Matt Bell's Blog

Since the S&P 500 hit a low of 4,983 on April 8th of this year, the stock market has come back strong. Despite a tariff-fueled shaky first quarter of the year, 2025 is shaping up to be a good year for investors. 

However, just as surely as nighttime follows daytime, bear markets always follow bull markets. The only questions are, “When?” and “Are you ready?”

No one knows the answer to the first question. The good times could go on for a while, or they could end today. As for the second one, ideally your answer would be, “Yes.”

But what does it mean to be ready for a bear market?

Managing expectations

Most of us find it very difficult to envision the future. And we feel the pain of loss much more acutely than the pleasure of a similar gain. That’s why, when things suddenly turn bleak in the stock market, many people get scared and sell.

Here’s the problem with that. If fear drives you out of the market, fear will tend to keep you out of the market through much of the recovery that follows.

It’s often only in the middle or end of a bull market that investors who have been on the sidelines get back in.

Fear drives many people out. Fear of missing out eventually draws many people back in.

There’s a better way.

It’s all about process

The longer I’ve studied investing, and of course, the longer I’ve actually invested, the more convinced I’ve become that success is not about choosing the right investments, and it’s definitely not about market timing. It’s about choosing the right investment process.

Here are the key criteria for a good investment process:

It’s objective and rules-based. Don’t invest based on a money manager’s predictions about the future, your gut feel about a particular investment, or because everyone’s pouring money into the investment-of-the-moment. Instead, use an investment process that’s based on clear, unbiased, mechanical rules that point you to specific investments and tell you if and when it’s time to sell those investments and replace them with something else.You fully understand and agree with its design. You should be able to explain to a teenager how the process works and why you believe in it.It has a demonstrated track record of success. That doesn’t mean year-after-year of double-digit returns. No investment process can promise that. But over a more reasonable, longer time frame, it should have a track record of delivering a sufficient enough average annual return to meet your investing objectives.It’s emotionally acceptable to you. That means you’re comfortable taking whatever steps are necessary to execute the strategy. And it means you have a sense as to how volatile the approach may be and are willing to stay with it in up markets and down markets.

If you’re using an investment process that meets those standards, you can confidently ignore the headlines about this year’s “can’t miss” investments and your co-worker’s latest hot tip. And you’ll be in the best position to weather market downturns without succumbing to fear.

Is there a process behind your investment decisions? Does it meet the criteria described above? Next week, I’ll give some examples of investing processes that do.

Weekly list of curated personal finance articles from around the web.

How to achieve true financial freedom (No Sidebar). “Less is more” — it’s more than an architecture philosophy, it’s a good financial philosophy as well.

Why you really do need travel insurance to protect your pricey vacation (Wall Street Journal). I can vouch for this one. I would never travel overseas without it.

I paid rent today. I also collected rent. (Afford Anything). Insights on real estate investing and how the price-to-rent ratio can help.

Financial regrets—we have probably all had a few (Sound Mind Investing). We can’t go back, but we can move ahead having learned some lessons from past mistakes.

10 frugal living habits that will wake you up from your boring life (This Evergreen Home). Hard to argue with any of this.

Should I rollover my 401(k) to an IRA? (Marriage, Kids, and Money). An important decision when leaving an employer.

How we became actual real estate investors (The White Coat Investor). One person’s real-life lessons on what to do and what not to do when buying property.

Debit and ATM card scam involves fake texts and porch piracy. How to protect yourself (USA TODAY). “Debit cards ranked as the top payment method for both attempted fraud and actual dollar losses in 2024.” See also, Paying with plastic—safely (Sound Mind Investing).

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Okay, so you’ve made all the right moves in planning your next car purchase. You’ve kept your current car at least 15 years past its model year. You’ve come up with two or three viable options of cars that don’t just look good, they also get good gas mileage and have good safety ratings.

You’ve done some comparison-shopping to see where you could get the best price. All set? Not quite. There’s more to consider, such as the projected cost of maintenance and repairs.

With some cars, even minor fender benders could lead to big repair bills. Low-speed crash tests conducted by the Insurance Institute for Highway Safety on 11 luxury cars led to repair bills ranging from $5,200 all the way up to a whopping $14,000.

One of the best online tools for figuring out how much cars really cost can be found at Edmunds.com. Its True Cost to Own calculator enables you to compare different vehicles based on the estimated cost of maintenance, repairs, fuel, and other factors.

Interested in a 2020 BMW 330i sedan? You could probably buy one for about $23,600. However, according to the True Cost to Own calculator, its five year total cost is estimated at nearly $55,000.

Willing to go for a 2022 Toyota Camry LE sedan instead? It’ll cost you about the same amount of money to buy. However, over the course of five years, its True Cost to Own will be a lot less—an estimated $34,300.

The Toyota’s lower cost to own is mostly due to its lower maintenance and repair costs. A friend who owns a BMW tells me he spends over $100 just for an oil change!

The next time you’re in the market for a car, be sure to factor in all of the costs of ownership.

What type of car do you drive? Have you been happy or unhappy with how much it has cost to keep it maintained?

Weekly list of curated personal finance articles from around the web.

The secret prayers of gamblers (Christianity Today). “There is so much gambling. So much restless desire.”

Is $1 million enough to retire? (Clark Howard). It has long been assumed to be the financial finish line. Is it the right goal?

Death, estate planning among most avoided family topics: survey (Talker Research). Getting the right paperwork in place is part of good estate planning; so is talking about your wishes with your loved ones.

How your temperament affects your money mindset (FaithFi). It’s so helpful to know your temperament and that of your spouse.

Five money habits every young family should have (Kiplinger). Practical ways to move in a helpful financial direction (There’s one glaring omission in this article—no mention of generosity!)

Have you answered George Kinder’s questions? (The Best Interest). Simple questions that can add a lot of clarity to what you’re pursuing.

Don’t fall for the rigged college game (NY Times). “The frantic competition that we’ve made the norm is based on a lie about what makes a college education truly valuable.”

21-year-old joined the National Guard to pay for college—he’ll graduate debt- free with over $100,000 saved (CNBC). The military isn’t for everyone, but it can be a great way to pay for college, build character, and more.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

In 2016, a study published in Mayo Clinic Proceedings quantified how many Americans have a healthy lifestyle. Can you guess what number it came up with? Less than three percent!

In order to qualify, a person had to meet four criteria: Moderate to vigorous exercise for at least 150 minutes per week, a diet score in the top 40 percent on the Healthy Eating Index, body fat of under 20 percent for men and 30 percent for women, and not smoking.

It made me wonder what percentage has a financially healthy lifestyle. Of course, that would require some criteria that define “financially healthy.” I gave it some thought and came up with the nine qualifications below.

Go through the list and see if you can say “yes” to each one. Some questions will be easier to answer than others. For the more subjective ones, just do you best and go with your initial response.

1 – Do you understand and follow what your faith teaches about money? I make no secret about the fact that I’m a Christian. If you are as well, do you know what the Bible teaches about money and do you consciously strive to use money in a way that’s in synch with that teaching? I know I have some Jewish readers as well. Do you know what your faith teaches on this topic and are you following that teaching?

2 – Do you use a plan to proactively manage money? Yes, I’m talking about a budget. Not a general sense in your head as to how much you can spend on this or that. An actual written plan, either on paper or a computer, that shows your income allocated across the various categories of giving, saving, investing, and spending on everything from groceries to clothing to vacations and all the rest. Along with a method of tracking the actual inflow and outgo of money in your life, and regular reviews of how your actual use of money is lining up with your plan.

3 – Do you give generously? For most, I’d define this as giving at least 10 percent of your gross income. For some people, this may feel legalistic. But 10 percent is where God started his Old Testament followers, so it seems like a good starting point for us as well. I realize that some people reading this are in significant financial difficulty. If that’s you, feel free to define “generously” differently.

4 – Do you have adequate savings? Having three months’ worth of essential living expenses in a separate savings account would get you a “yes” here. Having six months’ worth gives you the right to use an exclamation point.

5 – If you have a mortgage, is it “reasonable?” In other words, does it cost no more than 25 percent of your monthly gross income to cover the combination of your mortgage, property taxes, and homeowner’s insurance? All the better if it takes less than 20 percent. Housing is most people’s largest expense, and I’ve found that 20-25 percent is the max most people can spend in this category while still living generously, saving and investing adequately, and living with financial margin.

6 – Are you debt-free (the only exception is a reasonable mortgage)? That means no vehicle debt, no student loan debt, no credit card balances carried over from month to month—no debt other than reasonable housing debt. Or, if you have debt, working a plan to get out of debt gets you a passing score here as well.

7 – Are you investing knowledgeably for your later years? That means you’ve run some numbers to determine how much you may need to have saved by the time you’re ready to retire, and how much you should invest each month right now to get there. It also means you’re making those investments (for most, that means investing at least 10 percent of monthly gross income), and are using a trustworthy process for choosing specific investments in an informed way.

8 – Are you adequately covered by insurance? If you’re married, and especially if you have kids, you need life insurance. You also need adequate homeowner’s or renter’s insurance, vehicle insurance, health insurance, and possibly disability insurance (although, depending on how long you’ve been paying into Social Security, you may qualify for disability coverage that way).

9 – If you’re married, is there financial transparency in your relationship? That means both spouses have a good sense as to what’s going on financially in the household, or at least have easy access to all of the financial information.

I realize that answering these questions may be discouraging. That isn’t my intent. Instead, I hope this process helps you identify areas to work on. I’d also like to create a dialogue around this topic. Which questions do you disagree with? What other ones would you add?

Weekly list of curated personal finance articles from around the web.

Does financial success come at a social price? (Life After the Daily Grind). Long article that’s well worth the time.

‘Underwater’ car trade-ins are at a 4-year high: What that means when buying a new vehicle (CNBC). One way to stay in debt forever is to roll an existing loan into a new one. You can do better!

How to build a million-dollar future for your kids (Bloomberg). Ideas for getting your kids off to a profitable start.

Leaving money to those you choose: Here’s what can override your wishes even if you have a will (CNN). When is the last time you checked your beneficiary designations?

Why you don’t want to trade stocks like a member of Congress (Wall Street Journal). Frenetic trading isn’t likely to end well.

Education department opens FAFSA ahead of schedule — it’s a ‘huge win’ for college-bound students, expert says (CNBC). The early bird sometimes gets the financial aid.

All homes need five layers of digital protection (Institute for Family Studies). I also recommend the use of an electronic device contract. You can find our family’s version here.

The hidden motives behind our spending (Christian Stewarship Network, via FaithFi). Reflecting on our financial story, and that of our spouse, can create empathy. And that can open a pathway to better money management.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Waiting can be tough. We seem to be hardwired to resist it. And our culture does us no favors here. Whatever we’re interested in buying, there are ways — and we’re strongly encouraged — to have it now. Paying for it? That can wait until later.

But there are great rewards for those who learn to wait. (Read The Master(’s) Principle.)

And motivation can be found by seeing the big picture. A good starting point is to quantify your financial potential.

Money plus time = a lot!

Consider this: If you’re 32 years old and your salary is $55,000, by the time you’re 70, it’s realistic that you could have earned over $3.8 million! That’s a ton of potential!

Try this exercise yourself by plugging your current age, planned retirement age, current annual income, and assumed annual salary increase (I used a 3% in the example above) into this calculator.

By nature, we don’t tend to think long-term. For many of us, it’s difficult to imagine the future. But it can be very motivating to do so.

Keep yourself gainfully employed, earn a small raise each year, and you’ll generate a lot of income over your lifetime. The question is, what will you do with it? What will you do with your millions?

The eighth wonder of the world

With the big picture in mind, now consider how the seemingly small steps you take today could be magnified over time.

Think about investing, for example. I remember reading a column by one of my favorite financial journalists in which he talked about the day in his youth when someone introduced him to the power of compounding—what Einstein reportedly called “the eighth wonder of the world.”

He had never heard of the concept before, but when he saw compounding in action, it was as if a light bulb switched on above his head. It motivated him to find the money to start investing.

In your first years of investing, compounding may not seem like much of a big deal. But give it some time, and it will turn into a very big deal.

Let’s say you’re 20 years old, start investing $200 per month, do that for 50 years, and generate an average annual return of 7%. After 10 years, you will have invested $24,000. But because of the power of compounding, you will have earned about another $10,000. Nice, but not super impressive. At least not yet.

Now let’s run the example out 50 years. At that point you will have invested $120,000 — a great accomplishment unto itself. But because of the power of compounding, it will have turned into over $1 million. Now, that’s impressive.

But what if you can’t find $200 to invest every month at age 20? Besides, you figure, you’re young; you can afford to wait. Finally, at age 30, you start investing $200 per month, do that for 40 years, and get that same 7% average annual return.

You’ve only invested $24,000 less than if you had started at age 20. However, because you waited 10 years, you end up with about $500,000 less! That’s quite a penalty for waiting.

This same type of thinking can be applied to every aspect of your financial life. 

A lifetime of impact

Let’s go back to the earlier example of a 32-year-old making $55,000. If she did end up making $3.8 million by age 70, and if she cultivated the habit of giving away 10% of her income along the way, she will have given way $380,000. That could have a ton of impact!

Give away a portion of every dollar you earn, and you could play an important role in addressing some of the world’s great needs — sharing Christ, helping to alleviate hunger or poverty, and so much more. So much impact. So much joy.

In the middle of writing this post, I checked my email (yes, while writing about taking the long view, I got impatient and fidgeted away to something else!) and there I saw an update from a missionary my wife and I support. The impact she’s having is amazing. More people are hearing the Gospel, more are coming to faith. And we get to play some small role in that. Incredible.

Saving for something special

My family has had the pleasure of taking several special trips. In most cases, we started dreaming about them far in advance. And we began saving.

By the time the day of departure arrived, the airline tickets had been reserved, the hotel or VRBO was booked, and money for restaurants and other entertainment was in the bank.

Is there a special trip you’d like to take? How much of your kids’ future college costs would you like to cover? What else would you like to accomplish in the future?

Thinking big is the starting point. Let those goals motivate you to add them to your monthly cash flow plan and start chipping away. A little bit of money set aside on a regular basis for a long time can really add up.

It works both ways

Of course, debt can have a compounding effect as well—a negative effect. Let’s say you have a $6,000 balance on a credit card that charges you 18% interest, and you carry that debt from month to month, making just the minimum required payments each month. It could take you more than 17 years to pay it off, and cost you $5,700 in interest!

So turn it into a win by chipping away at the goal of becoming debt-free. If you could put $300 toward your debt every month, you’d be debt-free in just two years. Run some what-if scenarios to see how much faster you could get out of debt. What if you could put an extra $20 toward your debts each month, or an extra $50?

How to make it happen

Making any of this work requires margin, that wonderful cushion between your income and expenses. (Read One of the Sweetest Concepts in All of Money Management.)

It requires not spending too much on a house, not having a car payment, and being proactive and intentional about day-to-day spending. Some people reading this may see it as impossible. But it is possible.

I once had $20,0000 of credit card debt that I thought would never go away. It took time and it took patience. It wasn’t much fun along the way, but today I’m glad that it took four and a half years to pay it all off because it took that much time to change my way of thinking and to cultivate better habits. (Read How I Found Financial Freedom.)

Take the long view. Get a sense of your financial potential and start chipping away at whatever it is that motivates you, whether that’s getting out of debt or going on a special trip. Along the way, pray for patience. In our have-it-today culture, it will take some commitment to live differently.

What if?

Wouldn’t it be a shame to look back on your life and wonder, “What happened to all the money I made?” By the same token, wouldn’t it be satisfying to look back and know you made the most of what was entrusted to you?

Getting a feel for your financial potential can be very motivating. Be sure to take the next step, though, and turn that potential into a plan.

Weekly list of curated personal finance articles from around the web.

Tips on stepping back from screens and starting a new hobby (AP News). Less screen time will be good for our finances and so much more.

The college drop-off is done and the nest is empty. Now what? (Wall Street Journal). It’s a huge transition for the kids, and the parents.

Colleges should stop selling dreams (National Review). Don’t look to a particular school to deliver more than it can.

The key to a winning 401(k) (Morningstar). On the importance of starting early—parents, tell your new college grads.

How to get hired at 89 (or 50) (The Contessa Counts). Wonderful piece about avoiding the trap of self-limiting beliefs.

One of the best things about generosity (This Evergreen Home). Living selflessly is the most satisfying way to live.

Why you should never pay for travel with a debit card (Clark Howard). Is a little savings worth the complete lack of protection?

The great wealth transfer’s begun. Are heirs-to-be ready to receive it? How to prepare (USA TODAY). Leaving someone a lot of money without sufficient training can turn a gift into a burden.

The silent epidemic: why comparison is wrecking our souls (Relevant Magazine). The comparison game can prompt a lot of needless spending and worse. Here’s a very powerful, biblical way to exit the game.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Our home may be our castle, but for many people, their car is an extension of themselves. According to a study cited by Juliet Schor in her book, The Overspent American, nearly half of all car owners see their car as a reflection of who they are.

The belief that we are what we drive, coupled with the auto industry’s heavy use of planned obsolescence—the yearly rollout of new models with “must-have” new features—often leaves us on the vehicle financing treadmill.

We tend to build short-term relationships with our vehicles and long-term relationships with our vehicles’ loan officers.

The latest evidence that this approach isn’t working out too well came via Federal Reserve data earlier this year, which shows that the number of people with an auto loan who are more than 90 days late on their payments is at its highest level since 2010. The average car loan now costs $745 per month and stretches past six years

Even for those who aren’t behind on their payments, having a car loan is a hinderance to a well-functioning financial life, putting a damper on generosity, saving, and financial margin.

A Better Way to Buy Cars

A better approach to buying cars is to build long-term relationships with our vehicles and avoid vehicle loan officers.

I recommend keeping a car for at least 15 years past its model year. The financial freedom that brings is far more beneficial than the short-lived thrill of driving a car with temperature-controlled cup holders. Here are some guidelines for how to break the cycle of financing cars.

1. Buy, don’t lease. Although you may pay less each month for a leased car than you would for a car you buy and finance, you won’t own anything at the end of the lease. You’ll just have to start making payments on another vehicle. In order to have the margin to be generous, save and invest, it helps a lot to have no monthly car payment.

2. If you’re currently making payments on a vehicle loan, keep making those payments even after your vehicle is paid off. Just send them to a savings account instead of your lender. If you can afford the payment today, you can afford it once the loan is paid off.

Then keep that vehicle until it is at least 15 years past its model year. When your vehicle is ready to be replaced you’ll have plenty of money to buy your next one with cash.

3. When it comes time to get another vehicle, it’s usually best to go for a well-maintained used car (but not always). Even vehicles used by dealers for test drives or loaners will be less expensive than a brand-new car. But vehicles that are one to two years old are where you can find low-mileage vehicles at a nice discount.

Still, if you’re paying cash and planning to keep your vehicle for 15 years or more, buying new may make sense.

4. When deciding which car to buy, choose one known for reliability. Consumer Reports lists its picks for the best used vehicles at various price points, starting at under $10,000. (You’ll have to buy a Consumer Reports membership, but you can buy a one-month membership for $10 and then cancel.)

5. Consider all the costs. Some cars are more expensive than others to insure and maintain. When the exhaust system goes out on a dual-exhaust car, for example, it’s going to cost a lot more than it would on a car with a single-exhaust system.

Edmunds.com has a helpful True Cost to Own calculator that enables you to compare vehicles going back to 2019 based on the costs of fuel, insurance, maintenance, replacement parts, and depreciation. Call your insurance agent to get quotes on a few cars you’re considering as a point of comparison to what the Edmunds web site tells you.

There are certainly no moral prohibitions against heated seats or headlight wipers. However, moving through life without a vehicle payment will go a long way toward helping you live with financial freedom. Your car may not be able to parallel park itself, but you’ll get by.

Weekly list of curated personal finance articles from around the web.

5 minimalist choices that push back on consumerism (This Evergreen Home). Great ideas for less spending and more satisfaction.

Why it’s the toughest time to be searching for work in America in years (The Washington Post, via MSN). AI is coming for more and more jobs. See also, Young America faces an economic crisis (Axios).

Sell it, donate it — recycle it? A beloved old minivan faces a fork in the road (NPR). A “SHiFT” in thinking is making good use of old car parts.

Parental dilemma: What to do if you’re supporting children as you near retirement (Barron’s). “Parenting is happening later, longer, more intensively, and more expensively.”

TransUnion data breach: Why it’s more important than ever to freeze your credit (Clark Howard). It’s easy to set up a credit freeze at each of the bureaus, and so beneficial.

How to prepare your teen for financial independence: 5 must-know money concepts (USA TODAY). Another “must-know” is that generosity is an essential part of wise money management.

How to find true wealth (FaithFi). “God created us for more than temporary pleasures and short-lived achievements.”

3 ways decluttering helps you spend less and save more (Becoming Minimalist). Wonderful words of wisdom.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.