The 50 Smartest Things to Do with Your Money
by David Futrelle, George Mannes and Cybele Weisser

July 2005

[Continued, page 3]

39. Buy running shoes. How is investing in $120 sneakers a smart money move? Let's see: Running reduces the risk of heart disease and stroke, lowers blood pressure and burns more calories than any other exercise--for less than a $50-a-month gym membership.

40. Owe no plastic If you have cash wallowing in a money fund or bank account at 1% and a credit-card balance at, say, today's average rate of 13%, write a check for the balance immediately. That's a 13% return--with no risk.

41. Send the kids to college Save whatever it takes, borrow whatever it takes, spend whatever it takes. Education is the smartest investment you can make in your children's most valuable asset, their earning power. College graduates make 80% more than people with only a high school diploma, which adds up to an extra million over a lifetime.

42. That goes for you too A recent study found that going back to school to get an M.B.A. can add a full 45% to your salary.

43. Speak confidently No one ever got a raise by being a wallflower. Spend a few hundred dollars on a public speaking class at a community college or get training and practice at Toastmasters (toastmasters.org). Annual dues: $50

44. Get a paycheck without work You have about a 30% chance of becoming disabled for three or more months at some point in your working life. Disability insurance keeps the cash flowing. You need this. If you're not covered at work, get a policy that pays 60% to 70% of your earnings until age 65. For help shopping, go to iii.org.

45. Have a plan Hire a financial planner to review your retirement and college savings plans. At garrettplanningnetwork.com and myfinancialadvice.com, you'll find planners who work by the hour (usually $150 to $200 per). Getting on track will take eight to 10 hours up front, plus an hour or two for a yearly checkup.

46. Buy large-cap growth stocks "They're the cheapest that I've seen them, compared with bonds, since 1981," says Tom Marsico, manager of two top-performing large-cap funds, Marsico Growth and Marsico Focus. He likes GE (GE), United Health (UNH), Genentech (DNA) and Procter & Gamble (PG), which are dominating their markets and generating cash.

47. Buy Berkshire Hathaway Long-time value investor Wally Weitz points out that with each B share (BRK.B; recently $2,840), you're buying, at a discount, a highly diversified portfolio overseen by his favorite investor, Warren Buffett. "Whether the market goes up or down, or interest rates go up or down--whatever opportunities come or go," says Weitz, "Warren's thinking about investing your money on a daily basis."

48. Buy quality Stocks that Bill Nygren, manager of Oakmark and Oakmark Select, likes include Wal-Mart (WMT), Home Depot (HD) and Kohl's (KSS). "The opportunity five years ago was in mundane businesses left behind in the irrationally exuberant market," he says. "The opportunity today is superior large businesses that are priced as if they were average."

49. Stop assuming immortality Hire a lawyer to craft a will, a durable power of attorney, a living will and a health-care proxy. It may cost $1,500 to $2,000 (more for large or complicated estates), but could save your heirs thousands in taxes and fees. Unless, of course, you live forever.

50. Renovate Average cost to fix a dated or cramped kitchen: $42,660. Average fraction of that you'll add to your home's value: 80%. Pleasure derived by creating a gathering spot that fosters more family time: off the charts.

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