They love the Fool in Peoria! I recently received an inspiring email from Don Axt, who signed off as the "Motley Fool's number one fan in Peoria, Ill." He offered me an interesting framework with which to think about investing (he called it "a matrix for a lifetime investing") and invited me to share it with you.

It stems from a Rudyard Kipling short story, "The Miracle of Purun Bhagat," which is about a man named Purun Dass, who follows the "old law" in life. Kipling describes it like this:

He had been, as the Old Law recommends, twenty years a youth, twenty years a fighter, -- though he had never carried a weapon in his life, -- and twenty years head of a household. He had used his wealth and his power for what he knew both to be worth; he had taken honour when it came his way; he had seen men and cities far and near, and men and cities had stood up and honoured him. Now he would let those things go, as a man drops the cloak he no longer needs.

In the last quarter of his life, Purun Dass gave up all he had to become a holy man. What Don liked about this was the simple path laid out for a life, living first as a youth, then a fighter (or ambassador, as Axt put it -- in any case, one who struggles with the world at least to some degree, aiming to achieve), then a family man, and finally a holy man.

A good investing life
Don then proposed a similar path for us investors:

  • Spend 20 years as a youth in learning. (Don noted that Berkshire Hathaway's (NYSE:BRK.A) Warren Buffett bought his first share of stock at age 11 -- and says he wishes that he had started earlier.)
  • Spend 20 years investing in the sound new ideas of the day.
  • Spend 20 more years building a solid portfolio (for retirement).
  • And then spend the next 20 years blowing it! (Don suggests aiming for the balance sheet to hit $1,000 on the day the angels come for you.)

He ended his proposal with: "That's what I think. So there."

As it happens, I think he's onto something pretty nifty.

How to do it
Think about it. Spending the early years of your life earnestly learning all you can about investing is an excellent idea. (Of course, ideally you'll keep learning for the rest of your life, too -- from more reading and from experience.) This learning phase can be complemented by early investments, as well, as they can be powerful teachers.

Next up is a phase where you invest in "sound new ideas of the day." To me, this sounds like a cross between Rule Breaker investing and perhaps large-cap investing. Rule Breaker investing, after all, is about finding exciting young companies that are changing the way we do things -- companies in fields such as biotechnology and nanotechnology. (Give our Rule Breakers newsletter a whirl -- it's where I discovered Intuitive Surgical (NASDAQ:ISRG), a company that makes cutting-edge robotics for surgery. A no-obligation free trial will give you access to all past issues, so you can read about every recommendation.)

I would never have my entire portfolio in Rule Breakers, though, as those companies are extra-risky. I'd perhaps add some established large-cap companies to the mix -- after all, they often come up with new ideas of the day, too. Think, for example, of how PepsiCo (NYSE:PEP) and Coca-Cola (NYSE:KO) are selling so many non-carbonated beverages these days. Teas, fruit juices, and plain and flavored waters are some of the sound new products of the day.

Building for retirement
As you enter the second half of your life, it's time to focus more on your retirement. You should have been socking money away into 401(k) plans and IRAs already, but in these last decades of your working life, you'd do well to take it up a level. Try to determine how much you'll want to live off of and what you'll have to have saved to provide that kind of lifestyle. See whether you're ahead of or behind schedule. Make sure you're taking advantage of strategies to minimize your taxes.

We'd love to help you set yourself up for a better retirement. I invite you to take advantage of a free trial of our Rule Your Retirement newsletter (free, with no obligation, for 30 days). Doing so will give you access to all the past issues, which feature, among other things, a host of "Success Stories" profiling people who retired early and are willing to share their strategies. The newsletter also regularly recommends some very promising stocks and mutual funds.

As you approach and enter retirement, consider adding more income-producing investments to your mix, if they're not already there. Some companies that recently sported significant dividend yields include US Bancorp (NYSE:USB) (yield: 4.2%) and Altria Group (NYSE:MO) (yield: 4.9%). You may want to look into companies like these, or check out some other contenders.

Spending days
The last rule calls for us to spend our final 20 years spending down our nest egg, to zero. I admire this idea a lot, but not completely. That's because for one thing, I think it's probably best to spend along the way. Why deprive yourself of fun for most of your life, delaying much gratification? For all we know, our lives might end at age 43, before we get to blow off steam and money.

That said, if you've saved and invested effectively throughout your life, and have planned well for retirement, these could well be years where you spend more freely than before, according to your budget.

So there you have it -- a simple matrix for lifetime investing. Thanks, Don!

Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway, Intuitive Surgical, PepsiCo, and Coca-Cola. For more about Selena, viewher bio and her profile. Berkshire Hathaway and Coca-Cola are Motley Fool Inside Value recommendations. US Bancorp is a Motley Fool Income Investor recommendation. Intuitive Surgical is a Rule Breakers recommendation. Try any one of our investing services free for 30 days. The Motley Fool isFools writing for Fools.