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MarksJarvis’ advice for saving starts here: Start early

“I know how to talk to people about money. I don’t talk down to them, I don’t nag at them. I talk to them like a friend. I got rid of all the jargon,” says Gail MarksJarvis.

Gail MarksJarvis
Courtesy of Gail MarksJarvis
Gail MarksJarvis

No matter who wins the presidential election, one thing is certain: Taxes are going up, says financial writer Gail MarksJarvis. The baby boomers haven’t saved nearly enough for retirement, and the rest of the country will have make up the difference. Exactly who will be paying and how much is still a mystery, though.

“Both candidates have left that question very vague. I’ve been analyzing this and talking to people who are advocates of both candidates, and they have left this vague by design. That’s because both candidates are going to have to do things that are very unpopular,” she said in a recent interview. “There’s no question: We have to raise more tax money.”

MarksJarvis began her career writing about politics and business, and carefully studied the flow of money through every system in society. One day her editor suggested she write about personal finance, and she quickly developed an expertise that has made her one of the nation’s most popular finance writers. She finds that personal and national finances are closely connected.

“Our ability to save for our own retirements will be affected by our need to pay for the current retirees, and that means higher taxes. But they’ll have to change what we know about taxes and the tax code so we won’t know exactly what’s happening,” she said. “For instance, Romney has talked about getting rid of loopholes. What does that mean? Whose loopholes? Some of the loopholes are things that people cherish, like the mortgage deduction, or the deduction on the money you put on your 401(k). That will make it a lot harder for people to save for retirement. But Obama hasn’t said anything either. And no matter who wins, no one will be able to say, ‘This is what the public wants,’ because the election is going to be so close.”

Simple strategy begins with starting early

In the future, MarksJarvis predicts, Social Security and Medicare will still exist, albeit at reduced levels. So we all need to handle our own money carefully in order to retire comfortably — or at all. If you are 25, you’re in luck: Her book, “Saving for Retirement (Without Living Like a Pauper or Winning the Lottery),” outlines a simple strategy to accumulate a million dollars for retirement by saving only $25 a week, investing in stocks and bonds funds. (If you wait till you are 35, it costs $87 a week. Wait till 45, and that’s a painful $245 a week.)

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MarksJarvis, who grew up in Duluth, writes about finances and economics, and wrote a personal finance column at the Pioneer Press for many years. (The paper still runs her column in syndication, though she’s now at the Chicago Tribune.) She receives thousands of letters a year from people with money questions and money problems.

“A lot of people write books because they want to be authors or be known or advance their careers,” says MarksJarvis. “As naïve as this sounds — and I know this sounds so stupid — but I just wrote my book because I felt the pain of all these people calling and writing me over the years, and I just wanted to help them, to give them something to hold on to.”

Her book came out in 2007, and covered every element of a personal portfolio, including buying a home, 401(k)s, saving for college, and saving for retirement. It became a best-seller. And then in 2008, every personal-finance book instantly became outdated. But MarksJarvis didn’t feel a need to write a new one; she’d already written the book. So she tested the old one.

Tracking earlier advice

The new edition of the book analyzes the advice she gave people in the first edition, and tracked what would have happened had people followed it — and left it alone after the crash, no panicking allowed.

“It’s stunning how well you would have done. First you would have lost a ton money, and said, ‘Oh my gosh, I’m ruined for life.’ But in a little over a year, you would have been back to even, and by March of 2012, three years after the worst moment of the stock market collapse, you’d be up [from a $10,000 theoretical investment] to close to $13,000.”

She says the financial services industry goes to great lengths to intimidate people, and make investing sound difficult and scary. She wanted to show people how to manage their own finances.

“I know how to talk to people about money. I don’t talk down to them, I don’t nag at them. I talk to them like a friend. I got rid of all the jargon that confuses people,” she said. “A lot of books are written by industry professionals and they don’t know how regular people think. The TV ads for financial industry services make it sound scary, like you couldn’t possibility understand what to do.”

But you can. Just save small amounts regularly and invest it wisely. “I know people are scared after what’s happened,” says MarksJarvis. “But life has gone on and people are making money again.” 


Author discussion with Gail MarksJarvis. Thursday, Nov. 8, 7 p.m. Barnes & Noble HarMar, Roseville.