I know all the arguments: "I need the cash flow", "I must reinvest in the business" , "I have to pay current bills"," " I need the income now ! " " I'm so old that I don't even buy green bananas !" I would counter by saying that I don't know anyone who knows when he/she will retire or can confidently tell me that all of their retirement cost are taken care of. I know very few people who do not wish to leave a financial legacy to their heirs. And I certainly have never met anyone opposed to increasing income !

    Like it or not , medical science is keeping people alive longer. It wasn't too many years ago that we envisioned seventy-five year old people sitting in chairs, rocking out their final years. When I see seventy-five year old people today , they generally have tennis rackets or golf clubs tucked under their arms.

    First , let's talk about demographics. The United States has been accused of being a nation of slackers when it comes to saving money. We under save, compared to the rest of the world.

    Let’s look at this picture from a different angle. In the eighteen years following the end of World War II , millions of babies were born in America. The babies are now turning forty-five years old. Having raised a child, I submit that it's pretty darn difficult to save money before age forty-five. We don't buy sneakers, we buy Reeboks and Nikes. Name-brand-this and name-brand-that begins to add up. So do car payments, mortgage payments, and college tuition. It's usually as late as age forty-five , when we begin to save seriously.

    No other country in the world had a baby boom. Not Japan, not Russia, and not Germany. No wonder other countries have out saved us! They are older than we are. As more Americans hit forty- five years old , you watch the savings rate in America kick in!

    Now let's look at the investment argument. From 1992 to 1997 , the stock market was up 250%. In one or two memorable days, it was down 24% . Since 1940 , we've had twelve bull markets (stocks on a general incline in value) in this country. The average bull market lasted over three years and was up 100%. In the same time frame, we've seen eleven bear markets ( stocks on a general decline in value). The average bear market lasted less than a year and was down 25-30%. When looked at rationally, the stock market is a wonderful place to be. The puzzlement is that more people don't take advantage of it.

    My experience has been that people don't appreciate or understand volatility ( the ups and downs of the market ) and it frightens them as a result. Many investors treat liquidity like their best friend, when in fact, liquidity is both expensive and is disruptive to the best plans.

    In my newsletter I recently pointed out that $1,000 in Treasury Bills forty years ago is today worth $7,200. The same $1000 in the stock market is worth $109,000. Yet when the top thirty-four months of market action are removed from these astounding market results, the $1,000 in the stock market is worth only $6,900, less than Treasury Bills! Anyone who thinks he can pick the 3 1/2 weeks a year when the markets action takes place is deceiving himself.

    The only alternative to market timing is dollar cost Averaging. Dollar Cost Averaging has only two requirements: patience and a fundamental belief in the continued prosperity of the American system. First of all, the greatest single obstacle to financial success in America today is lack of patience. Secondly, anyone who has ever placed his faith in the American system has always been right.

    The well known economist Roger Ibbotson tells us that " If we had invested a dollar in inflation back in 1925, that $1.00 would today (12/31/97) be worth $7.46. In government bonds, today's value would be $17.99. If we had invested in corporate bonds, we'd have $27.18 today (12/31/97). But in the stock market, we'd have $517.50. What we need to be reminded is that only $25.89 of the 4517.50 can be credited to price appreciation. The balance came about only because of dividend growth and dividend reinvestment. This is the best reason for buying and holding equity securities that can be told. The key to investment success is time , not timing.

    Now with a little help from one of the 9000 mutual fund families I would like to give you fifty practical ways to save $50 each month. Saving money doesn’t have to be difficult. In fact, if you take a close look at how you’re spending your monthly income, you’ll be surprised at just how easy it is to cut expenses. After all , the best way to save money is to spend less of what you make. Here ‘s a list of 50 money- saving tips to help get you started…

1. Shop with a list – and stick to it.
2. Just say NO to ATM’s with fees – plan ahead for your cash needs.
3. does your bank charge high fees ? MOVE YOUR ACCOUNT.
4. Pay off that credit card balance !
5. If you must carry a credit card balance, shop around for a card with a lower rate.
6. Look for lower premiums on your insurance policies.
7. consider higher deductibles for your home and auto insurance.
8. do you have private mortgage insurance ? If you’ve built up 20% equity in your home, you can cancel it.
9. Use a mail-order pharmacy for long-term prescriptions.
10. "Doc, can I get that as a generic drug ?"
11. Check all medical and hospital bills for errors – many insurance companies offer rewards.
12. Rent – never buy something you’ll only use a few times.
13. Turn your yard into a department store – have a rummage sale.
14. Switch long-distance carriers – then switch again
15. Call waiting ? Not usually? Cancel those add-on phone services you don’t need.
16. E-mail your friends instead of calling
17. Skip the movies – rent a video instead.
18. Dine out? Eat in
19. Lunch is "in the bag" –or it should be
20. Don’t buy that book ! Exercise your library card ( you need to buy my book though !)
21. Free up space in your mailbox—cancel that magazine subscription you never read. (not this magazine, it’s really good )
22. Watch a parade or have a picnic—free entertainment is often the best.
23. Turn your car into a "chat room." Carpool to work.
24. Join the "bus crowd" and avoid cab fare.
25. Buy airline tickets in advance –and always stay through Saturday. You’ll have more fun and it’s a lot cheaper, too!
26. Quit that health club – join the local gym instead.
27. "COUPONS" & "DOUBLE COUPON DAYS." Enough said
28. What’s in a name ? Buy generic instead.
29. Skip the paper towels – wash your cloth ones instead.
30. Watch out for "convenience" foods – they’re expensive and not as healthy for you anyway.
31. Join a warehouse club.
32. "Scan" those scanners and receipts – mistakes do happen
33. Avoid "pricey" specialty stores
34. Comparison shop "on-line."
35. Gotta trunk? Buy in bulk.
36. Premium gas for your car? Most run fine without it. Check your manual to be sure.
37. Forget the words "automatic car-wash" do it yourself and get some fresh air.
38. Use that quick-change oil and lube service on the corner instead of a full-service garage.
39. Never pay extra for service contracts or extended warranties—the manufacturer’s warranty is usually sufficient.
40. Cancel that premium channel you never watch – or cancel cable TV altogether
41. Don’t touch that thermostat –put on a sweater instead
42. Take a shower instead of a bath.
43. Only run a "full" dishwasher.
44. Have an energy audit done on your home – some companies offer them for FREE
45. Never pay extra for car rental insurance – you’re probably already covered by your credit card or regular car insurance.
46. DON’T PLAY THE LOTTERY – the odds of getting hit by lightning are better than your chances of winning
47. Time to refinance your home ? Keep an eye on interest rates
48. Pay yourself first – set aside a dollar a day
49. Buy a "piggy bank" for all the spare change you keep finding in your couch
50. don’t spend your next pay raise –INVEST THAT MONEY INSTEAD.

    By putting away a $1 a day you should be able to save at least $50 a month. If you are 25 years old and you invest that money until you are 65 you would have saved $24,000 dollars. Invested in today’s average mutual fund at a reasonable 12% rate of return you would have over $600,000 in your account for retirement.

    Let me be very specific I picked an actual Growth and Income mutual fund as an example. A $10,000 investment on November 6, 1957 would be worth in excess of $600,000 as of 6/30/98 on a fully reinvested basis . On the same terms over the same time period, a savings account would be worth less than $60,000.

    No matter what your situation is -- Money makes it a whole lot better. Even if you have a small amount of money through saving and investing you can be better off , too.

ABOUT THE AUTHOR

    Jesse Brown was a featured public speaker and author and writes a monthly electronic newsletter called "Pay Yourself First". The newsletter "Pay Yourself First" is like taking a financial investment course for a small cost. As President of Krystal Investment Management , Chicago, IL. , Brown , oversees millions of dollars in mutual funds , stocks and bonds for his investor clients.

    Just as he advises municipal agencies, corporations and others, Jesse Brown who has been designated the #1 salesman of Putnam Mutual Funds for 1997-98 provides you with a step-by-step how to process that gives you the foundation that will aid you in taking charge of your destiny and placing your financial future on the road to independence. Brown says " If you want financial security or independence, it really is as simple as, Pay Yourself First."

    Brown acknowledged as the Alumni of the year (1998) is a graduate of the Kellogg School of Management at Northwestern University, Evanston , IL. (MM) and holds a Doctor of Business and Finance Degree (HDBF) from Kean University. He is a financial planner.

    Brown as an author is scheduled to have his forth coming book "Investing in the Dream – Wealth Building Strategies for American Seeking Financial Freedom " published by HYPERION on book store shelves next January.