If you want to become rich, street smarts, book smarts and some hard work will certainly help. But they won't be enough by themselves, says Robert Goodman, senior economic adviser for Putnam Investments and author of the newly released second edition of
Senior Economic Adviser,
|Recent Meet the Streets|
Jeffrey A. Frankel
Prescott B. Crocker
Goodman tells Meet the Street how to invest for the future (ride it out) and what to do during these times of economic turmoil (take advantage of low stock prices, particularly in blue-chip stocks and in leading technology issues). He also says how much better off he believes retirees would be if the Social Security system were privatized (with even just 15% of the money invested in something along the lines of an S&P 500 index mutual fund, Americans could have twice as much money in retirement after 45 years of saving, Goodman calculates).
TSC: What's in the second edition of your book that wasn't in the first edition?
Goodman: When I was writing the book in 1996, the country was mired in budget and structural deficits. All of the things we stated in 1996 are still valid in 2002. But since '96, of course, we've swung into surplus, so we had to expand that chapter to include what happens to an economy when you're generating a surplus.
One of the problems of having a surplus is many people think surpluses are good. Surpluses are not good. They can be as bad as budget deficits. Because of an imbalance in the system, surpluses will weigh the economy down, whereas deficits will stimulate the economy. The problem is deficits