Before Julius Westheimer went to the hospital for surgery -- from which he is recovering -- he left behind advice from some of his favorite columns:
IF YOU PUT $25 a week into stocks that gain 10 percent a year -- that's just under the 10.2 percent average annual return for stocks over the past 75 years -- you will have $103,000 in 22 years, before taxes.
The magic of compounding: If from age 20 to 65 you save $50 a month and get an annual 8 percent return, at age 65 you can take out $1,658 every month until age 100.
In a tax-deferred IRA, invest $2,000 a year from age 25 to 35 -- then stop. At 12 percent, your money will grow to $1.2 million by age 65.
If you retire today with a $40,000 annual income, you will need about $100,000 a year 25 years from now to enjoy your same standard of living, figured at recent inflation rates.
To cope with inflation, buy stocks of companies that annually raise your dividends substantially.
If you had invested just $1,000 in Warren Buffett's most favorite stocks in 1965 when he took over Berkshire Hathaway, you would be worth about $1.5 million today. His favorites now include Coca-Cola, Disney, GEICO, American Express and Capital Cities.
He recently bought a huge stake in McDonald's Corp.
Speaking of taking stock advice from Warren Buffett or anybody else, remember that you never know when that person sells. You could be left holding the bag. It's better to have someone supervise your account who advises you when it's time to get out.
Between 1934 and 1996 there were 60 "reasons" (excuses) why people avoided the stock market -- Depression, wars, assassinations, 1954 headline "Dow Tops 360; Experts Say Market Too High," 1986 headline "Dow Nears 2,000 Barrier," etc. -- but during that period a $1,000 investment in the S&P 500 stock index grew to $660,000. And that's not a misprint.
If you had bought BGE stock 10 years ago, you would now be receiving a 12 percent -- and rising annually -- return on your investment, plus having doubled your money.
Since 1915, the S&P 500 stock index has followed closely the number of people reaching age 49-50. "As people move into this age bracket, they begin to invest and fuel the stock market," says Harry Dent Jr., in "The Great Boom Ahead," adding, "If this correlation continues, the Dow Jones average could move to 18,000 in a decade."
Market "timing" is a loser's game. Over the past 10 years, 50 percent of the S&P 500 stock index gain came in only 10 of those 120 months.
Can anyone pick those 10 months?
Pub Date: 5/09/97