These words from Ben Stein’s latest column at Yahoo! Finance sum up the philosophy of the great Milton Friedman, who died at the age of 94 earlier this month. We are surrounded by information and commentary on the state of the economy and the future of programs such as Social Security and Medicare and whether or not the political party in control will make amends to help solve our problems, but in the end does this really matter?
If you are Milton Friedman the answer is no. A proponent for self-made wealth, Friedman began his life in a very modest fashion with plenty of excuses to not succeed or use the government as a crutch to help him through life. Instead, he took control of his life and by using what he was given he became one of the most successful and influential economists in our history. How did he do it?
The answer is simple: do it for yourself and by yourself, but just do it, and do it now. Take control of your life and don’t plan on relying on an outside entity to help you in the future. Only you can ensure that your financial future is secure, and it starts by taking the initiative to start doing it today. From the column:
Learn decent work habits. Save money, starting when you are young. Save at least 10 percent of your wages each month when you’re in your 20s, and keep on saving until you retire. Invest in mutual funds, index funds, ETFs, foreign developed and foreign emerging markets, and broadly based variable annuities. Find a caring salesperson who can tell you what each investment is for.
If you haven’t started until you are in your 30s or 40s, save at least 20 percent a month. Have some in cash or insured CDs. Don’t expect to do it perfectly — just doing it well enough is fine. If you put all of your money in the Fidelity Total Stock Market Index, that’s fine. It’s not perfect, but it’s good enough.
It is never too late to start and it is certainly never too early. The bottom line is, you need to take care of yourself and you can only do that by starting to save and/or invest. Building wealth doesn’t just happen, it takes some initiative and education. In this column Stein says to find a caring salesperson to tell you what each investment is for, but you can simply take some time to learn how to start and what to invest in yourself as well. If you don’t have the time or desire to learn on your own then utilizing the advice of a trusted professional would be helpful. Don’t let lack of knowledge intimidate you to the point it prevents you from taking action. Remember, anything is better than nothing, and the sooner you start the better.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
Yes, I love Ben Stein's column and like you said, more than likely because he is on the same wavelength as myself. He has a very common sense approach to finance, and common sense can go a long way.
Ben seems to always provide sensible advice... or perhaps I think that mainly because he agrees with me for the most part. Thanks for pointing out the column.