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Thursday, January 13, 2011

How to Save 10% of Your Income, Courtesy of Andrew Tobias

Andrew Tobias was the first personal finance writer I ever read. I didn't know there were such things. From that first reading, I learned that buying tuna on sale and storing it in your closet is a form of options trading--only with a guaranteed return. That was the one from of investment I could practice in my graduate student days, since I had to eat anyway.

I once recommended his book on a blog that asked for book recommendations. My suggestion received many scoffing responses--mostly along the lines of "too dated." Well, some is, but most isn't. Plus, he's a good writer.

Near the end of his book, he gives this advice, for if YOU STILL DON'T KNOW WHAT TO DO. He says "Save 10% of your income and invest for long-term growth."

To the HOW? he responds:

If you have a retirement plan at work. just have 10% of your pay automatically shunted into it. If not, set up an automatic monthly transfer from your checking account to your investment account. There is someone in the world making 10% less than you who is not ragged and homeless. Live like him.

There is someone in the world making 10% less than you who is not ragged and homeless. Live like him.


Is that not brilliant?

OMG. His book is updated! Take that, you scoffers!

I love you, Andrew Tobias.

5 comments:

FB @ FabulouslyBroke.com said...

So true!

It's one of the first things I learned too. 10% = long-term wealth

Terri said...

May have to check this one out...

Gayle Ann Berg said...

Thanks for this post. Looking forward to reading this book!

Frugal Scholar said...

@FB--So simple, isn't it. Just have to start young.

@Terri--Honestly, I think the older editions are just fine. Sure you can get it at the library.

@GayleAnn--Hope you like it.

Duchesse said...

Saving 10% to invest is so doable. Combine that with giving 10% of gross income to those who *are* ragged and homeless and you have a good plan.