And Yet I Did Okay

IF YOU WANT ADVICE on investing, don’t ask me. My investment knowledge is, shall we say, limited.

I don’t pay much attention to expense ratios, individual stocks, international markets, the VIX, interest rates or much else. I know nothing about evaluating stocks or the overall market, though I have learned the hard way that rising interest rates aren’t friendly to utility stocks.

In other words, I’m more like your typical saver who’s playing at investing.

The way I look at it, the most important thing is to keep your net worth growing and you can do that by saving regularly, even if you never earn a penny on those savings. Let’s say you saved 50 cents from your pocket change every day for 40 years. You’d accumulate $7,300, even if you just left the money in a piggy bank. Oh right, inflation.

I invest in municipal bond funds—simply because I like the idea of the tax-free income. So little is actually free these days. Would higher-yielding taxable bonds have been a better deal, given my tax bracket? I failed to determine that. Still, that tax-free income provides a nice inflation hedge.

I’ve saved and invested since I was age 18. I signed up to buy savings bonds through payroll deduction as soon as I started my first job. When I became eligible, I enrolled in my employer’s stock purchase plan, which allowed me to buy shares at a 5% discount. Along the way, I dabbled modestly in a few mutual funds. In 1982, when the company introduced a 401(k), I signed up and didn’t stop until I retired in 2010. In every case, I reinvested all earnings—and still do.

In the last few years of my career, I began receiving stock options and stock awards as part of my compensation. Eventually, I converted them into shares of my employer’s stock, a move I was advised against and which wasn’t common. “Take the cash and run” was the more typical approach. I also have a higher percentage of my investments than advisable in one stock. But today, the dividends from my old employer’s stock are almost equal to my Social Security benefit, once taxes and Medicare premiums are deducted from the latter.

When investing, it seems I don’t do much right. I might write the next version of Investing for Dummies and mean it. To be sure, today, I do use index funds and I don’t trade. That’s a good thing, right? The result of my hodgepodge of investment decisions over the decades can be seen in the accompanying chart.

I’m nearing my 80th birthday. My net worth is beyond what I could have imagined as a mail boy 62 years ago. But I occasionally think to myself, “If you’d made better decisions, sought some expert advice and taken a bit more risk, how much more would you have?”

Then again, does it really matter?

Seems to me financial success boils down to patience, simplicity, perseverance, time and compounding. Even we dummies can do that.