Financial advice about saving and investing is timeless

I received a thoughtful e-mail recently from John in Ham Lake. He's 69 and was responding to last week's column about the sensibility of owning good-quality dividend-paying stocks and mutual funds in retirement.

Among his comments was this: "Some advice I was given when I was 20 years old in 1959 was to save something out of every paycheck, having it invested before I ever saw it."

He bought stocks, savings bonds and invested in a 401(k) program over the past 20 or so years. Those investments have "put our children through college, helped us purchase a home and gave us retirement income."

John's e-mail reminded me that it's so easy to get lost in the technical and financial complexities of managing money, when what really counts as sound personal finance is developing good habits.

That means save for retirement in a tax-sheltered pension plan with a well-diversified portfolio. With automatic withdrawals from your checking account, build a nest egg that can be used for everything from surviving a layoff to putting a down payment on a home.

Own your own home. Don't take on credit card debt. Keep good financial records. Keep it simple.

There's an important idea that underlies this kind of approach to managing money over a lifetime: a margin of safety. It's a concept made famous by legendary value investor Benjamin Graham, who wrote, "Confronted with a like challenge to distill the secret of sound investment into three words, we venture the following motto: Margin of Safety."