THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, March 16, 1996 TAG: 9603160003
SECTION: FRONT PAGE: A11 EDITION: FINAL
TYPE: Editorial
SOURCE: Pat Lackey
LENGTH: Medium: 69 lines
A PART OF ALL YOU EARN IS YOURS TO KEEP!
It's a message that Henry L. Zetlin, a 75-year-old Norfolk stockbroker, keeps trying to deliver to young adults, with limited success.
He's on a mission to teach that the dollar you earn and keep becomes your servant, assuming you invest it wisely. Eventually that dollar earns dollars, and those dollars earn more dollars that earn even more dollars - all for you.
But to employ a dollar, you have to keep it, rather than spend it. To really put the dollar to work, you must keep it a long time.
Decades of time are what young people have ahead of them. So save young, says Zetlin, over and over, usually to deaf ears.
Aiming to reach young people, he wrote and paid to publish an investment book and 55-minute videotape, together titled Bulls, Bears, Deers & Pigs. The package, priced at $23.95, is available at several local bookstores. He's confident he'll lose money on it.
But Zetlin feels as though he knows something everybody ought to know and would know if only people would pay attention to him and save and invest 10 percent of what they earn. That's his constant theme: A part of all you earn is yours to keep!
For young adults' attention, Zetlin must compete with America's credit-card culture and its drumbeat message to consume.
Commercials calling for buying are as numerous as three-leaf clovers. Commercials calling for saving are as rare as the four-leaf variety. Jeans that fit just right are more immediately appealing than investments that will make you very happy in the distant future. A new car you buy is apparent to all; money you have invested is not.
Zetlin recommends aiming for a 9 percent or 10 percent annual return through investments in common stocks or stock mutual funds. You have to be patient, he said, assuming that a stock will drop immediately after you buy it and rise immediately after you sell it. What matters is that the stock's value rise over the time you own it.
The expression ``Time is money'' is usually thought to mean that time wasted goofing off might have been used earning money. But the big bucks are made from money using time to earn money.
Consider these examples from Zetlin's book, based on an average annual return of 10 percent: If, beginning at age 35, you managed to invest $5,000 a year for 10 years, $50,000 altogether, and never invested another dime, at age 65 you'd have $645,862. If you saved $5,000 a year for 10 years, beginnng at age 45, you'd have $240,539 at age 65. Or if you saved $5,000 annually for 10 years, beginning at age 55, you'd have $89,584 at age 65. The difference between $645,862 and $89,594 is the difference between saving at age 35 and saving at age 55.
The pity is that we can't live our financial lives backward, earning the most money at the beginning rather than the end. That way it would be easier to invest money while still young.
Nothing is fail-safe, of course. You need an investment strategy, Zetlin said, and maybe guidance. If you get guidance, his book advises, don't get cheap guidance; get good guidance.
What's certain is that investing nothing while young will cut your chances of achieving a comfortable retirement.
But, hey, what's retirement? It's something that happens only to old people. MEMO: Mr. Lackey is an editorial writer for The Virginian-Pilot.
by CNB