<THE FOOLISH FOUR>

Foolish Four Report
by Robert Sheard

LEXINGTON, KY. (May 21, 1998) -- Procrastination is something on which I've become an expert. In college I perfected the art of writing term papers on the fly, often printing the final copy when I should have been sprinting to class (although I pride myself on having never missed a class deadline). It's cool when you're 18 or 19 to put things off you know have to be done, but that coolness wears thin quickly when it comes to real-life issues like saving for the future.

Yet most young adults have the attitude that you have to have a lot of money to get started and so they wait and wait and wait until they're 40 or 50, and then suddenly realize nothing's put away for retirement. But it's so simple. Don't wait.

Let's say you're 24 or 25 years old, with 40 years to go before retirement, but you don't have much to invest. Just get started anyway. Put one lousy buck into a piggy bank each day and then stash the $365 each year into a Roth IRA.

Let's say you earn an average return of 11% -- the equivalent of the Standard & Poor's 500 Index for the last 70 years. After 40 years, you'd have a tax-free nest egg of $235,727. Not necessarily Easy Street, but not bad for a buck a day. And I expect after a few years you'll want to start saving more. Compound growth infects most people that way.

How about a 15% return -- what the S&P 500 Index has averaged for the last two decades? Your $365 a year would grow to $746,773, completely tax free. Now we're talking.

And if you earn 18%, which the Foolish Four has achieved since 1961? Join the millionaire's club at $1,793,096.

At 22% a year -- the Foolish Four returns since 1971 -- your retirement pool would be 5,760,639 pictures of George Washington deep.

And to top it off with complete lunacy, let's throw in 30% returns. They're not anywhere near realistic, naturally, but I know that's what you're telling people you're getting when you go to cocktail parties. If you somehow became the next investment genius and managed 30% a year, your $365-a-year investment would grow to $57,126,423.

It's really that simple. No excuses. Just get started!

Current Dow Order | 1998 Dow Returns

[Robert Sheard is the author of the The Unemotional Investor (Simon & Schuster, 1998) available now at Amazon.com and your local bookseller.]

TODAY'S NUMBERS
Stock  Change   Last 
 -------------------- 
 UK   -1  1/2   52.88 
 IP   -1  1/16  51.81 
 MO   +1  5/16  37.44 
 EK   -  11/16  70.00 
 
 
                    Day   Month    Year 
         FOOL-4   -0.93%   1.33%  11.06% 
         DJIA     -0.43%   0.76%  15.48% 
         S&P 500  -0.39%   0.26%  14.86% 
         NASDAQ   -0.59%  -2.54%  15.96% 
  
     Rec'd   #  Security     In At       Now    Change 
  
  12/31/97  291 Union Carb    42.94     52.88    23.14% 
  12/31/97  289 Int'l Pape    43.13     51.81    20.14% 
  12/31/97  206 Eastman Ko    60.56     70.00    15.58% 
  12/31/97  276 Philip Mor    45.25     37.44   -17.27% 
  
  
     Rec'd   #  Security     In At     Value    Change 
  
  12/31/97  291 Union Carb 12494.81  15386.63  $2891.81 
  12/31/97  289 Int'l Pape 12463.13  14973.81  $2510.69 
  12/31/97  206 Eastman Ko 12475.88  14420.00  $1944.13 
  12/31/97  276 Philip Mor 12489.00  10332.75 -$2156.25 
  
  
                              CASH    $415.96 
                             TOTAL  $55529.15