Some of the greatest minds in investing recommend buying cheap and keeping an eye on costs and fees that can eat away at a profit.
About once a year, I put out a column featuring interesting quotes on financial subjects from the famous and infamous. These range from the directly useful to the chin stroking “Hmmm” kind. Either way, there is bound to be some profit in it: financial, medical or philosophical. To wit;
—John Bogle, the founder of Vanguard said, “Don’t let the miracle of long-term compounding of returns be overwhelmed by the tyranny of long-term compounding of costs.”
Depending upon what study you read, such costs/fees may unnecessarily cost the average saver/investor over $100,000 during their investing life. Especially in this low-interest era.
—Richard Peery, the billionaire developer of Silicon Valley real estate, once told a business partner, “You make your money when you buy, not when you sell.”
Knowing when something is “cheap” seems to be the trick and goes a long way in explaining why more of us aren’t so rich.
— “Never confuse a single defeat with a final defeat.” This quote coming from F. Scott Fitzgerald helps explain his life better, but there is something there for all of us.
— “It’s a game of guessing when other people will panic” Howard Simons, strategist at Bianco Research, told The Wall Street Journal in 2012 about the market.
Sometimes it seems that all matters financial are built on a psychological foundation of mutual trust, which at times of panic sometimes plays out as a game of musical chairs. The question is always “Who will be left holding the bag?”
— “Being realistic is the most commonly traveled road to mediocrity,” said the noted philosopher/movie star Will Smith. Easy for him to say…
—While we’re on the subject of movie-star-wisdom, Jack Lemmon once said, “Failure seldom stops you. What stops you is the fear of failure.”
—Good advice for hard-working physicians from productivity consultant David Allen: “You can do anything, but not everything.”
— “We don’t see things as they are, we see things as we are,” said novelist Anaïs Nin. Deep…
— “Many of our purchases have no bearing on our lives. We tend to overestimate the impact of any one thing on our happiness.” —Unknown.
You can argue the worth/harm of shopping therapy, but it sure keeps our economy afloat.
—On the always timely subject of spending, economist Justin Wolfers insightfully suggested that “Money’s impact doesn’t come from buying fancier stuff. More likely, it signals greater freedom of choice.”
—And no less than Teddy Roosevelt once opined that “Comparison is the thief of joy.” Except, perhaps, when you are shopping and find a “deal.”
—Which brings us back, once again, to the redoubtable Warren Buffet, who said, “Investors should remember that excitement and expenses are their enemies.” Like the casual flirt, potentially dangerous, but can be so much fun.
—We remember the old saw, pertinent to Buffet, now that I mention him, among many others, who have said; “To get really rich, you must get your hands on someone else’s money.” More cynically put, “Where are the clients’ yachts?”
—Lastly, a bit of management wisdom, true for financial and medical affairs and otherwise, from the great conductor Leonard Bernstein: “To achieve great things, 2 things are needed: a plan, and not quite enough time.”