The Inside Scoop on Money
We asked experts in all the fields we cover how they manage their own finances.
It’s only fitting that Benjamin Franklin should be peeking out from our cover this month. Not only does his visage on the $100 bill symbolize the acquisition of wealth, but during his lifetime he offered a wealth of advice on how to acquire it. You might say he was the original personal finance guru. And as a successful self-made man, he was well qualified to share his pearls of wisdom. So he fits in seamlessly with our cover story, which we conceived as an insider’s guide to personal finance. We asked experts in all the fields we cover for the best financial advice they’d give to their mother, their child or to their best friend—and better yet, how they manage their own finances.
Had we been able to put those questions to Franklin himself, we’d have received wise counsel that has stood the test of time:
Dr. Franklin, what is the worst financial mistake you ever made, and what did you learn from it? “Don’t give too much for the whistle” [referring to an incident when, as a boy, he emptied his pockets to buy another boy’s whistle, only to find he had paid four times as much as it was worth]. “The reflection gave me more chagrin than the whistle gave me pleasure.” What’s the best advice you’d give a young person just starting out? “An investment in knowledge always pays the best interest” [an axiom that’s right on target in today’s knowledge-based economy]. How can investors keep their cool when the stock market is going crazy? “Remember that gain may be temporary and uncertain, but ever while you live, expense is constant and certain” [in other words, always keep a cash stash]. As to how he would advise his best friend to manage debt, Franklin could have written a book on that one: “Rather go to bed without dinner than to rise in debt.” “Never keep borrowed money an hour beyond the time you promised.” “Think what you do when you run into debt: You give to another power over your liberty.”
Franklin wasn’t available, but we put those questions and lots more to two dozen of our go-to sources. The answers were often surprising. You’ll learn, for example, whether John Bogle, the father of index funds, invests his own money in actively managed funds (and if so, which ones); how credit expert John Ulzheimer managed to compile a perfect credit score; and how strategist Bill Bengen, creator of the 4% distribution rule for drawing down retirement savings, is managing his own money in retirement.
In fact, we collected so many great answers that we couldn’t fit them all into one issue, and we were inspired to publish them as a recurring feature. In future issues, keep an eye out for travel expert Rick Seaney sharing his secret for getting a good seat on an airplane; financial planner Sheryl Garrett giving advice on how two-income couples can avoid fighting about money; and Fidelity Contrafund manager Will Danoff telling how he would invest for his 81-year-old mother and his school-age kids.
Listen up, America. If anyone fits the definition of insider, it’s Erskine Bowles. As White House chief of staff under President Clinton, Bowles was involved with budget negotiations in the 1990s, when he “spent months locked up in conference rooms with Newt Gingrich to get an agreement.” In 2010, with former Sen. Alan Simpson (R-Wyo.), he chaired the commission that produced the Simpson-Bowles report, a bipartisan prescription for reining in the country’s spiraling long-term debt. With Washington gridlocked, Bowles is on the road taking his message to grass-roots America (see the interview). Franklin would have felt right at home with Bowles’s crusade. As the good doctor said, “He that goes a-borrowing goes a-sorrowing.”