Sunday, January 3, 1999

Yes, you can be rich.

You can do it without starting an Internet company, without the help of an investment guru, without special knowledge of currency trading, and without insight into the workings of the Federal Reserve. You can do it without ever buying, or selling, a derivative, without ever selling Yahoo short, and without sitting at a computer terminal day trading stocks.

Then how do you do it? By concentrating on your own life and finding the millions of dollars hidden within it, waiting to be found. All you have to do is give your life the attention it deserves.

While this has been a regular theme of my column for years, I'm not going to ask you to take my word for it.

This time I want you do yourself a favor. Go to a bookstore and buy a copy of "Getting Rich In America" by Dwight R. Lee and Richard H. McKenzie (Harper Business, HB, $25.00). Subtitled "Eight Simple Rules for Building a Fortune and a Satisfying Life", Professors Lee and McKenzie show that ordinary people can become wealthy by concentrating on the big and small decisions of everyday life.

That's where the wealth can be found.

Here are some examples of the small decisions that can lead to riches:

Make it big Without the Lottery. A study of lottery ticket purchases showed that the average person in the lowest income group spent 2 percent of income on lottery tickets. Investing only $200 a year at 8 percent, starting at age 18, would grow to $106,068 by age 67. That's about twice the median household wealth in America. Nearly a Million in Used Cars. If you buy a used Camry instead of a new one and invest the difference from age 23 to 67, you would accumulate $869,638. The Starbucks Portfolio. If you buy a regular cup of coffee rather than a latte or expresso and take a brown-bag lunch to work from ages 25 to 67, you will accumulate $282,700. It's All In the Feet. Buying two pairs of $40 sneakers instead of $165 sneakers a year from ages 14 to 19 would accumulate $73,745. If You've Got the Time, You Won't Have the Money. Want a Rolex? The authors calculate that the purchase of a $4,000 Rolex at age 30 means you are losing the opportunity to have $68,983 at age 67. The Fortune in Junk Food. Do you munch on vending machine cookies, potato chips, and other junk food? Avoiding it and saving $1.50 a day from 18 to 67 would accumulate $290,363. It could also give you a longer lifespan.

Add those figures up and you've got $1,691,497. Enough to put you among the top wealth holders in America. More important, this nest egg could be accumulated simply by being more careful about spending. It's a matter of choice.

Your choice.

It should be noted that none of these decisions are heroic. None involve a life of relentless self-denial and penny pinching. Instead, Mssrs. Lee and McKenzie demonstrate a multitude of personal commitments that turn out to be more important than most of the investment decisions that get so much attention.

Conspicuously absent, for instance, is any discussion of investing in Europe versus the Pacific Rim versus Emerging markets; any discussion of small capitalization stocks versus large capitalization stocks; growth versus value stocks; tax efficient investing; or market timing. Those concerns are all sideshows once you have made a fundamental decision to invest in equities.

Instead, they show the investment value of not smoking, of avoiding being overweight, of choosing your work, of choosing your spouse and staying married, and of tending to your personal health. Each of these choices is mundane. They lack intergalactic importance. They are not glamorous.

But they are important in our lives and that's what counts.