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Ben Stein How Not to Ruin Your Life

Ben Stein, How Not to Ruin Your Life

Time Flies When You're Unprepared

by Ben Stein

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Very Good (525 Ratings)
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Posted on Thursday, June 7, 2007, 12:00AM

When I first moved to Los Angeles 31 years ago, I had a number of rich friends. They were good to me. They took me to dinners at elegant bistros, threw parties for me in their Beverly Hills homes, and gave me lavish gifts for my birthday. They were fine people.

Today, some of them are still rich. They still have lavish homes in Beverly Hills, they usually also have homes in Malibu or out in the desert or both, and they travel the world and have servants.

Many of them, however, are broke or nearly broke. They're not happy. They worry constantly. They live smaller, more cramped lives.

Time Is Neutral

The interesting thing is that the ones with less money are, in every case, just as smart as the still-rich group. The big difference is that the still-rich group had a sensible, disciplined plan to stay rich.

As my old pal from Yale Law School who's now an iconic professor at Harvard would say, "They saved." They weren't super-geniuses. They just realized that such things don't take care of themselves, so they saved in a sensible way.

That may seem like the essence of triviality, but it isn't. Let me give you an analogy: Four decades ago, Martin Luther King Jr. was speaking about how to secure civil rights for African Americans. He said that one of the main stumbling blocks he faced was well-meaning people who said that time alone would heal problems. To the contrary, insisted Dr. King, "Time is neutral," and cures nothing.

A Plan of Action

The same is true of retirement planning. Time, by itself, will solve nothing. You have to have a plan to operate successfully in the time you have between now and retirement.

You have to put aside enough money so that you'll have an adequate income when you retire, counting pensions, Social Security, annuities, variable annuities, stocks, bonds, real estate, and whatever else you have. A retirement calculator can help you figure out how to reach your goal.

Remember, time is neutral and cures nothing, but making wise use of your time gets you exactly where you want to go. You also have to know that there will be serious inflation between the time you retire and the day you die.

There could be a dollar crisis, too, which I've warned about for years. If this happens, inflation won't just creep up, it'll zoom up. So you need investments in foreign-denominated mutual funds and ETFs. You need stock funds that pay a good dividend and also have the potential to rise in value. And you should look into variable annuities that have guaranteed payment increases even with inflation.

Above all, you must have a plan. You have to find a great investment advisor and go with his or her advice. Time cures nothing, but planning and action do.

An M&A Mania

Now for a shift in gears. As anyone who reads the news knows, there's been a mania of mergers and acquisitions lately. Many of these have been by well-funded private equity companies buying public companies, and usually, there's a major move upward in price in the acquired company.

It would be long-winded of me and more than you need to know to explain why these deals happen. Suffice it to say that they happen and, as the saying goes, "Money is made in the dark."

Once you own a company, you can do a lot of tricks with the books to make even more money from it. There's no older trick than to make a company look good and then sell it.

Calculate the Risk

So how can you profit from the mergers-and-acquisitions fever? You could always buy stock from a company that's being mentioned as a possible buyout victim. You'll usually do fine that way.

You could also buy stock from a company that's being mentioned as a buyout victim with a deal already on the table. You'll almost always make money this way, because the deal is inevitably sweetened. But whatever you do, please buy in small amounts. The deals sometimes fall through, and it hurts when they do.

In fact, I don't recommend this approach except for professionals and people with money to burn. Instead, I suggest that you just stick with the indexes. They'll move as the stocks in them move, and that's good enough. You can be a risk arb -- an M&A speculator -- if you want to, and maybe you should for a tiny fraction of your grubstake. But please don't risk a lot on this maneuver. As I say, deals have been known to fall through.

Let Them Eat Sushi

Finally, I get a number of emails from people traveling to my home city of Los Angeles. They want to know where to eat on a budget. I have a simple recommendation: my absolute favorite Japanese place, Whatasushi, at 260 North Beverly Drive in Beverly Hills. It's inexpensive, cheerful, clean, and has great sushi and tempura.

I know this is a trivial matter compared with retirement investing and mergers and acquisitions, but since so many people asked, that's my recommendation. I don't get any money for it, or any free tuna rolls for that matter -- I just love their food.

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108 Comments

Showing comments 6-35 of 108<< PreviousNext >>
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  • Jeff - Monday, June 18, 2007, 11:24AM ET  Report Abuse

    • Overall: 4/5

    Another good article Ben... but you really need to get back to advising the government on economic policy. This country is in analysis paralysis on everything from healthcare and social security to illegal immigration. We need to get some people involved in government who actually care about the economy and don't just give it lip service. Go to Washington and give them a kick in the ass!

  • Brian k - Sunday, June 17, 2007, 5:13AM ET  Report Abuse

    • Overall: 1/5

    Ben Stein once again shows his lack of of wisdom towards the average blue collar worker !

  • Chris - Saturday, June 16, 2007, 10:53PM ET  Report Abuse

    • Overall: 4/5

    Ben, thanks for another good article. i think you're the only yahoo "expert" who makes any sense at all. most of the others are actually a joke in my opinion. unfortunately, most people in America want to believe fairy tales about how easy it is to get rich while doing what you love and having a great family life and enjoying yourself and not saving money. i fear this "free lunch" mentality is destroying this country, and unfortunately it comes straight from the top (e.g. our mentally challenged president and other high ranking government leaders). that is not a political statement. i think it's just a reflection of how out of touch with reality most Americans, even out alleged leaders, have become. i don't know what it will take to shock people back into the real world. if 9/11 and Katrina didn't do it, i don't know what will. any ideas?

  • linda - Saturday, June 16, 2007, 1:52PM ET  Report Abuse

    • Overall: 5/5

    commen sense rules so does Ben.

  • Yahoo! Finance User - Saturday, June 16, 2007, 12:32PM ET  Report Abuse

    • Overall: 5/5

    Save your money... Protect it from inflation... At last some sensible advice from Yahoo Finance. Thanks Ben for keeping it real around here!

  • Stephen M - Saturday, June 16, 2007, 11:23AM ET  Report Abuse

    • Overall: 1/5

    Once again, Ben is trying to get us to buy annuities -- just about the worst place on earth to put your money. Forbes magazine in a recent article says annuities are bad investments for 9.5 of 10 people. I'd make it 10 of 10.

  • Kirk - Thursday, June 14, 2007, 2:58AM ET  Report Abuse

    • Overall: 4/5

    A dollar crisis would definitely hurt the poor, but our country is so rich, the people at the top would finds ways around any crisis time can throw. Saving 10% of income in a compounded account (IRA) isn't a bad idea?

  • Peter - Wednesday, June 13, 2007, 10:12PM ET  Report Abuse

    • Overall: 4/5

    Ben's message can be stated over and over and over and over again. Boring is good. Sometimes that's needed to get inside more than a few knuckleheads!

  • tekmonster - Wednesday, June 13, 2007, 7:26PM ET  Report Abuse

    • Overall: 1/5

    I used to like reading Ben's articles, but they keep getting more and more boring as time goes on. His sermon is starting to sound more and more like he could appropriately speak it in his trademark "Ferris Bueller" teacher monotone.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 7:20PM ET  Report Abuse

    • Overall: 5/5

    "They saved" is, by itself, worthy of a five star rating. Live below your means and invest the difference every month, preferably in a low cost way that protects against inflation over time (ie. equity index funds). It has given me tremedous financial freedom and was no more complicated than saving & investing. Whatever you do, do not listen to that other columnist Kiyosaki. I have a long track record in investing and know a fraud when I see one.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 6:15PM ET  Report Abuse

    • Overall: 1/5

    How many times can Ben Stein write the same article. We get it...some of your friends are rich, some used to be but failed to save. Next lesson please.

  • Weasel - Wednesday, June 13, 2007, 5:52PM ET  Report Abuse

    • Overall: 5/5

    Good article, but I sometimes worry that those of us who bother to read Ben's articles are the ones who LEAST need them. Those folks who are "too busy" to start retirement planning are probably too busy to read articles that tell them what they keep closing their eyes to, and denying..

  • Steven - Wednesday, June 13, 2007, 3:19PM ET  Report Abuse

    • Overall: 5/5

    Sent it to my son (21), friends' daughter (19) and others noting that they have 60-70 years of spending ahead of them and likely half that time to save. Better get going! As usual timely, succinct and relevant advice from Ben Stein!!!

  • Sara - Wednesday, June 13, 2007, 2:02PM ET  Report Abuse

    • Overall: 5/5

    I love Ben Stein.

  • TedB - Wednesday, June 13, 2007, 1:43PM ET  Report Abuse

    • Overall: 2/5

    In summary, save for retirement, speculating on M&A can be risky, eat at one of Stein's favorite Sushi joints. Lots of words without saying very much.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 1:27PM ET  Report Abuse

    • Overall: 1/5

    Come on Stein! You can do better than this!!! Next time you opt for a sabbatical, do us all a favor and just re-run one of your old articles.

  • JeffreyS - Wednesday, June 13, 2007, 12:54PM ET  Report Abuse

    • Overall: 2/5

    ..."time is neutral".. or in other words, if your retirement plan is win lotto, you're in deep trouble.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 12:29PM ET  Report Abuse

    • Overall: 5/5

    The take-away from this article is "time is neutral". So many of my friends, aquaintances, and co-workers are 45 and still live and spend as if they were 25. They somehow think "my ship will come in someday", and ignore the opportunity of using time in their favor. For the M&A hater below, the short answer is that this is an upward indicator for the overall market; good for anyone holding an index. Invest accordingly.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 12:20PM ET  Report Abuse

    • Overall: 4/5

    Ben, could you please teach our government how to save?

  • Yahoo! Finance User - Wednesday, June 13, 2007, 12:08PM ET  Report Abuse

    • Overall: 1/5

    The original rating on this was 2 stars. Then Ben's fan club apparently started rushing to give this crap 5 stars. Here's Ben's great wisdom (in a column about SAVING not speculating!) "So how can you profit from the mergers-and-acquisitions fever? You could always buy stock from a company that's being mentioned as a possible buyout victim. You'll usually do fine that way."............... Ok people...We have that bit of brilliance, along with "don't overspend." I have come to believe that Yahoo posts this garbage so that it will get lots of flames. And that's exactly what it deserves. What an utter waste of cyberspace this article is!

  • Yahoo! Finance User - Wednesday, June 13, 2007, 11:40AM ET  Report Abuse

    • Overall: 5/5

    Sure, this is nothing new; this information is definitely known. However, many people STILL don't get it. Unfortunately, so many people are so influenced buy their present "needs" that they forget about their future, long-term situation. This article is a good reminder that you do need to save and spent smartly in order to ensure your future means. Time IS neutral for the most part in the way that time itself will not mak you rich or provide monetary security. Sure, in time you can gain a better, more stable job or busines but this too is up to you and your decisions.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 9:45AM ET  Report Abuse

    • Overall: 2/5

    how much is the variable annuity association paying him again? really scary, because when ben wants to be hes dead on.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 9:18AM ET  Report Abuse

    • Overall: 1/5

    Ben, please use your influence with Yahoo and have them pull the plug on that idiot Robert Kawaski!

  • R M - Wednesday, June 13, 2007, 8:48AM ET  Report Abuse

    • Overall: 5/5

    As usual, Ben is the KING! Good advice from top to bottom for the average guy. Right on down to where to eat! Gotta love Ben. He's the man!

  • Nemo - Wednesday, June 13, 2007, 8:12AM ET  Report Abuse

    • Overall: 4/5

    Once again, simple common sense (don't we wish it were so common!) Of course we can't rely on good luck, inheritance or government programs to make our senior years comfortable; we have to do that ourselves. However, as for those who sneer at the government and continue to make the possibly self-fulfilling prophecy of Social Security shutdown, I wish they'd shut their mouths until they consider the consequences: 1. Older workers will have to save everything, including their kids' college funds, for their own retirement. They won't be voting much tax money for education, either. Nor will they have anything to spare for our environment. They won't have reason to care what happens to the environment, or whether a grossly underfunded military will leave the nation open to invasion 50 years hence. Every nickel of their money will have to go to their retirement, so NO money for anything/anybody else. 2. Their soon-to-be illiterate descendants won't be competitive in the world market, they'll be angry and ignorant of how economies function, and they'll end up electing a Hugo Chavez for president. So to those who despise the social contracts between generations, shut up and start saving, do your duty to your elders as we did to ours, and this country will roll right along. Dump your responsibilities and capitalism will die with your grandma.

  • Yahoo! Finance User - Wednesday, June 13, 2007, 5:45AM ET  Report Abuse

    • Overall: 4/5

    Ben once again provides wit and humor with sound advice. After reading the RK confabulation I needed some sound advice! The only thing with Ben that concerns me is his mention of using variable annuities. I have always read the cons of VA, and so I don't know the advantages of buying one, but I know surely the disadvantages. I hope Ben explains the ins and outs, soon. As for RK, educate this moron! But then again, he has suckers buying his books. I can't wait to start my fictional, moronic series, "Rich Mom Poor Mom." I'm sure if I lie enough and confabulate enough I will find people thirsty enough to drink the RK moronic water, and make me a supposed expert on financial advice. In the mean time I will read people in the know. Why can't Yahoo replace RK with the likes of Andrew Tobias or others who really know what they are writing about? Perhaps it's not enough self-promoting to make it worth their writing? Don't get me wrong. With the exception of Robert and Laura, the line-up isn't bad. Suze is the same-ole, same-ole, but she is fine for the newbies who haven't figured out Suze's overly simple mantra of "Live Below Your Means, and don't buy on credit," (That's Suze in a nutshell and she does serve a purpose). What about Rob Black to replace RK? It's time he got a chance outside of Cali. Rob could throw an intersting mix into the financial writing. He would simply have to learn how to be a big fish in a big pond. Give him a chance over RK who has seen his 15 minutes of fame come and long go with his sale of "special tonic." A tonic that is pure nonsense once the smoke and mirrors clear. To Ben: keep up the good work. To Yahoo: ditch the moron RK and shoot higher. Try Rob Black, or another regional pundit with great promise...just get rid of RK and dish out the money for Andrew Tobias, or for a lesser known up and coming, if you can't afford a great financial pundit. As for Ben, give him the well deserved raise.

  • MatthewG - Wednesday, June 13, 2007, 5:35AM ET  Report Abuse

    • Overall: 5/5

    My only complaint is I hate sushi. Got any place else that isn't raw fish?

  • Yahoo! Finance User - Wednesday, June 13, 2007, 4:49AM ET  Report Abuse

    • Overall: 5/5

    Very good!I love it

  • Yahoo! Finance User - Tuesday, June 12, 2007, 11:31PM ET  Report Abuse

    • Overall: 5/5

    Good, basic advice, as usual. And, as Your Daddy says, it's sorely needed in this country. People keep procrastinating, putting off saving until tomorrow, until there are no more tomorrows. Time is indeed neutral if you do nothing to take advantage of it. People need to stop ridiculous spending and start planning for their futures, rather than hoping the government will bail them out. Like all the people who bought more house than they could afford using lousy mortgages, and now expect to be bailed out because they were too greedy and too stupid to read the fine print. If you sign something you don't understand, it's your own fault. I don't want my tax money going to rescue people from their own stupidity. Yeah, some people fell prey to shady lenders, but most were just too greedy about wanting more house than they could really afford. Sorry, that's just a pet peeve of mine. I think people should be responsible for their own financial decisions and messes that they get themselves into because of a lack of due diligence. At any rate, I don't know about you, but I don't want to leave my future in the hands of government people who waste money on building bridges to nowhere or $600 toilet seats. They can't balance the country's budget, so they obviously can't handle finances too well. And people actually expect that the government will support them in their golden years? Hahahahahaha!

  • Yahoo! Finance User - Tuesday, June 12, 2007, 8:17PM ET  Report Abuse

    • Overall: 4/5

    The recommendations are not earth shattering revelations i.e. anticipate inflation and be diversified in investments that are correlated to inflationary trends, save enough for retirement, spend intelligently, etc. but sometimes there is nothing better then stating the obvious. Many times people need the obvious facts drilled into them and this article does just that.

Showing comments 6-35 of 108<< PreviousNext >>
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