Over the past several decades I’ve been a devotee of prosperity. During this time I’ve encouraged people to save and invest for their future. My financial newsletter as well as a regular flow of articles, stress the importance of amassing assets. In these writings I discuss savings and retirement programs, corporate stocks and bonds, rental real estate, mortgage lending, and a variety of other more or less sophisticated methods for achieving wealth. My belief has been that, provided with guidelines and encouragement, any person can learn to master the techniques needed to become prosperous.

However, I recently received a letter that took me aback. Its writer, a woman from a small town in West Virginia, forced me to reevaluate my presumptions when she informed me: “My husband and I have read many of your articles these past months and most of it sounds like good advice, but we have a problem. Neither of us are confident that we can select good stocks, and we don’t trust the mutual fund salesmen. Neither do we want to own rental real estate, or hold mortgage loans, or do many of the other things you discuss. Our question is simply this: Can you provide us with just a few things we can do which require no particular knowledge or involvement, that will let us retire in comfort when we’re ready in about forty years?” Because I wasn’t quite prepared with an answer, I set her letter aside . . . and there it sat for a couple of weeks while I mulled it over. What do I say to someone who hopes to achieve a comfortable retirement, but doesn’t really want to do much of anything to bring it about?

After some thought, I believe I’ve figured it out. And while pondering the dilemma, it dawned on me that a lot of other people must be of like mind. Devoting an adult lifetime adroitly acquiring assets goes against the grain for many persons. Whatever they attain in life will come with minimal expenditure of time and effort. To that end, I have a program to offer, though it requires a caution: What I advocate will enable most persons to conclude their working years with enough to live in the style to which they had become accustomed. But realize that the standard of living achieved in this manner will be something less than bountiful. With this understood, let me describe three life habits that will enable you to enter the retirement years with confidence.

1. Don’t buy anything on which you pay interest
Whatever you purchase will be something you can afford. If you possess a credit card on which you charge things, pay the balance in full each month before the credit card company collects any interest. Operate this way and the interest rate on the card means nothing. If for any reason you can’t conduct yourself in this fashion, cut up the card with a scissors. As another example, your vacant living room is an embarrassment, with the only suitable furnishings beyond your cash budget. Your two likely solutions are to go into hock for forty-eight months for the attractive set you want, or make do with low grade merchandise from a cheap discount house. A better decision is another choice that friends of mine, a young couple, made many years ago. For three years their living room sat vacant until they could afford to furnish it with what they really wanted. As you might guess, they are today wealthy oldsters. Stepping out a little further, consider transportation. Your auto, though paid off, is now five years old, with nearly 60,000 miles on the odometer, and no one you know drives anything this dated. A new car that can be purchased for $23,500 is available on a 5-year contract through a dealer at zero percent interest. Is this the way to go? Not on your life. Although you see no interest charged, it’s there, built into the price of the car. Bought for cold cash, it would probably cost $19,000. So what do you do? You drive the old car until you can afford its replacement. And if your friends think you look dated, consider it a compliment.

2. Own your residence free and clear
When your paycheck becomes a relic of the past, you’ll want your housing costs to join it into oblivion. This means that you must own your home with no mortgage. It’s easily accomplished. Early in your life purchase a house with whatever down payment you can afford. Choose a long-term, fixed-rate, fully amortized mortgage, and make the regular monthly payments until it’s paid in full. As the years pass and your equity grows, avoid any temptation to dip into it for such things as schooling for the kids, the long-awaited vacation you’ve always wanted, or the surefire investment that your brother-in-law guarantees will put you on easy street. Consider the home a sacrosanct element of your retirement years, not to be further encumbered or compromised in any manner.

3. Set up your rainy day account
Regardless of however else you choose to spend your money over a lifetime, one thing must take precedence: As quickly as possible open a self-directed Roth IRA, and if married, another for your spouse. During each of your working years you will contribute the maximum allowable amounts into these accounts—$4,000 in 2005 through 2007, increasing each year thereafter. They should be opened with a large discount brokerage like Schwab, into which will go interest-bearing vehicles as the sole holdings. These will be guilt-edge securities such as U.S. treasury notes and bonds, FDIC-insured certificates of deposits, money market accounts, and perhaps high-grade corporate bonds if you’re willing to take the time to consider them. The benefits you derive are twofold: You will reap the rewards of compound interest—the closest thing to magic you’ll ever see—and all earnings will be entirely tax-free. If started early enough in life, such an account may well accumulate a million dollars.

Let me sum it up. If you follow the three-point program I’ve just outlined, you will enter your post-working years satisfactorily. Though you’ll not retire in grand style, able to tour the world on your private yacht or bask in the limelight as a celebrated patron of the arts, at least you’ll not be dependent upon family or government for your daily sustenance. It’s an acceptable conclusion; most people in this world fare far worse.

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