If You Can: How Millennials Can Get Rich Slowly

by William J. Bernstein

Start by saving 15 percent of your salary at age 25 into a 401(k) plan, an IRA, or a taxable account (or all three). Put equal amounts of that 15 percent into just three different mutual funds:

A U.S. total stock market index fund An international total stock market index fund A U.S. total bond market index fund. Over time, the three funds will grow at different rates, so once per year you’ll adjust their amounts so that they’re again equal. (That’s the fifteen minutes per year, assuming you’ve enrolled in an automatic savings plan.)

People get fat because they like pizza more than fresh fruit and vegetables and would rather watch Monday night football than go to the gym or jog a few miles. Dieting and investing are both simple, but neither is easy. (And

People spend too much money. They decide that they need the newest iPhone, the most fashionable clothes, the fanciest car, or a Cancun vacation.

there’s nothing more reassuring than being able to say to yourself, “I’ve seen this movie before (or at least I’ve read the script), and I know how it ends.”

When, and only when, you’ve gotten rid of all your debt are you truly saving for retirement.

Millionaire dissects the corrosive effects of our consumer-oriented society on both personal and societal well being.) My father was a modestly successful attorney who, because he began his career a few years before the onset of the Depression, became a compulsive saver. Consequently,

From the investors’ perspective, an ownership stake (a stock) is much riskier than a loan to your business (a bond), and so the stock deserves a higher expected return than a bond.

which is now the world’s largest mutual fund company. Four decades ago, he made a fateful decision, which was to give ownership in the company to the shareholders of the mutual funds. That is to say, when you own a Vanguard mutual fund, you are the owner of the company that offers it. Because Vanguard’s shareholders own it, the company has no incentive to gouge them with excessive fees and hidden expenses.

There is no greater cause of mischief to the small investor than the confusion between the health of the economy and stock returns. It’s natural for people to assume that when the economy is in good shape, future stock returns will be high, and vice versa.

is a truism in the market that the best fishing is done in the most stormy waters.

Simple: Driving the price of any asset higher requires the entry of new buyers, and when everyone is invested in stocks, real estate, or gold, there’s no one left to join the party; the entry of naïve, inexperienced investors usually signals the end. Market bottoms behave the same way; when everyone is afraid of stocks, then there’s no one left to sell, so prices are much more likely to move up than down.

As you may already have guessed, the person most liable to screw up your retirement portfolio is you.

His or her simulations almost never contain 4 or more straight heads or tails, which almost always occur within 30 random coin tosses. The point here is that runs of 4 or more heads or tails are perceived as a nonrandom pattern, when in fact they are in fact the rule in random sequences, not the exception. Stock