Monday, February 22, 1999

Surf's Up!

by Cass Bielski

Investing analogies seem to be very popular in this space. Perhaps the reason we like them is that they provide deeper understanding and inspiration for Fools who think figuratively. A couple of analogies have been floating around in my brain for the past couple of years:

Have you noticed that when you are many yards out in the ocean a small swell can go by, and you might hardly notice it. However, if you do some heavy paddling to get ahead of that swell, the wave can build to be several feet high as you get closer to the shore and can even carry you along. The feeling is exhilarating.

Investing can provide a similar feeling. When you first start putting money away, the amounts seem laughably small and hardly noticeable. However, if you do the heavy paddling of continuing to keep expenses below income and investing regularly, the wave of money grows through the years until eventually it can carry you along for an exhilarating ride.

Another analogy that has been inspiring me comes from my previous employment in the drug abuse prevention field. There was a saying in that field: "First you take the drug. Then the drug takes the drug. Then the drug takes you."

Although that scenario is quite tragic, if you turn it around a little and apply it to investing, you can end up with a much happier result: "First you make the money. Then the money makes the money. Then the money makes you." Or, as I interpret this: First you invest. Then your investments make money for you. Then the money gives you the freedom to pursue dreams you otherwise would not have been able to.

So, are you ready Fool dudes and ladies? Surf's up!

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