Thursday, December 24, 2009, 1:16PM ET - U.S. Markets closed early today.

Ben Stein How Not to Ruin Your Life

Ben Stein, How Not to Ruin Your Life

A Few Lessons from the Road

by Ben Stein

Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story
Excellent (673 Ratings)
4.011886/5
Posted on Friday, May 11, 2007, 12:00AM

As I write this, I'm in the lovely Fox River Valley of Wisconsin. To be specific, I'm in Appleton, home of a beautiful school called Lawrence University.

The campus is leafy and green. The students look happy, young, and healthy. A magnificent breeze is blowing across College Ave., where the charming old hotel I'm staying in sits. In a world of mass killings, rapid climate change, and nuclear proliferation, this town is an oasis of happiness, sweetness, and light.

Lessons in Flexibility

But still I have to preach to you about prudence and good sense. Two days ago I was in Detroit, a city that remains proud and muscular, but which is bleeding economically. High-wage autoworkers and their families, and the businesses that supply the automotive industry and serve the autoworkers' families, are suffering terribly.

They never thought it would happen, but it did.

What's the lesson here? Learn skills that can't be defeated by foreign competition. The doctors in Detroit still make money. The finance people who manage the doctors' offices still make money. And the people there who have substantial savings invested all over the world are doing fine, too.

More brutal than that lesson is that capitalism requires flexibility. Autoworkers who were being paid $50 an hour are getting laid off, it's true. But in Indian Wells and Palm Desert, Calif., men and women who can lay tile or install plantation shutters or plumb toilets are getting $50 an hour and can't keep up with demand.

The realistic workers and their families sometimes have to consider moving to where the good jobs are. Possessing irreplaceable human capital and true flexibility and mobility are the orders of the day.

An Investment to Grow Old With

From Detroit I went to Palm Beach, Fla., a lush spot. On the way back, at the West Palm Beach airport, there were eight women in wheelchairs who boarded our plane early. Every single man on the plane that I could see had gray hair. There are potent lessons here, too.

The nation is getting old. This means there's a crying need for medical products for the aged. I almost never recommend individual stocks, but this time I will -- try Johnson & Johnson (JNJ). It's a mighty wonder-machine of medicines and products for health and convenience, especially for the elderly, who consume a hugely disproportionate share of health-related goods and services.

Yes, Johnson & Johnson has been plagued lately by problems with its drug-coated coronary stents. But for the very long run, it's a beautiful investment.

Save Yourself

Next, not only is the nation growing old, but as individuals we're all growing older, too. And we all want to be the kind of old folks who have homes in the sun for the winter months, even if we happen to be in wheelchairs by then. That means we have to save.

Right now, the market is very high. But it'll get even higher over the next 30 years, unless there's a catastrophic war or a dollar crisis. And even if there is a crisis in which the value of the dollar collapses, your foreign stocks will hold up and may even save your life.

Don't let avoiding saving be an option. Hook yourself up with a money wizard (like Raymond J. Lucia or my pal Phil DeMuth, for instance). Or just set up an account with Vanguard or Fidelity that automatically deposits 15 percent of your income after taxes into a few large index funds and ETFs.

The Rundown

As I've written before, I like these investments:

• The iShares Emerging Markets index (EEM), which might be 15 percent of your investments.

• The iShares EAFE index (EFA) for developed countries, which might be 25 percent.

• The Vanguard Total Stock Market Index (VTSMX) for domestic (Fidelity has an almost identical fund, the FSTMX), which might be 45 percent of your total.

• And maybe 10 percent in the iShares Cohen & Steers Realty Majors fund (ICF) for REITs and 5 percent in the shares of some super individual stocks, like JNJ.

Get in the Swim

Don't let your irresponsibility gene get you out of this. You have to save. You don't want to wind up old, sick, and destitute, so you have to do it -- and right now, before you're in that wheelchair.

You may even want to start your kids out right by buying them a variable annuity when they get out of high school. It'll compound tax-free until they retire, and leave them well off.

While you're at it, take a few thousand and buy one for yourself, adding a few hundred dollars every month. (Watch out for fees, though.)

Exercise Your Options

And one more thing: While you can walk and run, get some exercise. Try to stay out of that wheelchair forever. Good health is a use-it-or-lose-it proposition. If you're physically fit, every other part of your life is easier.

Plus, exercise is fun. Well, sometimes it's fun. Start yours by calling Ray or Phil or Vanguard or Fidelity. Then hit the swimming pool. Hard.

Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story

Rate This story

Excellent (673 Ratings)
4/5
Sign-in to rate!

102 Comments

Showing comments 6-35 of 102<< PreviousNext >>
Sort: first to last

  • emerson boozer guy - Sunday, May 20, 2007, 7:26PM ET  Report Abuse

    • Overall: 5/5

    Ben is right on target. Especially his reference to the trades and places where they are in demand. Just showing up is a big deal in Palm Desert. Then if you are good at what you do people will be so pleased they'll give you a bonus

  • r - Sunday, May 20, 2007, 10:23AM ET  Report Abuse

    • Overall: 2/5

    I can never get over the fact that what passes for a retirement strategy in this country (work hard, save, etc) is based entirely on the twin foundations of sunny-day scenarios and wishful thinking (stay healthy, keep working, invest in the stock market that always goes up 8% a year, etc). This isn't planning, its prayer.

  • Yahoo! Finance User - Sunday, May 20, 2007, 10:00AM ET  Report Abuse

    • Overall: 5/5

    I sent your article to my son in college so he considers the major is chooses.

  • william S - Sunday, May 20, 2007, 9:39AM ET  Report Abuse

    • Overall: 5/5

    I do think that should be a better way to invest your money since savings rates are so low. that the only way to make money is to invest your money.

  • J. - Saturday, May 19, 2007, 9:32PM ET  Report Abuse

    • Overall: 4/5

    Really enjoy reading Ben Stein. Actually look for them.

  • fred j - Saturday, May 19, 2007, 2:19PM ET  Report Abuse

    • Overall: 5/5

    Very good. You repeat a lot from previous columns, but it is stuff that needs repeated.

  • Yahoo! Finance User - Saturday, May 19, 2007, 1:23PM ET  Report Abuse

    • Overall: 4/5

    good as always

  • mario rodriguez - Saturday, May 19, 2007, 12:32PM ET  Report Abuse

    • Overall: 4/5

    Very sound !!

  • Hoot - Saturday, May 19, 2007, 10:54AM ET  Report Abuse

    • Overall: 4/5

    Nice piece by BS again. I've always enjoyed his common sense approach to saving and investing. In the book "The Millionaire Next Door" Dr. Stanley gives us the same quality advice as Ben. All the millionaires have many things in common, consistant saving, conservative investments and lack of greed.Keep up the good work Ben. ConservativeAdvisor

  • Yahoo! Finance User - Saturday, May 19, 2007, 1:47AM ET  Report Abuse

    • Overall: 4/5

    realistic and very true!!

  • Brad - Friday, May 18, 2007, 1:54AM ET  Report Abuse

    • Overall: 5/5

    Great Advice Ben, And thanks for the autograph. I was the first guy to ask you when you arrived here in Detroit. With your schedule I was suprised when you even took the time to shake my hand, A fan for years and more to come, Next time maybe try our Limo Service, We'll be waiting ;)

  • RJF - Wednesday, May 16, 2007, 9:12PM ET  Report Abuse

    • Overall: 5/5

    All of the points covered in this article are so true but there are so many people who just will not listen to reason. I found a great website for people with money troubles and it has even helped me with a few issues in my most recent past. It is http://www.My411Financial.com After applying some of the principles learned I am in a much better financial position.

  • Southwest USA - Wednesday, May 16, 2007, 8:22PM ET  Report Abuse

    • Overall: 5/5

    This is great advice: "Then hit the swimming pool. Hard". Thanks, Ben!

  • Andrew - Wednesday, May 16, 2007, 6:22PM ET  Report Abuse

    • Overall: 2/5

    nothing new here

  • Yahoo! Finance User - Wednesday, May 16, 2007, 5:37PM ET  Report Abuse

    • Overall: 5/5

    To all you who belittle Ben, it just shows your ignorance, to all of the foolish factory workers who no longer have jobs, you were stealing from the boss for many years, you just finally got what you deserved. Been there and done it all.

  • Yahoo! Finance User - Wednesday, May 16, 2007, 5:20PM ET  Report Abuse

    • Overall: 4/5

    I dig Ben, he's an adult and dispenses reliable and sound adult advice. Some people need to hear it over and over, but no, the ones that need it most they don't want to hear it, they demand a get rich quick with no effort scheme, geez. If you have seen him on Cavuto on Fox you know he is becoming more and more annoyed at the moron commentators and the stupid and irrelevant questions that are constantly posed like 'is the tornado in KS going to kill the bull market etc'. Ben, I feel your pain, I have given up on Fox for business news and you probably should too. You are the only one on there with any sense with the exception of Charles.

  • Maurice - Wednesday, May 16, 2007, 5:00PM ET  Report Abuse

    • Overall: 1/5

    yawn....

  • Richard - Wednesday, May 16, 2007, 4:22PM ET  Report Abuse

    • Overall: 2/5

    Same ole same ole

  • Yahoo! Finance User - Wednesday, May 16, 2007, 4:21PM ET  Report Abuse

    • Overall: 5/5

    I'm a Certified Financial Planner®, and I think that this is excellent advice. Yes, it's basic, but it continues to surprise me how many people get the basics wrong, and the length of the column means that there's only room for the basics. Excellent job, Mr. Stein!

  • Samuel Abraham - Wednesday, May 16, 2007, 3:53PM ET  Report Abuse

    • Overall: 4/5

    Pretty good advice from someone who's initials are BS. A good point Ben Stein made here is the fact that Baby Boomers are now an emerging market. Bueller!

  • ZimbabweM - Wednesday, May 16, 2007, 3:52PM ET  Report Abuse

    • Overall: 1/5

    More of the usual boilerplate sludge that has little relevance for those trying to pay bills and the mortgage, run a business on the side, keep skills current, and have a cushion of savings. My Mom gives better advice than this overpaid turd. Yahoo, we deserve better than this. Cut the celebrity junior high essay contests and give us some reasoned, thoughtful and entertaining analysis by people who still have a brain cell of intuition and critical thought. Between this guy and that huckster Kiyosaki, we've got an absolutely ponderous lack of wit and insight. Blah.

  • Stephen - Wednesday, May 16, 2007, 2:34PM ET  Report Abuse

    • Overall: 1/5

    Beyond weak, way beyond!

  • John-Albert Absalon - Wednesday, May 16, 2007, 12:26PM ET  Report Abuse

    • Overall: 2/5

    very basic information for a very bad return just better than a bank account. advise like this wont get you rich till your too old to enjoy it. People like RK tell you what it is that brings great riches in a resonable time frame.

  • steve - Wednesday, May 16, 2007, 11:56AM ET  Report Abuse

    • Overall: 5/5

    I would vote for you, if you ran for president. regards, taco

  • PETERM - Wednesday, May 16, 2007, 11:32AM ET  Report Abuse

    • Overall: 4/5

    Great advice. Notice how simplicity has the most elegance. The only thing I would disagree with is the use of ETF's. An index mutual fund, preferably an all-market index fund, is the best way to save long-term. Indeed, it was designed just for that: to save long term. Skip the ETF fad and buy into index funds instead. Otherwise, he's right on the money: save, save, save, and exercise, exercise, exercise - your body & your mind.

  • Yahoo! Finance User - Wednesday, May 16, 2007, 11:14AM ET  Report Abuse

    • Overall: 5/5

    Excellent take on our situation-and my portfolio seems to be on track with your recommendations.Enjoy your wit, humor and good sense.

  • KeithG - Wednesday, May 16, 2007, 11:11AM ET  Report Abuse

    • Overall: 5/5

    Save save save!

  • Alan - Wednesday, May 16, 2007, 10:05AM ET  Report Abuse

    • Overall: 4/5

    Re: personal finance - too many americans have lost the notion of living within their means, and saving for "tomorrow" They forget that the PURPOSE of all advertising is to separate YOU from YOUR money. Right now, get a $1 bill out of your wallet and look at it. You can ONLY spend THAT dollar once. Today or in retirement. You will never have THAT one again. If you buy the $3,000 sooper dooper TV, instead of the $500 unit, you FOREVER gave up $2,500. Period. Spend NOW or LATER. ALL personal finance can be boiled down to a simple formula... and there is NO magic.... Income - outflow = wealth. No magic. if you want more net worth / wealth, either increase the income or reduce the outflow. Or both! :) No magic. Just a life choice.

  • sportsfan - Wednesday, May 16, 2007, 10:00AM ET  Report Abuse

    • Overall: 5/5

    Great article. Mr. Stein gives so much advice in so many areas of economics and life. Sounds like "same ol same ol", yet nobody listens! Ben Stein might be the most versatile talent in America, the only mark on his record being the time he exclaimed "BUELLER" one too many times.

  • kathryn - Wednesday, May 16, 2007, 8:56AM ET  Report Abuse

    • Overall: 5/5

    As I write this, I am 2 blocks off of College Ave. in Appleton, WI. in a home that I bought a year and a half ago. I retired over 6 years ago, and kept trying to improve upon Appleton by moving. But I'm back because I realized that the good life is here. How could I retire at age 51? I have had a variable annunity for over 33 years, and have followed most of your advice...Now all I have to do is move some extra money into an international fund, and keep walking through the park that's on the corner. So glad you liked it here! All the Best, Kathryn

Showing comments 6-35 of 102<< PreviousNext >>
The columns, articles, message board posts and any other features provided on Yahoo! Finance are provided for personal finance and investment information and are not to be construed as investment advice. Under no circumstances does the information in this content represent a recommendation to buy, sell or hold any security. The views and opinions expressed in an article or column are the author's own and not necessarily those of Yahoo! and there is no implied endorsement by Yahoo! of any advice or trading strategy.

More From Ben Stein

The Baby-Boom Retirement Crisis And How to Beat It

Let Ben Stein show you how! Stein outlines the steps you can take today to assure your future tomorrow.

Don't leave middle age without it!
Only $16.77 plus S&H

More from Yahoo! Sources

  • CNN Money
  • Consumer Reports
  • Kiplinger
  • The Motley Fool
  • Business Week
  • Wall Street Journal

Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data and daily updates provided by Morningstar, Inc. Fundamental company data provided by Capital IQ. Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.

Yahoo! Answers is provided for informational purposes only, and no Q&A is intended for trading or investing purposes. Yahoo! shall not be responsible or liable for the accuracy, usefulness or availability of any Q&A information, and shall not be responsible or liable for any trading or investment decisions based on such information. View Complete Answers Disclaimer.