Why Savings Must Come First

The pandemic might hopefully be lifting. but in the time it’s been afflicting us, we have seen serious pain.

First of all, deaths.

Then serious illness and lingering physical and neurological ailments.

Sadly, there have also been powerful economic effects.

The federal and state governments ordered the shutdown of many industries.

Here in Los Angeles, California the effects have been devastating, just horrible.

Large parts of TV and movie production have been simply closed down.

Actors, makeup artists, lighting and sound people, writers, directors, and prop men and women have all been hammered hard.

I am a Hollywood writer and actor, and for years my career was going extremely well.

Then, it all stopped on a dime last winter. My income from Hollywood-related "work" (I call it "work" in quotes because it's so darned much fun) fell to close to zero.

The problem is that I also have a great many people to support.

Gardeners. Housekeepers. Nurses for my wife, who has been an invalid for years.

Researchers. Shoppers, since my wife has never shopped, and I am a bit afraid of COVID-19. So, it’s important that money is coming in as long as it’s going out.

Or, even better, it’s important that I have some considerable savings before crisis hits.

My sister and I were always taught that we must save.

Before buying toys, before going to the movies, before anything else, we must save.

My parents lectured me endlessly that savings came first.

Life was uncertain, even in times of prosperity, and savings came first.

For most of my life I lived that life by investing in common stocks, and generally, not always, did well. In the last 15 years, I have become obsessed with residential real estate and have bought a startling number of homes.

They required a ton of upkeep, taxes, and gardening, but they were still, by and large, superb forms of savings.

Now, we have had the pandemic.

The government-ordered shutdown of a huge slice of American industry — a government-ordered Depression — is the first of its kind.

We went almost overnight from unprecedented Trump-era prosperity and uniquely low unemployment for peacetime to despair.

I have seen many of my friends literally become suicidal over this situation.

It's not a joke to live in poverty or fear of poverty.

I had one describe in detail how he was going to end his life with a gun he was going to "borrow"from me. I put a stop to that immediately. They all come to yours truly for help.

Yes, they want to be cheered up.

They need to be told that their suicide would kill their beloved parents or spouses as surely as if they had shot them. But they mostly want money.

Not in immense amounts, but certainly not in trivial amounts either.

They know that I have some savings. They also know that I am not working much in Hollywood (really barely any at all), but that I have some work as a writer and an economist.

I would emphasize that diversifying one’s streams of income is also a major-league way to avoid being in dire straits if and when the economy tanks. Any writer who can also be a plumber is in good shape.

This is most definitely not a solicitation for more people to "borrow" money from me.

It never, and I mean never, gets repaid.

But I do urge parents to impress upon their children and for men and women to impress upon their loved ones that saving, starting at an early age, is a matter of life or death.

Just for me, I would start by going to Fidelity or, my favorite, Merrill Lynch, and opening an account in the most widely diffuse stock index fund available with either a very low commission or zero commission.

The SPY, a fund that basically holds all of the 500 largest public companies in the USA, is a great place to start. It will fluctuate over periods of time. But over the long run, its results have been excellent compared with any other readily available stock investment, and it’s fully liquid.

The main thing is to start early and to keep at it when the economy is strong or when it’s weak. Money in the bank. It’s a super good friend.

As Benjamin Franklin, Founding father and great American humorist, once put it, "There are three faithful friends — an old wife, an old dog, and ready money."

Look to it.

The wife and the dog are highly personal.

The money is available to anyone, and that includes you.

Ben Stein is a writer, an actor, and a lawyer who served as a speechwriter in the Nixon administration as the Watergate scandal unfolded. He began his unlikely road to stardom when director John Hughes as the numbingly dull economics teacher in the urban comedy, "Ferris Bueller's Day Off." Read more more reports from Ben Stein — Click Here Now.

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