My Five-Step Guide to Getting Rich
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My Five-Step Guide to Getting Rich

Joel Stein shares his midlife investment strategies

Photo illustration of a key inside of a quarter
Paul Spella

Sometime in their 40s, all my male friends had the same realization: I would like to be rich.

Then they started to formulate plans for getting rich, which they want to do quickly. That thought usually leads to get-rich-quick schemes, which invariably lead to disappointment.

I have a friend who took a course in house flipping, which is like paying to watch a bad reality show. Another friend tried to sell screenwriting software. Another opened a wine bar, which at least gives you somewhere to go when your dreams fall apart.

Most of my friends eventually came to me for advice. They figured I must know some secret because I have saved a fair amount of money despite the fact that I am a journalist.

Here’s how I did it. Will these investment strategies work for you just like they did for me? I guarantee nothing. But if you like things like security and financial independence, you should definitely consider it.

1. I stopped thinking I could predict the market and got an index fund.

The stock market is so complex that Jim Cramer has yelled about it for an hour a day for more than 17 years. Some studies have shown that professional investors do not, over time, beat the average investor. 

Ever noticed a cool company and wanted to get in on it? Those thoughts are usually along the lines of, Apple makes cool products. You are years late on those observations — no matter what they are. There are venture capitalists who do this. You are not a venture capitalist. If you want to gamble, go to Vegas. Way more fun than checking AAPL on your phone every day. 

What I did was get an index fund, which is an algorithm that buys a basket replicating the stock market. I like Vanguard’s Total Stock Market Index Fund, but you should also look into options from Fidelity, Charles Schwab and Wilshire. If you want to get fancy, look into the Total International Stock Index Fund or the Total Bond Market Index Fund, depending on your tolerance for risk.

2. I never pay an investment adviser.

Since you can’t beat the market, all you can do is play it cheaply. Look at the fees of every fund you might buy. Those tiny percentages eat into your growth over time. Which is why I like Vanguard, where the investors are the owners of the company. Just don’t overpay. You are buying something you will never see. This isn’t a sports car. This is paper towels at Costco.

3. Time won’t give you time.

You know why investors say that the best time to invest was yesterday? Because investors are not people with senses of humor. But time is the biggest leverage you have. Growth is exponential. And you are old. So stop spending and start saving.

I have a friend who retired at 40 after running a company. Sure, he had no kids. And yes, he went to Harvard Business School. But he socked his money away early, put it in an index fund and has not worked for 20 years. His money is making more than he ever did. 

Is it too late for you to do that? Technically yes, because you’re already over 40. But we’re likely to live a long time. Being 15 years behind my rich friend is not so bad.

4. I stopped looking.

Female investors outperform men by 0.4 percent in the market. Which, given that the market goes up about 10 percent a year, is a huge difference. You know why? Because they don’t watch Jim Cramer. They don’t check AAPL on their phones. They maybe glance at the quarterly reports and rebalance between stocks and bonds every few years. 

All that trading and thinking you can beat the market is expensive. You know why men spend less than women on clothes? Because we don’t go clothes shopping all the time. Don’t go stock shopping all the time.

5. I realized that I don’t actually want to be rich.

Manopause leads us to want a lot of things we meant to get when we were 18: sports cars, one-night stands, seeing Metallica live, a pinstripe suit. But it’s too late. None of those things will make us happy now. 

Having enough money to not look at prices at the grocery store is a great goal. But rich? That’s something you hope for in elementary school when you fold paper to see if you get a mansion, apartment, shack or house. Winning the lottery means being richer than your friends and family. Which means moving away from them. And doing stuff they can’t afford to do. And them asking you for money.

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