Chapter 3. Lessons from Smart People

What the wise do in the beginning, fools do in the end.

Warren Buffett

Successful retirement requires something more than just raw financial numbers. That's obvious from the stories of George and Roger, the two retirees we met in Chapter 2. Each one ended his working life with more than enough money, yet they wound up in very different places. Left to their own devices, most people will find themselves somewhere between the two opposites of George, who seems to have done just about everything right, and Roger, who has not managed to have a successful retirement in spite of starting out with plenty of money.

In four decades of helping and watching people manage their money, before and during retirement, I've had a chance to observe how the smartest people I know deal with retirement. It boils down to this: Smart people take a thoughtful, long-term approach to their lives. They avoid extremes, more often than not choosing middle-of-the road investment strategies. They regard their money as a tool, not as the center of their lives. They have plenty of things to live for and they look for ways to connect positively with other people.

Smart Step 1

Smart people make plans for their retirement, financial and otherwise, and they put those plans in writing. It has always puzzled me why people will spend days planning a two-week vacation (and in some cases will spend months planning a half-day wedding and reception), yet those same people will make five-figure ...

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