Taking the Long Road
Financial writer Bill Bernstein has published a pamphlet on the basics of successful long-term investing entitled If You Can: How Millennials Can Get Rich Slowly. As The New York Times reviewed the booklet on May 3, this column isn't exactly a scoop. Then again, as Bernstein freely admits, the pamphlet guards no secrets. Rather, it dispenses principles that benefit from repetition.
Lesson #1: Save, Save, Save
Even if you can invest like Warren Buffett, if you can't save, you'll die poor.
Bernstein recommends that investors put away "at least" 15% of salary throughout their working lives. That differs sharply from the advice cited in this column last week. When planning for retirement income, last week's authors Gaobo Pang and Sylvester J. Schieber advocate a lifecycle savings approach that smooths consumption over time. Under their model, workers invest minimally at the beginning of their working years while repaying student loans and other debt, moderately during the child-rearing years, and then heavily in the final 10 to 15 years before retirement.