They’re at it again. Some of the richest people in the country are making outlandish investment suggestions. One legendary investor said (yet again) that bonds are one of the most dangerous investments you can own, and the head of one of the world’s largest investment management firms opined that investors should put all their money into stocks. We’re amused and bemused when the super-rich offer investment opinions to the masses, particularly ones as dangerous and ridiculous as are often proffered. Let us do some ciphering. If you have 2 billion dollars, but lose half of it in the stock market, you still have a billion dollars left. On the other hand, if you have $200,000 in your 401(k) and lose half of it, you’re in a world of hurt. True, these gentlemen and ladies have made fortunes in the stock market, but their wealth was gained largely with the help of other people’s money – their investors. Most of us have to build up our investments on our own, and blindly adhering to their advice is dangerous and foolish.
Smart Money Tips
- The key to successful investing. Successful investors are more concerned about how their money will fare over the next ten years, not the next ten days or ten months. Perhaps the hardest thing you’ll ever do as an investor is stand firm when you’re losing money week in and week out, as always happens from time to time in the stock market. But this is crucial, because stocks usually rebound very quickly after the market bottoms out, and no one can predict when that will happen.
- Important auto insurance considerations. Automobile insurance protects car owners from the potentially large bills an accident can bring. Automobile insurance also protects the car owner from theft and provides some liability protection. Here are some tips on getting the right coverage without wasting money.
- Buy sufficient coverage in essential areas such as bodily injury and personal liability. Reduce or eliminate coverage in other areas, such as collision and comprehensive, if you own an old clunker.
- Don’t buy cars that cost a lot to insure. They invite the attention of auto and catalytic converter thieves. Really, your image won’t suffer if you own a modest car.
- Don’t waste money on unnecessary car rental insurance. If you’re going to rent a car, find out in advance if your automobile insurance policy will cover it (most do).
- If you’re a careful drive and can afford it, increase the deductible on your auto policy to $1,000 or more.
Food for Thought
A smooth sea never made a skillful mariner.
–English proverb
Money Can Be Funny
There are worse things in life than death. Have you ever spent an evening with an insurance salesman?
–Woody Allen
Word of the Week
scapegrace – noun – a rascal; a person who is constantly getting into trouble.
Origin: 19th Century: from SCAPE + GRACE, alluding to a person who lacks God’s grace
Scapegraces are rarely scapegoats since they are inevitably deserving of reproach.