend to spend less and feel more stress about managing, and not running out of, money during their lifetime.

 

Financial Contentment- Three predictors of financial contentment are how much money you have, your “reference class” (who you compare yourself to), and generosity to others. The happiest group by wealth is people with $5 million to $10 million of assets. Why? They have significant wealth but not the stress of ultra-wealthy people where money complicates things.

 

Content Creator Income- AI is having a major impact on personal finance content creators. Some sites that people used to write for dropped their freelancers. In addition, search engines like Google push AI generated content to the top and many users no longer look for articles anymore. This decreases revenue derived from sponsored links when few people click on them.

 

Retiree Tips- Take care of your physical body. Nothing will impact your retirement quality more. Retirees can be happy at all asset levels. People are happier spending non-portfolio assets than taking withdrawals from invested assets so “practice” income withdrawals before retirement. A smaller gift made to children earlier in life is often more impactful than a big gift later.

 

Other Useful Tips- Make a “stop doing list” (i.e., things that you want to do less of). Stay away from any investment that you do not understand (e.g., crypto, AI) and cannot explain simply to others. Do Roth conversions in stages: take a tax hit a little at a time or you will have a big tax hit later. Choose a target date fund for ten years after you retire if you want to be less conservative.

 

Miscellaneous Insights- Current workers age 63 and older need to be aware of the two-year lookback period for the IRMAA surcharge for Medicare premiums. Money left in health savings accounts to non-spouses is subject to ordinary income tax within one year of the account owner’s death. Thirty states now have financial education mandates. Good retirement savers can be bad spenders as they try to avoid running out of money without leaving “too much on the table.”

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Generative AI: What a Difference Two Years Has Made!

ChatGPT, a generative artificial intelligence (AI) platform, was launched in November 2022 and had one million users in one week and 100 million in 2 months. It was the fastest tech platform ever to reach 100 million users and, by February 2023, I was hooked. Today, about 1 in 5 workers are using ChatGPT for their work, myself included.

 

A lot has happened with generative AI in the three years since its launch, so I thought I’d share some personal Barbservations:

AI Use is Not New- Even before ChatGPT came on the scene, I had used AI in the following ways: Microsoft Word and cell phone texting that anticipated (sometimes incorrectly) the next word that I would use in a sentence, pop-up ads based on online searches, shopping suggestions based on past purchases, and Alexa and other virtual assistants.

 

It Makes Suggestions- In 2023, I told ChatGPT the output that I wanted via a detailed prompt. It then did what I asked, but no more. I was done. Today, like an overly ambitious student trying to get an “A” from a professor, it asks me if it can do more for me such as creating a checklist or PDF documents.

 

AI Output Pops Up Automatically- Three years ago, I had to seek out a generative AI content by proactively logging in to ChatGPT. Today, if I use the search engine Google, content from their AI platform, Gemini, generally pops up first to answer my question, along with the information sources that were used to generate the AI answer.

 

Text to Graphics Capabilities- In its early years, ChatGPT could only be used for text prompts for text output. I tried to create images and got an error message. Today, you can give ChatGPT a text command to create a graphic image. My experience is that it takes a “conversation” with several rounds of prompts to get exactly what you want.

 

Hallucinations Still Occur- Hallucinations are authoritatively sounding AI-generated statements that are wrong. They were a problem in 2022 and continue today. Two prompts that frequently cause problems are math calculations and reference citations. Thus, AI-generated content must always be considered a “first draft” subject to review and revisions, if needed.

 

Content Controls- Since hallucinations are an issue, some organizations have created their own data sources, called large learning models, for AI to generate content from. LLMs are the underlying technology that powers generative AI applications that are trained on a massive amount of text to understand, generate, and process human language. I recently experimented with this and asked ChatGPT to create content only from my website and archived blog posts.

 

My best advice for using AI is to play around with it and have fun. It will probably surprise you and may help you accomplish everyday tasks such as planning a meal and trip planning.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Seven Financial Guidelines and Shortcuts With Numbers

 

I recently taught a new class about common financial planning guidelines that include numbers. I started the class by noting that a guideline is a recommended principle, course of action, or piece of advice. Unlike rules and laws, which are mandatory, guidelines are not action steps. Instead, people follow them voluntarily to guide their daily actions and decisions.

 

Interestingly, however, many personal finance guidelines do use the word “rule.” Examples include the 4% Rule and the Rule of 72. Once again, they are not rules, as in required actions, but, rather, suggested calculations. Some financial guidelines involve ratios which are derived from combinations of numbers.

 

Below are seven examples of ten financial guidelines with numbers:

 

20/4/10 Rule- This is a guideline for car loans. It suggests making a 20% down payment (e.g., $10,000 for a $50,000 new car), financing the car loan for no more than four years, and keeping monthly expenses under 10% of gross income (e.g., $5,000 with a $50,000 income).

 

50/30/20 Rule- This is used as a guideline for household budgeting. It suggests spending 50% of household income on needs, 30% for wants, and 20% for savings and debt repayments. For example, with a $50,000 annual income, $25,000, $15,000, and $10,000, respectively.

 

Consumer Debt-to-Income (DTI) Ratio- Suggests that all monthly debt payments (excluding a mortgage) should not exceed 15% of net (take-home) pay and a 20% DTI ratio is considered a “danger zone.”  For example, the ratio for monthly debt of $600 and $4,500 net income is 13.3%.

 

Rule of 25- A common retirement savings target is 25 times your desired retirement spending (not covered by guaranteed income like Social Security and a pension) by the time that you retire. Example: if you need $60,000 per year, 25 x $60,000 = $1,500,000

 

Rule of 72- This is a shortcut to estimate how long it takes to double a sum of money at a certain interest rate, Simply divide the interest rate into 72. For example, with 6% interest, it takes 12 years (72 ÷ 6) to double your money.

 

Three Fund Rule- This is a simple guideline to build a low-cost, globally diversified, investment portfolio with just three mutual funds: a U.S. total stock market index fund, an international stock index fund, and a U.S. total bond index fund.

 

Three to Six Rule- Setting aside enough savings to cover three to six months of essential living expenses (e.g., housing, food, utilities, insurance, transportation, and debt repayments). If this is not possible, save what you can. Any emergency fund savings is better than none!

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

 

 

Health and Wealth Connections

 

Health and wealth are both important resources for living a happy and successful life.  People in poor health often die young and spend thousands of dollars (that could have been invested) on health care costs.  On the other hand, those who practice recommended health behaviors are more likely to exceed average life expectancy and need a large nest egg to insure that they don’t outlive their assets.

From my book, Small Steps to Health and Wealth, below are ways that health and wealth are related:

¨   Problems Generally Start Small- Weight problems usually develop gradually, such as gaining 3 to 4 pounds a year due to increasingly sedentary lifestyles and larger food portion sizes.  A comparable financial example is “perma-debt” (i.e., a permanent debt balance on credit cards) and increasingly higher interest and/or fees as outstanding balances rise. 

 

¨   Less Stigma Than Before- With many Americans having “weight issues” and almost 500,000 non-business bankruptcies filed in 2024, health and financial problems have gone “mainstream” and are more tolerated, if not accepted, by society.  When many people are doing the same thing or have the same characteristics, it is hard to view them as “abnormal.”

 

¨   Impacts on Job Productivity and Discrimination- Overweight and unhealthy people often have a difficult time getting hired and some may have difficulty performing the duties associated with their job. Similarly, personal finance problems also affect job performance.  One widely quoted study estimated that 15% of workers have financial problems (e.g., high credit card debt) that negatively impact their job productivity.

 

¨   Lots of Technical Jargon- Both the health and medical fields have jargon and acronyms. Think BMI (body mass index) and LDL cholesterol and REIT (real estate investment trust) and NAV (net asset value, a term used with mutual funds). Worse yet, personal finance and health information sometimes contains contradictory “expert” opinions or research results, making it very difficult for consumers to know how to interpret and use conflicting findings.

 

¨   Fear of Drastic Changes- Many people believe they must make major lifestyle changes to be healthy and wealthy.  So, instead, they “freeze” and do nothing. In reality, every small step makes a difference whether it is increasing physical activity, eating healthy snacks, or saving 1% or more of your salary for retirement. The trick is to get started today.

 

¨   Restrictions Help Avoid Problems- Some people find it helpful to lose weight by eating portion-controlled foods (e.g., convenience food entrees and nutritional diet drinks) that contain nutrition labels and calorie counts.  An example of a financial restriction is having tax-deferred retirement plan savings automatically deducted from your pay.

 

¨   The Longevity Connection-  People who practice healthy behaviors, such as not smoking, exercising regularly, and eating at least five fruit and vegetable servings daily, decrease their risk of dying prematurely.  They also need to accumulate adequate wealth so they don’t outlive their assets.  Stated another way, the “price” of better health is the need for increased wealth. 

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.