Investing Tips from… Yogi Berra?

This article is a reprint of a class on money management I led at Dahlonega Baptist Church in the Koinonia Sunday School class back in 2002. I recently gave a Toastmasters speech on these 10 points after a friend gave me a photocopy of the old handout I provided in that class, and I thought they were worth dusting off for the blog.

Everything I Needed to Know about Investing, I Learned from Yogi Berra

© 2002, Bryson R. Payne

I hope these quotes, from the man who claimed, “I really didn’t say everything I said”, can help you get started saving and investing.

1. “When you come to a fork in the road, take it!” – Get started NOW! Every day is a new opportunity to start (or improve) saving and investing. Make the choice to do something – even just saving $25 a month means you’ll have an extra $300 at the end of a year (and invested regularly at 10% will be an extra $56,512 in 30 years, when you just might need it).
2. “If you don’t know where you‘re going, you might not get there.” – Set short term and long term goals, and make a plan to achieve them.  If you want to have at least $225,000 in 30 years, you need to be investing about $1200 per year ($100/month) at about 10% (the S&P Mid-Cap 400’s 15-year average return). If 30 years sounds too long, just realize that those 30 years will pass one way or another. Will you have enough to support yourself without working, or will you wish that you had started saving and investing 30 years ago?
3. “You better cut the pizza in four pieces, because I’m not hungry enough to eat six.” – Divide your money as soon as you get it, and you’ll keep more of it. We sometimes think of investing as “taking away” money from our paycheck, so when we try to “take away” from what’s left at the end of the month, we just don’t see how there can be enough to go around. Instead, try to picture yourself dividing what you have into more pieces. We pay our bills because we “have to” – so, make savings one of your most important monthly bills (possibly even by using direct deposit for investing).
4. “This is like déjà vu all over again.” – Let compound interest work for you. Compound interest has been called “the eighth wonder of the world” and “mankind’s greatest invention”. Your investment earns income, and that income earns more income- it’s like déjà vu. Some stock purchase plans allow you to reinvest dividends (income) into more shares of stock, which in turn earn more dividends. However you choose to invest, let your money earn more money by letting compound interest work for vou.
5. “You can observe a lot just by watchin’.” – Learn as you go, but start now. Most people hesitate to invest out of fear-induced paralysis. Usually, this is from being afraid of making a mistake by investing in the “wrong” thing. Perhaps the worst decision, though, is choosing not to invest at all. It we take a small step, like investing $25 a month by automatic debit or payroll deduction into a Roth IRA, we are opening a whole new world of knowledge and opportunities. And, we are one step closer to financial freedom.
6. “If you can’t imitate him, don’t copy him.” – Choose savings strategies that are right for you. Learn from others when you can, but find the investing style that works for you and invest consistently. lf you need to invest by automatic debit from your checking account or payroll deduction from your salary, do whatever it takes to invest every month, every year. If you don’t feel comfortable choosing good long-term stocks yet, invest in an index mutual fund. Adjust your style as you learn more.
7. “Nobody goes there anymore; it’s too crowded.” – Just because everyone else is doing it, it doesn’t mean it’s right, or wrong. Some people jump on the bandwagon in investing and do what’s popular; some people do the opposite. Whatever choices you make with your money, make sure you understand the investment. If you don’t understand why something is a good investment, you probably shouldn’t put your money into it. There are tons of simple, understandable investments available to choose from. Try one or two now, and more will appear.
8. “I knew I was going to take the wrong train, so I left early.” – Plan on making investment mistakes as you learn, and start now. Not every investment is going to be a perfect choice. If you diversify by investing in four to ten stocks or funds, you can afford for one out of every few choices to be a poor one.
9. “It’s pretty far, but it doesn‘t seem like it.” – Make steady progress toward your goals. Invest regularly over a long period of time, and you will see your goals accomplished. Make a commitment to start now.
10. “It ain’t over till it’s over.” – It’s not too late to start investing. If you are able to earn income, you have a chance to begin the habit of saving and investing. Unfortunately, many Americans reach retirement age with little or no savings.

Start as soon as you can, with whatever amount you can, and you will see the fruits of your labor grow.