“At the ripe old age of 36, netting mid 40’s in income, household assets listing about 10 grand, liquid about 25 grand, only started my IRA last year, I feel like I’m going to be working a long time. I would like some advice on putting my money to work for me. I am on a newly developed saving/investment plan of my own, to save or invest $1000 a month. I do not object to medium to high risk. At this time I have no investment vehicles working for me. Do you have any suggestions on what would be a solid way to add some spark to my plan????? I would like to retire at 45.” -Andrew

It’s great that you’re saving $1,000 a month but a little scary that you have your eye on retirement in nine years. At that time, if you’ve been able to grow your money at 8% after tax and inflation along the way – a very aggressive assumption – you’d have $158,000 to last you the rest of your life, which if you’re an average unmarried nonsmoker who wears his seatbelts will be about another 34 years.

This suggests several things. Ideally, you would find a job that makes you want to work a lot longer. Easier said than done, I know. Or is there a possibility of your marrying an heiress?

As to finding a solid way to add spark to your plan, I’m not sure solid and spark go together – they suggest that you’re looking for a good safe risk. But yes, for long-term investing, stocks have always outperformed more predictable investments. The problem is that everyone seems finally to have adopted that wisdom. Everyone and his shoeshine boy are now in stocks. This has driven stock prices well out of the bargain basement, at least in the U.S., leaving old fogies like me to worry whether this is a good time for young fogies like you to jump in.

But the answer again is yes. If you’re going to stick to your $1,000-a-month discipline through thick and thin, then ANY time is a good time to start investing in the stock market. And to add a solid spark, you might toss into your mix shares of whatever closed-end country funds seem most beaten down but likely to recover. (Just avoid closed-end funds selling at any significant premium to their net asset value.)

But I feel awkward just tossing that out – it seems to me you should get a more solid overview of how all this works, and of how sparks can lead to fires that burn the house down. May I suggest you go to the library or bookstore and grab Burton Malkiel’s A Random Walk Down Wall Street or even my own modestly titled paperback, The Only Investment Guide You’ll Ever Need.


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