“Quite a few years ago I read a book by you in which you recommended Mutual Shares. I was finishing my MBA at the time. I began to invest in it and never stopped. I’m 42 now, earn $60K in salary and have never earned more. I am nearing millionaire net asset status and will most probably achieve it long before age 50 — even with the expected attenuated gains from the market in coming years. Compound interest and understanding taxes can take one a long way. A little good advice helps too. Thanks. Please withhold my name if you choose to use this note in your column.”

Listen: I take no credit for this. Almost none of my advice is original; I got it from people like Aesop and Ben Franklin and Charles Dickens. From Mark Twain and Tolstoy. But at this time of New Year’s resolutions, I think it’s worth pointing out that this stuff — slow but steady common sense stuff — really does work. And needless to say, it’s gratifying to see the results.

Live beneath your means today, make a plan for tomorrow, work hard, and, with any luck, you’ll be a millionaire before too long, also.

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Aesop: “Slow and steady wins the race . . . . A crust eaten in peace is better than a banquet partaken in anxiety . . . . It is thrifty to prepare today for the wants of tomorrow.” Back to Text

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Ben Franklin: “Necessity never made a good bargain . . . . There are three faithful friends — an old dog, an old wife, and ready money.” Back to Text

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Charles Dickens: “Annual income twenty pounds, annual expenditure nineteen six, result: happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result: misery.” Back to Text

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Mark Twain: “October. This is one of the singularly most dangerous months to speculate in stocks. Others are November, December, January, February, March, April, May, June, July, August and September.” Back to Text

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Tolstoy: “Buy term insurance and invest the difference . . . pay all your credit card balances in full within the grace period . . . investing 20% or 25% of your portfolio in non-US stocks can actually reduce the risk of your portfolio slightly while at the same time slightly increasing its expected long-term return.” Did you know Tolstoy was actually a financial planner in the Sevastopol office of Shearson, Lehman, Hutton, American Expressski, as it was known back then? No? OK, well did you know he actually did write these words, in 1892: “The more is given the less the people will work for themselves, and the less they work the more their poverty will increase.” Money advice any parent should recall at allowance-negotiation time with the kids. Back to Text

 

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