An extra hundred bucks earned is very nice. Subtract $15.30 in FICA, if you’re self-employed, and perhaps another $25 in federal income tax, and you have nearly $60 left.

The same hundred bucks from dividends or capital gains is nicer still, as you can earn it even while asleep, and it is less than half as heavily taxed.

Ah, but a hundred bucks in ‘found money’ is the very, very nicest – and not taxed at all. Mark Murphy sends along this observation from Mark Twain’s Autobiography:

I remember the time I found a battered old-time picayune* in the road, when I was a boy, and realized that its value was vastly enhanced to me because I had not earned it. I remember the time, ten years later, in Keokuk, that I found a fifty-dollar bill in the street, and that the value of that bill also was vastly enhanced to me by the reflection that I had not earned it. I remember the time in San Francisco, after a further interval of eight years, when I had been out of work and out of money for three months, that I found a ten-cent piece in the crossing at the junction of Commercial and Montgomery Streets, and realized that that dime gave me more joy, because unearned, than a hundred earned dimes could have given me. In my time I have acquired several hundred thousand dollars, but inasmuch as I earned them they have possessed nothing more than their face value to me and so the details and dates of their capture are dim in my memory and in many cases have passed from my memory altogether. On the contrary, how eternally and blazingly vivid in my recollection are those three unearned finds which I have mentioned!

Perhaps this is why some of us work so hard at finding it. Like the company that just discovered the shipwreck it’s spent 12 years searching for, 100 miles off Savannah, with what may be more than $100 million in gold coins on board.


Heather: ‘My husband recently inherited some investments (primarily common stocks) that are worth about $90,000. We would like to use this money for a down payment on a house in about 3 years and to pay off some debt over the next year. We are not very experienced financially. We are trying to figure out the best way to sell the stocks for cash. We are concerned about selling the stocks all at once because we risk selling when prices are low. We are concerned about selling off the stocks over time for a set amount of money each month (e.g., $1000 worth each month) because it seems like on average we will be selling more stocks when they are priced low and fewer stocks when they are priced high. How do people deal with this issue? We can’t figure out the best approach.’

☞ I would just sell the stock and pay off your debt. Even if stocks were generally cheap here (and with the Dow at 9400, I don’t think they are), the market is a rotten place for money you will need in the next year or two or three. Yes, the shares could certainly go up after you sell; and you will hate me if they do. But they could also go down. How wonderful to be able to pay off debts and to know that you have the down payment for a house when you need it. I’d leave it at that. Sell, pay the debts, and put what’s left someplace really safe, like a bank.

*A ‘picayune’ is defined in Webster’s 1913 Dictionary as ‘a small coin of the value of six and a quarter cents.’ Which reminds us that a quarter used to be called ‘two bits’ (‘shave and a haircut – two bits’). Back then, dollars were divided into eight bits, which may be why stocks until a couple of years ago were quoted in fractions – ‘buy me 100 shares at 21-and-three-eighths or better’ – rather than decimals. So 12.5 cents, an eighth of a dollar, was one bit, and 6.25 cents was half a bit. How picayune is that?


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