Here's a little quiz to enliven your afternoon. Who made the following observation about his friends aged 50 to 65:
"Basic, long-term sobriety seems to me a precondition for a successful life, and certainly a precondition -- in most cases -- for a life of prudence as far as money is concerned."
Was it...
a. Bill Clinton
b. Ben Stein
c. Mick Jagger
d. Jon Stewart
Give yourself a pat on the back and an extra piece of chocolate from the office candy bowl if you picked Ben Stein.
To me, he'll always be the droning teacher in the movie Ferris Bueller's Day Off, but Stein is also a lawyer, economist, financial commentator, and honorary chair of the National Retirement Planning Coalition. He's got some financial credentials.
In this rather unusual piece of investing advice, Stein recommends steering clear of drugs and alcohol to get a lifelong edge on investing.
But that's only one piece of Stein's financial counsel. The other key to happiness later in life, he says, is understanding the simple mathematical formula that requires you to put money into savings now if you want to draw money out later.
In other words, put yourself on a long-term path of saving and investing in index funds if you want some security and the confidence that you will meet your long-term financial goals, like retirement. Sounds like it came right out of the mouth of that droning teacher, doesn't it?
Luckily, saving money and investing in index funds is much easier than the microeconomics course you struggled through in college before you decided to switch your major to something that had nothing to do with supply and demand.
It requires you to save money, which has been made much easier by retirement accounts like 401(k)s and IRAs. Some draw money from your paycheck before you're ever tempted to spend it, and others come with tax reductions that offer good incentives to keep your hands off the dollars until you really need them later.
And savers have options in all shapes and sizes for investing their money in something that tracks the average returns of the stock market. "Average" doesn't sound so great, but it's not too shabby considering that most mutual funds and professional stock pickers can't beat the market average.
Index funds and exchange-traded funds, which work like index funds but trade like stocks, allow savers to invest in everything from the total U.S. stock market to a combination of global emerging markets from Argentina to Turkey.
The Vanguard Total Stock Market Index Fund, for example, tracks the overall stock market. Its largest holdings are some of the biggest companies around, like ExxonMobil
If you're interested in getting a bigger piece of the country's small and mid-sized enterprises, funds like Fidelity's Spartan Extended Market Fund may interest you. Its top holdings include Genentech
If you're lured by the foreign and exotic, look at international or emerging markets funds. There's an investment vehicle for virtually every region and sector. Consider investments like the iSharesMSCI Emerging Markets Index Fund
For more details about this slow-and-steady road to future happiness, look into the Fool's Index Funds and ETF centers.
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Fool contributor Mary Dalrymple owns shares in both iShares funds mentioned in this article, and she welcomes your feedback. The Fool has a disclosure policy.
