Working Smarter, Not Harder

It’s worth saying OVER AND OVER AGAIN – your money should be working just as hard, if not harder than you are.

I live by “use your head, not your feet”; just watch me unload groceries; I’ll balance a bag on my head if it means not making a second trip. I seldom go to another room in my house empty-handed and my trips up and down the stairs to do laundry are real balancing acts. So working smarter, not harder really resonated with me.

This clearly explains why I was so fascinated by something I heard many years ago. It went something like this:

“If you had invested $10,000 in Templeton Growth Fund in 1955, it would have grown to over $4 million in 1995”

Interestingly enough, my parents started ranching in the mid-1950s and retired in the mid-1990s. I grew up on that farm with 6 siblings and witnessed how VERY hard they worked. Besides ranching, they ran the local post office branch, drove a school bus, fished commercially, and did custom carpentry for people in the area. Those were also the days of huge gardens and plenty of freezing and canning, baking bread, milking cows, butchering beef, pork, and chickens to put food on the table year-round.

Now I don’t know exactly what it cost them to start up their ranch, but I would dare to bet it would be in the $10,000 area. I also don’t know exactly what they sold the ranch for but I KNOW IT WASN’T $4 million. It was probably about a tenth of that. So you see what I’m getting at – invest $10,000 and do NOTHING for 40 years while it grows to $4 million OR invest $10,000 and work really hard for 40 years and end up with less than 1/10th of that!

Of course, there is more to the story. Do you think any bank would have lent them $10,000 to invest in a mutual fund (a very new concept at that time) And when that fund was down 20% two years later (to $8,000), I’m pretty sure most would panic and sell before they lost ALL their money given the lack of knowledge of what they actually owned. If they had the courage to tough it out, I would dare to bet the bank would have called in the loan. And “doing NOTHING” wasn’t an option. Besides having to make payments on the loan, you still needed to provide for your family – a roof over their heads and food on the table!

So investing $10,000 in a mutual fund at that time was not realistic, but it made me realize that had they invested just $1,000 in that fund and left it there for 40 years, they would have had an extra $400,000 in their retirement. It made me sad to think that they could have had a more comfortable retirement, but it definitely sparked my interest in making my money work for me – JUST AS HARD IF NOT HARDER THAN I WAS.

FYI - Really, I am not lazy; I think we should all work hard and I believe that the harder you work, the luckier you get. I just want everyone to realize that they can “work smarter by making their money work harder” regardless of what they make.

Coming Next on Oct. 28 - THE PROOF IS IN THE NUMBERS

Here is what I figured out – if you could just THINK like a smoker (I don’t recommend you start smoking to prove this theory) and invest that money instead of smoking it, how rich do you think you could be?