“A fool and his money are soon elected.”
“I don’t make jokes, I just watch the government and report the facts.”
“If pro is the opposite of con, what’s the opposite of Congress?”
If that sounds like the wit and wisdom of Mark Twain to you…well, that would be a good guess, but ultimately incorrect.
We’ll devote some attention to the great Mark Twain another day, but today we focus on one of his contemporaries, the waggish Will Rogers.
The overwhelming majority of Rogers’ barbs were aimed at the politicians of his day, and though he uttered many of those quotes nearly 100 years ago, they’re still remarkably apropos today.
But you could also assemble a well-conceived financial plan just by using some of his quotes as a guide. For instance…
“Even if you’re on the right track, you’ll get run over if you just sit there.”
To a large extent, we strive for a certain level of “autopilot” in all of our retirement plans. Nobody wants to feel the need for constant changes to their plan in order to stay on track.
At the same time, we can’t just put a plan into motion and then leave it alone for 30 years. Tweaks will need to be made along the way. The best example of this is the Constitution. If we were still rolling with the Constitution as it was originally drafted, with no amendments, we’d have quite a different country today. There would be no income tax (that’s fun to dream about), women and black people wouldn’t be voting (undoubtedly a significant boost for Trump in November), and we’d all be required to have soldiers living in our guest rooms.
We would still have the rule that you have to be born a citizen in order to be president. So we wouldn’t have to worry about a Schwarzenegger or Bieber presidency. The founding fathers were quite prescient on that one.
But in the financial context, the lesson is simple: just because you’ve arrived at the correct answer for today doesn’t mean it will still be the correct answer at this time next year.
“The difference between death and taxes is that death doesn’t get worse every time Congress meets.”
I could easily spill a couple of barrels of cyber-ink just talking about taxes (and I will another day), but for now, just suffice it to say this: Taxes are going up in the future. There’s really not a mathematical alternative.
I don’t know how long the benevolent federal government will allow us to continue contributing to Roth IRAs before they decide that it creates too great a tax advantage for us down the road, but if you’ve been ignoring the Roth, you should probably think again, especially if you’re still relatively young.
If you’re under the age of, say, 45, there aren’t many scenarios I can come up with where you should be contributing to a traditional IRA instead of a Roth. Between 45 and 60, it’s much more of a case-by-case analysis. Over 60, you’re often better off to contribute to the traditional instead of the Roth, but not always.
“I’m not as interested in the return on my money as I am the return of my money.”
Or to put it in the words of one of my clients recently, “We’re not that interested in growing our portfolio very much. At this point, our main focus is not losing what we have.”
You need to be careful that you don’t slip into this mindset too early in life when you still have a reasonably long timeline until retirement and several good earning years ahead of you. But at some point, there will come a time when it’s crucial to start focusing more on preservation instead of growth.
“Live in such a way that you would not be ashamed to sell your parrot to the town gossip.”
This has nothing to do with your retirement plan. But still good advice.