Review of "Seeds of Wealth"

I read The Seeds of Wealth by Justin Ford, and would like to share some of its message. I got it through Agora Financial.

The thesis of the book is that you should save and invest 100% of the gifts given to your children from age 0-5. Then from 5-18, you should save and invest 50% and bring the child along toward the point where he or she is interested and excited about saving money. From 18 on, he will be saving 10% or 20% of his income, and by age 40, the miracle of compounding may propel your offspring to millionaire status.

I like your thinking there, Justin. Something sure needs to change, because neither Uncle Sam nor my employer are interested in keeping me off the gerbil wheel.

Good read here for steady savers with a long investment horizon and those interested in low-expense-ratio mutual funds. Ford is not a market timer. He does have an example that bugs me a little, and that is including market returns through the crash of 1929. The problem is not so much for the person starting to save in 1929, but the person about to tap his nest egg in 1931, when he has seen his portfolio savings drop in half.

Ford does have a good treatment of bringing the kids on board for investing, for avoiding the "gimmes," and for teaching them honest work and diligence. And the book was a good reinforcement for me after taking a financial seminar at church.

I hope the kids will remember what their old man taught them when they're sitting on their small fortunes. I doubt that Social Security will be very secure by then.