Author: A.T.

From Nick: “A topic I would like to see discussed is how to apply savings and tax-deferred savings (IRA, 401(k), etc.) at the time of retirement. Assume you plan to retire at 60, expect to live to 90 and intend to leave no money to heirs. If you estimate you will require $100,000 at age 60 and inflation is 4% how much will you need to carry you through your 30 years if your pot of gold earns 7%? How much must you withdraw from tax deferred accounts once you are retired? Assume no Social Security or pensions.”

Well, there are several questions there and I can give only an incomplete answer, but here are a few points to note:

• You’re assuming your money will earn a real rate of 3% (7% growth minus 4% inflation). My trusty calculator tells me that you’d need to set aside just under $2 million at 60 (or any other age) for it to throw off $100,000 a year for 30 years.

• Needless to say, an awful lot depends on your assumptions. Figuring that, under the shelter of retirement plans, you’ll be able to outstrip inflation by 3% is, I think, sensible. You certainly might do better, but there’s no guarantee you’ll do even that well.

• What will you do at 90, when the money’s all gone? To solve this problem, you can either withdraw less than $100,000 each year to make your money stretch further (lowering it to $80,000 stretches the payout from 30 to 45 years; lowering it to $60,000 would make it eternal, based on your assumptions, because you’d be withdrawing just 3% a year) . . . or you can set aside even more than $2 million . . . or you can assume you’ll outstrip inflation by more than 3% . . . or you can buy an annuity from a life insurance company and let it worry about the possibility you’ll live forever.

• The problem with annuities is that insurance companies assume people who buy them will live long lives — you don’t get a lot of terminal patients buying annuities — and so they don’t pay out as much on your $2 million as you might like; i.e., the life insurer isn’t doing this entirely as a favor. People who really do live unusually long make out fine with annuities; those around average make out only so-so; and those who die young are — for this side of a life insurer’s business — the best possible customers. (At 60, you can easily find annuities that pay more than $100,000 a year for life on $2 million — but will it be an inflation-adjusted $100,000? That’s what we’re talking about here: $100,000 a year in 1997 purchasing power.)

• With a Roth IRA, you could withdraw the money over 30 years (or any other number of years) just as you envision. But with a traditional retirement plan, you are required to withdraw certain minimums each year, based on your age when you begin. If I read the table right, you’d be expected at 60 to base your withdrawal amounts on a 24-year payout schedule. (Longer if married, and there are a couple of ways of figuring this — I’m just trying to give you the flavor of it. The personnel department that administers your 401(k), or the financial institution that administers your IRA or Keogh, probably has a pamphlet with the details.)

• The actual dollar amounts would not be a flat $100,000 a year. To keep up with inflation, given your assumption, you’d withdraw $104,000 the second year — even as your $2 million had not shrunk by $100,000 but (earning 7%) had actually grown by $40,000. By the final year, your withdrawal would be about $325,000 — which, if there’d actually been 4% inflation along the way, would be the equivalent of $100,000 when you started 30 years earlier.

• Assuming you have some savings outside a retirement plan, you will want to use it first, letting your tax-sheltered money grow as long as possible. Knowing this, the IRS imposes a stiff penalty on those who under-withdraw the minimums from their retirement plans. (Again: the exception will be the new Roth IRA, starting January 1, 1998, withdrawals from which will have no minimums.)

In 460-odd daily comments, I have yet to write one about music. Anyone who has heard me whistle will know why.

But one family of eleven I know — two parents, nine kids — told me recently how, when Saturday morning came around, Dad would put on his John Philip Sousa recordings, crank up the volume . . . and soon everyone would be marching around, cleaning up the house as if they were invading Normandy. For variation, he’d sometimes put on bagpipe music, which worked equally well.

Anyone who’s taken an aerobics class can tell you the effect music has on mood and energy. Or look what it did to Laurel and Hardy’s wooden soldiers when the boogie-men were about to overrun Toyland!

(If you have somehow failed to see Babes in Toyland, the 1934 classic known also as March of the Wooden Soldiers, in which Santa ordered 600 one-foot soldiers but they accidentally made 100 six-foot soldiers and . . . well, gather the kids round the TV Christmas Eve — it’s almost always on around Christmas — and enjoy.)

Feeling a little overwhelmed by the holidays? Grab yourself a tape of Rocky and come roaring back.

I tell you this now, rather than later in the month, so you have time to acquire the proper music. Removing and putting away the Christmas tree ornaments a drag? Just remember John Philip Sousa, and it will be done in no time.

THE 35% BRACKET

From Jim Maloney: “In writing about the Roth IRA, you discuss the situation of currently being in a 35% tax bracket. You say, ‘In that case, taking the deduction now would save $700 on your taxes today (35% of the $2,000 contribution).’ I think I’m missing something. If you are currently being taxed at the 35% tax rate aren’t you, in all likelihood, making too much to take advantage of the IRA tax deduction?”

Yes, but only if you are covered by a retirement plan at work. If not, there’s no limit on how much you can earn and still take the IRA deduction with a traditional IRA. (It used to be that having either spouse covered by a plan at work disqualified you. But I believe that starting in 1998, spouses’ IRAs have become “delinked.”)

Note also that there is no 35% federal tax bracket as such. The relevant number here is your combined marginal tax rate, including state income tax. I was just using it as an example.

NAMING CHARITIES THE BENEFICIARY OF YOUR IRA

From Bill Jones: “If you plan on leaving money in your will to charity, a far better thing than to give appreciated securities is to give deductible IRAs. The charity avoids ALL taxes, and those gifts do not count for estate taxes. This is the simplest, cheapest, and most efficient estate planning available.”

As I have written before, if you have an IRA and plan to leave money to charity when you die, the best way, as Bill and I agree, is simply to designate the charity or charities as beneficiaries of a percentage of your IRA (or even the whole thing). But what if you want to be charitable before you die — perhaps even this month? That was what I was writing about in listing the reasons to keep your most speculative investments outside an IRA. If one of them hits big, you can use it, instead of cash, to do your giving. (Meanwhile, those that lose big outside an IRA provide a tax loss.)

The one new twist to consider is that with a Roth IRA, since withdrawals are already free of tax, there’s no special advantage to designating a charity the beneficiary; i.e., if charities are the beneficiaries of your IRA, there’s less reason to move from a traditional IRA to a Roth IRA and incur the tax to do so.

There’s still some reason, to be sure: With any luck, you’ll be withdrawing cash from your IRA for many years before the charities get to celebrate your demise. Better to withdraw that cash tax-free from a Roth IRA than taxably from a traditional one. But the case becomes a little less compelling — and, as we’ve discussed, wasn’t in all situations that compelling to begin with. (For help deciding whether it makes sense for you to transfer your IRA to a new Roth IRA, click here.)

So this is a very good time to think about whether you do plan to leave some money to charity . . . and, if so, whether you might not want to do it simply by naming that charity/those charities as beneficiary/ies of the IRA.

NOT SO HARD EARNING 7% OUTSIDE AN IRA — VARIABLE ANNUITIES

His comment on charitable giving was really just an afterthought. Here’s what really got Bill Jones writing in:

You missed a key point in your discussion of a Roth IRA. In your example, you assumed 9% tax-free growth within the IRA but indicated it would “not be easy” to make your $700 tax saving (from the traditional-IRA deduction) grow outside the IRA at 7% after taxes.

It is actually very easy. Consider this: Put the $700 tax rebate in EXACTLY THE SAME 9% investment as the IRA, but within a Vanguard variable annuity. The effect is that you only earn 8.5% (because the annuity charges a 0.5% annual management and expense fee). And you have to pay 15% tax at the end. But that still comes out to $25,370, which is far larger than the $16,000 you thought would “not be easy” to match.

The apparently paradoxical result is that a 9% pre-tax and pre-expense growth rate [over the 46 years in my example] is equivalent to an 8.1% post-tax growth rate in a variable annuity. Odd, isn’t it!

Note that I can actually do much better; as a teacher, I qualify for TIAA’s variable annuity with an 0.2% annual charge.

Bill is right — and I’m not just saying that to curry favor with the teacher (though good teachers should be honored at every opportunity). I’d just add two thoughts.

First, as a general proposition, I’m leery of variable annuities. Those that are most heavily promoted have high sales and expense charges. And all are in effect a mechanism for transforming what would be lightly taxed long-term capital gains (if you invested outside the annuity) into more heavily taxed ordinary income when you withdraw it. Not to mention that you lose flexibility once you take the plunge — it can be hard or expensive to switch managers.

Second, if tax rates at withdrawal turned out to be higher than 15%, as they certainly might — no one can know — then our 24-year-old is hit with a double whammy. The taxes turn out to be steeper than planned on both the traditional IRA withdrawals and from the annuity whose growth was meant to make up for those taxes.

Still, Bill’s math is right and his perspective, valuable. And if one does choose the traditional IRA . . . and does lock up one’s $700 tax-saving from a $2,000 deductible IRA contribution in a variable annuity (as per this example) . . . at least one is likely to avoid the other pitfall I referred to: squandering that $700 someplace along the way.

Doug Posten: “I get no tax deduction now on a regular IRA because my income exceeds the limit. If I cannot deduct the $2,000 now from my taxes, isn’t the Roth IRA better?”

Yes! Absolutely.

The Roth IRA is great for what might be called the lower upper middle class — people who earn too much to qualify for the traditional IRA deduction, but not so much as to be disqualified from contributing to a Roth IRA.

(I say lower upper middle class because in America, almost no one will admit to being upper class. “Upper middle class” is as high as we go — even if we earn half a million a year. So wouldn’t those who earn way above average — $90,000, say — be lower upper middle class?)

As reader Mike Carver put it: “For those of us who can’t make deductible contributions to the traditional IRA, the Roth IRA appears to be a no-brainer.”

Tomorrow: Still More on the Roth IRA

I told the “presumably fanciful” story of the guy who insured his rare cigars, smoked them, then tried to collect on his fire insurance. Robert Doucette was kind enough to point me to the mother of all myth-debunking sites, lest anyone think this might actually be true. I commend this site to you even if you don’t care about this particular story for its links to other amusing, but preposterous folklore.

In the same vein are several books by Jan Harold Brunvand:

• The Vanishing Hitchhiker: American Urban Legends and Their Meanings

• The Mexican Pet: More “New” Urban Legends and Some Old Favorites

• Curses! Broiled Again!

• The Baby Train & Other Lusty Urban Legends

• The Choking Doberman and Other “New” Urban Legends

This is a guy with a flair for titles. How can you not be at least a little curious? So I bought all five.

The baby train has to do with this notion that a certain married students dorm on campus had the highest birth rate on campus because of the train that came through every morning at 5 AM — too early to get up, too late to go back to sleep, so . . . and it all sounds sort of plausible except that Brunvand has apparently encountered this same legend as far off as Australia.

The Doberman was allegedly choking on three human fingers. So the vet, who had sent its mistress home rather than have her watch the required surgery, called her immediately with the warning that she leave the house immediately and call the police. Well, when the cops came they found a semi-fingerless intruder unconscious upstairs in the house. Thanks to the Doberman and the quick-thinking vet, tragedy was averted. And this episode, though no newspaper could ever track down the actual woman and vet involved, is reported in numerous different newspapers in numerous different cities throughout 1981, according to Brunvand.

You get the idea — he has scores and scores of such tales in his collection.

Next thing you know, he’ll be debunking Oliver Stone movies.

Tomorrow: Still More on the Roth IRA

Here’s the lowdown from one of your fellow readers I’ll call Witherspoon:

Financial Facts:

1. I am 43 and my wife 38. Two daughters 8 and 6 years old.

2. My salary — $40,000. Wife just started substitute teaching and coaching part time now that both girls are in school. Likely salary–$6,000. Dividend income from our stocks — $10,000.

3. Value of home: $165,000. Fixed 30-year mortgage at 8.25% on $85,000 with 27 years to go.

4. Credit card paid off monthly. No other debt.

5. Stock portfolio worth $620,000 (48 stocks and 3 mutual funds). The majority of this came from our parents reducing their estates though gifting and an inheritance from a grandmother. Stocks include $160,000 worth of Coca Cola with the rest a menagerie of phones, utilities, and growth stocks.

6. My parents are likely to fund the Virginia Prepaid Tuition Program for our kids college tuitions. They have purchased life insurance which equates to $150,000 in proceeds to us in the future. In addition, my parents net worth is in the $2.3 million range. I have 2 siblings.

7. My wife’s mother is worth slightly less than that and has one other child. She has set up a trust for our children that is worth $150,000.

8. I have been terrible about funding my 401(k) because of trying to live on one salary after we had kids and due to being downsized 3 times. Balance $1,700.

9. I have approx $200,000 life insurance on me and $80,000 on my wife. $1,000,000 umbrella policy also.

Questions:

1. I feel guilty about the 401(k). How important is it that I find a way to fund it?

2. We have an additional $20,000 coming in from the inheritance. Do we use it to pay off part of the mortgage, invest in the market for additional income which would allow us to fund the 401(k) or some other idea that I have not thought of?

3. Any other advice would be appreciated.

Well, free advice is worth what you pay for it, and I suspect some of your fellow readers may come up with far more perceptive suggestions than mine. That said:

1. Feeling guilty about your 401(k), while completely justified, (you should feel terrible!) does you no good at all. Instead, you should stop feeling guilty and fully fund it, since money will grow faster tax-deferred than taxable, and particularly if your employer, like most, kicks in 25 cents or 50 cents — sometimes even more — for every $1 you contribute. Can you imagine the lines outside a bank that offered depositors not a toaster but free money — a free $500 for each $1,000 you deposited? Can you imagine the riots? Everyone in town would be trying to get into that bank and yet you, who have a private door and no riotous crowds to brook, are, in effect, saying, “Nah. Not interested.” For shame, Witherspoon! For shame! [Note to readers with no sense of humor, no small number of whom seem to have joined us in the last couple of months: I’m kidding. Witherspoon knows I mean him no disrespect.]

2. It should be a snap for you to fund it. If nothing else, just sell a little stock each year if you have to. You may want to sell the stock on which you have the most modest capital gain, although if it weren’t for taxes, I’d suggest you’re awfully heavily weighted toward Coke. In fact, what the heck: given the new low capital gains rate, why not sell a little Coke? Given your modest income, made more modest by the mortgage-interest deduction and exemptions for two kids, etc., the tax rate on the gain will be minor.

3. It sounds as if you will also both qualify for Roth IRAs, and I would definitely put $4,000 a year into these as well, funding this, if need be, with sales of stock from your taxable portfolio.

4. Before paying down that $165,000 mortgage, look into refinancing it altogether, or all but this $20,000 of it, with an adjustable rate mortgage (ARM). Shop around — and be sure you fully understand the wrinkles of whatever you’re offered, since ARMs can sometimes be deceptive. But why should you pay someone to take the risk that interest rates will rise? That’s what you’re doing by paying for a 30-year fixed mortgage. Some people have to. They can’t afford the risk of rising rates. But you’ve got $620,000 in stocks to help you in an emergency. If your ARM had decent annual and lifetime caps, and you could be paying 7%, say, after figuring in all the costs, you’d be saving some nice money — something like $2,000 a year, thank you very much. Yes, the rate might rise — but it might fall, also. (From 1880 to 1965, home mortgages were almost never pegged above 6%.)

• Of course, if you know interest rates are headed back up, then this would be dumb — but if you know the direction of interest rates, it should be you, not me, dispensing the advice.

• (It would also be dumb to refinance if you think you might move any time soon, because of the closing costs you incur.)

• One place to start shopping around for a mortgage is www.quicken.com/mortgage. It includes a 15-minute “interview” that actually takes half an hour to run through, but is well worth it.

5. At your ages, more term life insurance should be very cheap, and ordinarily I’d suggest with two young kids you buy more. But with fairly wealthy, loving grandparents, you may not need any at all. I also worry that you’ve bought some kind of overpriced life insurance. Your wife has $80,000? That’s not a very round number. The kind of people who sell $80,000 worth are not necessarily the kind who offer the best values. With annual renewable term insurance, it’s easy to shop around (on the Internet, even), and you may find you could get a lot more coverage for the same money.

6. Forty-eight stocks and three mutual funds? On a total of $620,000? You’re even more ridiculously diversified than I am! Actually, it’s 47 stocks and 3 mutual funds on a total of $460,000 if you subtract the Coke. Talk about a lot of baskets! But I know how this can happen, and having happened, I wouldn’t rush to “clean things up” for the sake of appearance when taxes would be due on any sales.

7. I’m sure you’ve already done this, but be sure your girls have a computer. And given that the holiday season is upon us, don’t you think you should also get each of them a copy of My Vast Fortune?I’m not saying they’re not a little young for it, but c’mon — we just saved $2,000 a year!

Here’s the comment I ran last year:

You can easily have all you want by not wanting much. You can’t possibly have all you want by making more money.

And isn’t “want” the most intriguing word? It means lack (“For want of a nail the shoe is lost, for want of a shoe the horse is lost, for want of a horse the rider is lost” — George Herbert, 1651) and it means wish for — which are so often one and the same.

But we don’t want (wish for) the things we don’t know we want (lack) — hence the importance of advertising and the scary power of “Dallas” reruns in the Third World.

And “want” is only sometimes synonymous with “need.” Sure, for lack of a nail — but how about for lack of a Sea-Doo?

The miraculous thing about this country is that almost everybody has food, clothing, shelter, and extraordinary devices undreamed of until a moment ago in human history: radios, telephones, color televisions, cars, radios in their cars — even enough dough to fly across the country once a year, if they plan ahead and stay over a Saturday. I speak here not just of the great middle class. This list pertains to most (sadly not all) lower-income Americans as well.

I consider myself blessed that, in material terms, I don’t want (lack) anything, and don’t even really want much. (My friends will tell you this is just a lack of taste. They marvel at my satisfaction with mid-priced used cars and mail-order clothes.)

How might you become similarly blessed? Well, maybe you already are. Or maybe you will decide that not having to strive for stuff you don’t need is the greatest luxury of all.

Happy Thanksgiving.

* * *

That’s the comment I ran last year. One of you, Erik Sten, responded with such a charming message, I’ve saved it all this time to share with you. He writes:

I just forwarded your Thanksgiving comment to a friend who has been amazed that I’ve gotten along just fine without having a real job for about ten years. He and others have suggested that I do a book on living within one’s means. My response is that I know how to do it and anyone else can do the same but he or she must want, more accurately, desire, to do it. That I do not have a clue how to teach.

I’m a graduate of Yale Law School and spent many years in public service doing consumer protection work. I was effective enough to get myself fired from two positions because my bosses felt I was too aggressive for their political tastes. My philosophy was there is simply no justification for any degree of deception in the promotion of sales. It’s not fair to either the consumer or the honest competitor.

Shortly after I left my last professional position, I got my kids through college. I was divorced and realized I had nobody to please, satisfy or impress other than myself. I maintain myself through a few modest investments and the odd project, and I am satisfied or I’d be living differently.

I am blessed.

My younger son teaches in an alternative high school and is doing a marvelous job. He’s attended the funerals of several of his students who have died by guns. I couldn’t do it and am amazed anybody can do what he can. I couldn’t be prouder.

My other son was just elected to the Portland City Council. It’s only a five-person council so it’s quite an achievement for a 29-year-old. He won by better than a 3 to 2 margin after running a positive campaign that was noted for the large number of enthusiastic volunteer workers. He is a Generation Xer who will make an impact; you’ll be hearing more about him. I am fearful for the long-term impact of political pressures on his ideals, but I know that if we cannot encourage our best and brightest to be our leaders, then we’re in big trouble.

Hey, isn’t Thanksgiving great to cause us to think about these things?

The only holiday I like more is July 4, when I can read the Declaration of Independence on the back page of the New York Times. (Well, and maybe Christmas. Ho, ho, ho.)

Monday: One Family’s Finances (and How You, Too, Might Save $2,000 a Year)

A lot of you have written to ask what ever happened in the “Mr. B” lawsuit. The answer (sorry this won’t mean anything to those I’ve not yet browbeaten into reading my book — hang on, it gets better) is that he asked to settle for $1,200, we said no, and it drags on. But it looks as if Mr. B may have lost interest, now that he sees we’re resolute. It cost him nothing to try, thanks to Legal Aid; it cost us a few thousand dollars in time and legal fees to defend. You know the old gypsy curse: “May you be involved in a lawsuit in which you are in the right.” (Or something like that. Maybe it was Polonius who actually said it. In Danish.)

The point is: I’ve had it easy compared to this story, relayed to me — with admirable calm (I would be going nuts) — by Dan H., one of your fellow readers:

“I hope your landlord travails are going better. I am currently slogging through a difficult eviction. The tenants started out by suing me more than a year ago for breaking a leg on a carpet seam inside the house. When the medical records showed that they had originally claimed that the accident happened outside of the house, their attorney petitioned the court to be able to resign from the case. Yet the case lives on. Meanwhile, failing their first attempt to sue, they stopped paying rent, so I filed for eviction, which they are contesting on the grounds that it is retaliatory for the original suit (not that it could have anything to do with anything like, say, their failure to pay the rent!!). Alas, sometimes life can be rather frustrating.”

Separately, there’s an alleged news item going around cyberspace that I have to assume is a spoof. It concerns a Charlotte, North Carolina, man who “having purchased a case of rare, very expensive cigars, insured them against . . . get this . . . fire.” He smoked them all, then told the insurer he had lost them in “a series of small fires.” The insurance company balked; the man sued — and won. According to the story, rather than endure the time and expense of an appeal, the insurer paid the man $15,000. Then, after he cashed the check, it “had him arrested on 24 counts of arson, for which he was sentenced to 24 consecutive one-year terms.” While this amusing tale is presumably fanciful, tell me this: Is it that much more insane than Dan H.’s saga?

Ah, justice.

“Can I open an IRA for my 4-year-old and 7-year-old sons?” — Marie

Only if they earn the income you use to do it. Are they TV stars? Chimney sweeps? Even so, not all financial institutions will be willing to do this. But some will set up IRAs for minors — so far as I know, it’s completely legal.

“I’ve read a lot about converting existing IRA’s to Roth IRA’s but my question is whether I can convert PART of my IRA (100K of 320K). I’m 62 years old and don’t want to deal with the taxes on the whole amount.” — William F.

Yes, you can convert as little or as much of it as you want.

“Of all that I have read about the pros and cons of switching to a Roth IRA, no one has dealt fully with the transfer of non-deductible contributions previously made to a traditional IRA. Can these funds be moved to a Roth tax-free? If they can, isn’t it a no-brainer that they should be moved (since that would exempt any further taxes on their growth)?” — Paul Kroger

Excellent question. Several of you raised it. Yes, the nondeductible contributions to your traditional IRA are not taxed when withdrawn. So in that sense, if you qualify to move money from a traditional to a Roth IRA, (as you do if your 1998 adjusted gross income will be below $100,000) this would be a no-brainer. You’d be transferring money whose growth would be taxed at withdrawal to a Roth IRA where it can grow forever free of tax. Great!

But the appeal of moving to a Roth IRA will depend on the proportion of nondeductible contributions in your IRA versus deductible contributions and growth.

• If the bulk of your IRA’s value comes from nondeductible contributions — perhaps you just set it up two years ago, contributed $4,000 and now it’s worth $5,629 — then, yes, it’s a no-brainer. Switch to a Roth IRA if you qualify to do so and pay a little tax on the appreciation. (But note that in doing so — even if you’re over 59-1/2 — you begin the 5-year waiting period before which Roth IRA distributions are not tax-free.)

• But what if you had an IRA worth $89,000 of which only $4,000 represents nondeductible contributions (because, say, your income was too high in a couple of years to make a deductible contribution, but you chose to contribute anyway)? Now you’ve got a $4,000 tail wagging an $85,000 dog. In this extreme example, the fact that a tiny proportion of the IRA transfer to a Roth IRA would not be taxed would barely affect your decision at all. It might make sense to switch to a Roth IRA — or it might not. See my earlier comment — but the nondeductible contributions you made would have very little to do with it.

Clearly, the more any transfer to a Roth IRA would be tax-free, because it represented nondeductible contributions, the more reason there would be to make that transfer.

To see what T. Rowe Price has to say about all this, click here. For Vanguard’s analysis, click here. And for its cool on-line IRA analyzer, click here.

[Note: If you don’t transfer your entire IRA over to a Roth IRA, you have to account for the transfer pro-rata. Say you made five nondeductible $2,000 contributions to your traditional IRA, totaling $10,000 . . . but this $10,000, through adroit management and the marvels of a bull market, is now $22,000. If you transfer the full $22,000 to a Roth IRA, you’d pay tax on $12,000. Easy. But if for some reason you transferred only $10,000 of the $22,000, you couldn’t just say it was the nondeductible part, you’d have to work out the proportion of the blend — in this case, 45% was nondeductible contribution, 55% appreciation — and pay tax accordingly.]

Neither a borrower nor a lender be. Simple enough, no? I was so proud for finally realizing it wasn’t Ben Franklin who had said this, as I had long thought — it was Shakespeare.

And then Ed Vosik responded in this space: “It wasn’t Shakespeare. It was Polonius.”

“And here I had thought it was Ben Franklin,” I replied to Ed. “But wait a minute. Did you HEAR him say it? See a tape? How do you know? Anyway: Shakespeare said it, too. And gets extra points for saying it in English. (Non offensorum, amicus Polonius.)”

Now comes Jim Halperin:

“Actually, Shakespeare WROTE it, in Hamlet, in the form of a soliloquy of advice from Polonius to his son.”

And John:

“Polonius spoke Danish and probably would not have understood your apology written in Latin.”

Oy! I feel stupider with each passing day. (I was shocked, in the midst of the Diana tragedy, to learn that the members of the British royal family are German — and astonished to learn I was the only one in the world who didn’t know.) Danish? With a name like Polonius? I give up. Borrow and lend all you like. What do I know.

Soon: Your Feedback on Roth IRAs, Going Postal, Etc.