Honolulu Star-Advertiser from Honolulu, Hawaii • B7

SPENDING WELL THE NEW YORK TIMES SUNDAY HONOLULU STAR-ADVERTISER B7 Imagine sitting in an auditorium full of all kinds of people. Everyone is there to learn about what to do with his or her money. All of a sudden, the door to the room opens, and in walks the much-anticipated speaker. Who do you think it is? If you said Warren Buffett or the retired Fidelity ace Peter Lynch, wrong. The famous speaker is Numbers.

You know Numbers, right? Numbers is that really smart person who is always right and always rational. And when Numbers speaks, all of your other friends Feelings, Emotions and Intuition must shut up and listen. Those are just the rules. If like me, probably turn to your neighbor and whisper: Who put that joker in charge? Numbers even And yet most of us probably raise our hand and ask for a different speaker. My question is: Why not? When I think about personal finance, I feel that created a world for something we This world made is one for Mr.

or Ms. Rational Human, a world where numbers are king, where everything else is secondary. Even just mentioning or makes me feel that I should be sitting in a drum circle with people reeking of patchouli. That is how strong a stereotype created around these things we all experience. Early work in the field of economics made some assumptions, out of a desire to make things fit in a spreadsheet, about how people act (or react).

The assumption was that the typical person is a rational being who makes informed decisions based on things we can quantify. It was also assumed that people would always act in their own best interests (which is to make more money). But that assumption is wrong. Plenty of research has pointed out this problem. The latest example is a study that Michael Kitces highlighted in a recent blog post.

This study found that readily accessible sources of cash is of unique importance to life satisfaction, above and beyond raw earnings, investments or It makes no sense for you to have cash on hand when you could be investing it instead. At least, if Numbers were in charge, that would be true. But Numbers in charge. Want to know why it makes sense to have cash on hand? Because we feel better when we have cash on hand! It matter if rational. true.

In the end, the point of money is not to make you more money. The point of money is to help make and keep you happy and fulfill the hopes and dreams that align with your own (often irrational and emotional) values. So as long as Numbers helps you with that, let Numbers talk endlessly. But when it starts to get in the way, time to pass the microphone. SKETCH GUY CARL RICHARDS CARL RICHARDS A Hot Stock Is No Sure Bet Forget Emotions In Financial Decisions Control Those Nosy Apps Bad Credit, Costly Home Insurance YOUR MONEY ANN CARRNS TECHNOLOGY BRIAN X.

CHEN How to protect your privacy in a computer world that wants data. Individual stocks can be hazardous to your financial health. You may not want to hear that right now, with the stock market regularly hitting new highs. The Standard 500-stock index has been setting record after record. Counting dividends, it has returned more than 6 percent this year and more than 15 percent in the last 12 months.

more, big bets on hot stocks are generating enormous gains. So far in 2017, for example, two companies in the 500 the biotechnology company Vertex Pharmaceuticals and the video game developer Activision Blizzard have each returned more than 50 percent to their shareholders. No question, if you pick a sizzling stock at just the right time, you can become rich. Some stock pickers have done well over long periods, too. But before you jump into stock picking, you may want to consider the odds.

not just that bull markets like this one eventually come to an end. that over the long run, while the total stock market has prospered, most individual stocks have not. A new study by Hendrik Bes sembinder, a finance professor at Arizona State University, demonstrates that while investing in the overall stock market makes sense, the obstacles facing individual stock pickers are formidable. In a working paper with the title Stocks Outperform Treasury he found that individual stocks resemble lottery tickets: A very small percentage of stocks have done splendidly, but when gains and losses are tallied up over their lifetimes, most stocks earned any money at all. Professor Bessembinder found that a mere 4 percent of the stocks in the entire market headed by Exxon Mobil and followed by Apple, General Electric, Microsoft and IBM accounted for all of the net market returns from 1926 through 2015.

By contrast, the most common single result for an individual stock over that period was a return of nearly negative 100 percent almost a total loss. Professor Bessembinder surveyed virtually every stock listed on the broad American market from July 1926 through December 2015. He compared their returns with those of one-month Treasury bills over periods as short as one month and as long as that entire stretch. Viewed as single units, he found, the typical stock does not outperform Treasury bills. Yet taken as a whole, the overall stock market beats bonds and Treasury bills by very wide margins.

How can those two sets of facts both be correct? A relatively small number of outliers like Exxon or Apple have such great returns that they pull up the average stock, which has a mediocre showing. Put another way, the average return is higher than the median or typical return. This does not imply that stock picking is wrong for those who do it with their eyes wide open. people who pick the right stocks can have lottery-like Professor Bessembinder said. may want to take that risk and do But it does imply that most people picking stocks are unlikely to do well for very long.

Professor Bessembinder said that he, personally, favors low-cost index mutual fund investing, through which he maintains a widely diversified portfolio of bonds and stocks. INVESTING JEFF SOMMER Buying shares in a single company? Might just try a lottery ticket. In the real world, your personal life is a private space. But in the tech world, your personal data is a ripe resource for businesses to harvest in their own interests. That was the broad takeaway from the recent New York Times profile on Uber, the car-summoning service, and its chief executive, Travis Kalanick.

The report said that to stay competitive, Uber bought information about its main American ride-hailing competitor, Lyft, from a free email digest service, Unroll.me. While Unroll.me helped people unsubscribe from marketing emails at no charge, it scanned the contents of its inbox- es and sold anonymized data (in this case, emailed Lyft receipts) to other companies. In addition, Uber participated in a process, fingerprinting, in which iPhones were tagged with permanent identities that were detectable even after the Uber app was erased. The practice violated terms of service. Uber eventually revised the app to remove the fingerprinting code.

For consumers, giving up some data has become part of the trade-off of receiving services. Here are tips on protecting yourself from tricky data collection. Read privacy policies It was never a secret that Un roll.me was sharing anonymized user data with third parties. Its privacy policy, which was publicly posted, says that may collect, use, transfer, sell and disclose nonpersonal information for any and that data can be used build anonymous market research products and That so many people were caught by surprise showed how rarely they bother to read terms of service agreements, said Runa Sandvik, director of information security for The New York Times. To avoid a similar privacy pitfall, start perusing the terms and pay particular attention to the privacy policy.

If you see language that suggests your data could be shared in a way that makes you uncomfortable, opt against using the service. Research business models If you are using a product that does not charge an upfront fee or show any advertising, a for-profit company has to find some way to monetize your patronage. For many, the path to moneti zation is anonymized, aggregated user data. That means that while your name will not be attached to the information, your age, gender, shopping activities and location will all be rolled up with other data. That becomes valuable information to many retailers looking for market research.

The good news: There are some nonprofits that offer tools to protect your privacy, said Lee Tien, a lawyer at the Electronic Frontier Foundation, a digital rights group. For example, his nonprofit provides Privacy Badger, a free ad blocker, in hopes of getting people to become members and donate to the Electronic Frontier Foundation. Free open-source tools like uBlock Origin, another ad blocker, and Signal, an encrypted messaging app, also lack skin in the advertising game. But if a for-profit business offering a free product, count on it monetizing your data somehow. the Mr.

Tien said. not paying for it with money, paying for it with Audit your apps worthwhile to periodically check your primary online accounts, like Facebook or Google, to see which apps are hooked into them. Chances are you have used those accounts to sign up for an app. The ones you never use may still be leeching off your personal data. On Facebook, go to the settings page and click on the Apps tab to see which are connected to the account.

On your Google account page, you can find a list labeled apps Ms. Sandvik recommended pruning apps that you not used in the last six months. Once you have narrowed down the list, take a deeper dive on the ones that remain and read up on how they use your personal data. If their data-sharing practices sound offensive, remove the apps. Opt out for good Deleting your app from your phone or computer often enough.

remove data from the device itself, but not from the servers. Delete your account. The impact of credit history on homeowner insurance rates appears to be intensifying. If you have poor credit, your premium is more than double, on average, the rate for a homeowner with excellent credit, a report from the rate comparison site In suranceQuotes.com finds. Previous analyses also found variations in premiums based on credit history, but the penalty for having subpar credit seems to be widening, said Laura Adams, senior insurance analyst with Insur anceQuotes.

Homeowners with fair, or median, credit pay an average of 36 percent more than those with excellent credit, the analysis found. That is up from 32 percent in 2015 and 29 percent in 2014. The increase for having poor credit, 114 percent, is up from 100 percent in 2015 and 91 percent in 2014. definitely playing more of a Ms. Adams said.

Quadrant Information Services conducted the analysis for Insur anceQuotes.com. It calculated rates in each state, using data from six major insurance companies. The averages are based on premiums quoted to a hypothetical 45-year-old who owns an two-story, single-family home built in 1976. The study analyzed three tiers of credit-based insurance scores: excellent, fair and poor. An insurance score is similar to a credit score, in that it is based on the information in your credit report.

But it is calculated differently, and your score may vary from company to company. The spread between premiums for poor and excellent credit varies by state, since state regulators set rules for insurance and some allow credit history to be weighted more heavily than others do, Ms. Adams said. Three states California, Maryland and Massachusetts bar the use of insurance credit scores in setting premiums. David Snyder, vice president for policy development and research with the Property Casualty Insurers Association of America, said a credit history helped predict the likelihood of filing a claim.

Insurers are allowed to base rates on factors that affect risk, he said, this is simply one of MINH NEW YORK TIMES DAMON NEW YORK TIMES A How can I maintain a good insurance credit score? The steps that help your traditional credit score should also help your insurance credit score, Ms. Adams said. According to FICO, the developer of the most widely used credit scoring model, consumers can maintain good credit by paying bills on time, limiting the number of new loans or credit cards and keeping credit card balances low. Is an insurance score based on a CLUE report? No. A CLUE report short for Comprehensive Loss Underwriting Exchange is also used in setting rates for homeowner policies, but it reflects the claims history of a property, rather than the credit history of the policyholder, said Robert Hunter, insurance director with the Consumer Federation of America.

How can I lower my insurance premium if I have poor credit? Because the formulas used by insurance companies to create scores vary, it makes sense to shop around for quotes, Mr. Hunter said. One company may offer a lower premium than another. You can also take steps to improve your credit, then ask your insurer to review your premium for a possible reduction, sometimes called rerating. You typically can ask for a rerating once every 12 months, according to the property casualty insurers group.

DUBIOUS PRACTICES Uber had to revise its app after it was caught tagging iPhones with permanent identities it could detect after its app was deleted..