photos courtesy of Gary Morrison

Carl Richards, the New York Times columnist, said:

Rule 1: Decide to invest

Rule 2: Make it automatic

Rule 3: Never forget rules 1 and 2.

Difference Between Saving and Investing

by Steve on July 22, 2014

I read something recently that Pamela Yellen, author of The Bank on Yourself Revolution, wrote that struck a chord with me. She noted that too many people don’t understand the difference between saving and investing. Saving means putting money you can’t afford to lose in a vehicle that is safe and has guaranteed growth. For example, an Internet bank high-yield savings account offers about .85% growth and is FDIC insured. This type of account should be for savings. On the other hand, investing means putting money in a vehicle that has a certain amount of risk. You hope to make a gain, but it’s not guaranteed. Tradeable securities (stocks, mutual funds) are investments.

Yellen’s point is that a person should only invest money that she/he can afford to lose or can let languish with little return for a long time. Savings should be protected from loss and in exchange the person gives up potential for growth.

Surprising Stock Market Surge Continues

July 18, 2014

In the first half of 2014, the U.S. stock market continued its upward trend and has many people wondering “How high can this thing go?” The S&P 500 Index (a representative index for the entire U.S. stock market) increased 6% in the first six months of the year. This is on top of the 32% […]

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Efficient Markets

July 15, 2014

You may hear investment advisers say that investment markets are “efficient.” What does this mean? An efficient market has a large number of buyers and sellers, all the information about a security is known to all the buyers and sellers at the same time and transaction costs are low. For example, the U.S. stock and […]

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Are You Income or Balance Sheet Wealthy?

June 14, 2014

I was re-reading some of the research done by Dr. Thomas J. Staley on millionaires next door and it reminded me of this important distinction. On his blog, Dr. Staley wrote that based on his research: “Most millionaires measure success by net worth, not income. Instead of taking their money home, they plow as much […]

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Mindset Is Key In Pre-Retirement Planning

June 10, 2014

Bobby Jones, perhaps the greatest golfer of all time, said: “Competitive golf is played mainly on a five-and-a-half inch course…the space between your ears.” It’s a remarkable thought that a game that is played over a 7,000 yard course comes down to mindset. And it’s the same when it comes to a successful transition to […]

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Money Mistakes in Retirement Planning (part 2)

June 4, 2014

To continue the list we started last time of the money mistakes too many people make when they start their retirement planning, we present the top six money-related blunders in retirement planning. 6. Ineffective investment approach. It seems that people either take too much or too little risk in the last five years before retirement. […]

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Money Mistakes in Retirement Planning (part 1)

May 27, 2014

We’ve spent the last few blog posts discussing a variety of non-financial issues to consider in retirement planning. Most recently we’ve touched on the big three (I call them the three “W’s”): • Where will you live in retirement? • What will you do in retirement? • Who will you spend time with in retirement? […]

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Who to Spend Time With in Retirement

May 22, 2014

We often hear from recently retired people that the social side of retirement may be the hardest part. After all, the automatic social network that you have when you work is lost when you retire. Again, using the work of Nelson and Bolles in What Color is Your Parachute for Retirement, to be happy in […]

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Where Will You Live in Retirement (part 2)?

May 20, 2014

According to, these are the best state in which to retire and their comments. 10. Texas (tie) — warm weather and solid economy 10. California (tie) — good weather and high life expectancy 9. South Dakota — low crime rate and high life expectancy 7. New Mexico (tie) — good weather 7. Florida (tie) […]

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