Quotes from Taylor Larimore

The shortest route to top quartile performance is to be in the bottom quartile of expenses. —Jack Bogle

I helped put two children through Harvard—my broker's children. —Michael LeBoeuf

Index investing is an investment strategy that Walter Mitty would love. It takes very little investment knowledge, no skill, practically no time or effort-and outperforms about 80 percent of all investors. It allows you to spend your time working, playing, or doing anything else while your nest egg compounds on autopilot. It's about as difficult as breathing and about as time consuming as going to a fast-food restaurant once a year.

Here is the crux of the strategy: Instead of hiring an expert, or spending a lot of time trying to decide which stocks or actively managed funds are likely to be top performers, just invest in index funds and forget about it!

It's been said that whom the gods would destroy they first make mad. A large sum of cash can create illusions of endless wealth, especially if it's a new experience.

There is a crucially important difference about playing the game of investing compared to virtually any other activity. Most of us have no chance of being as good as the average in any pursuit where others practice and hone skills for many, many hours. But we can be as good as the average investor in the stock market with no practice at all. Jeremy Siegel, Professor of Finance, Wharton School, University of Pennsylvania, and author of Stocks for the Long Run

Warren Buffett, chairman of Berkshire Hathaway and investor of legendary repute: Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals.

Wall Street wants you to believe they are there to make money for you, but their true purpose is to make money from you.

list of our favorite financial and investing websites is provided at the end of this book.

Create a simple, diversified asset allocation plan. Invest a part of each paycheck in low-cost, no-load index funds according to your plan. Check your investments periodically, rebalance when necessary, then stay the course.

The rule is simple: Place your most tax-inefficient funds into your tax-deferred accounts, then put what's left into your taxable account.

How Do We Know If We Need to Rebalance? We need to know several things in order to determine if our portfolio needs to be rebalanced. First, we need to know our desired asset allocation. This was determined when we first established our asset allocation plan, and possibly revised and refined it later as life cycles and events made changes to our plan necessary.

Let's assume a child is born today. For the next 65 years, she or her parents will deposit a certain amount into a stock mutual fund that pays an average annual return of 10 percent. How much do you think they need to deposit each day in order for her to have $1 million at age 65? Five dollars? Ten Dollars? In fact, a daily deposit of only 54 cents compounds to more than $1 million in 65 years. It really helps to start early.

A 25-year-old who invests $5,000 in a Roth IRA once a year for 40 years reaches age 65 with a tax-free fortune of $1,625,149.

children, you can use any EE Savings Bonds purchased after 1989 and all I Bonds, regardless of purchase date, tax-free, for all qualifying educational expenses. However, to qualify for this tax-free educational benefit, the Savings Bonds must be registered in one or both parents' names.

mutual fund prospectus is the single best way to find out about the objectives, costs, past performance figures, and other important information about any mutual fund you're considering investing in.

Additionally, our bond allocation may be further broken down into desired percentages in sub-allocations of the bond market such as intermediate-term investment grade bonds and inflation-protected securities.

Taxes can be your biggest expense. Invest in the most tax-efficient way possible. Put tax-inefficient funds in your tax-deferred accounts, and select tax-efficient investments for your taxable account.

Remember, one of the greatest gifts you can give your children is to be financially independent in your old age, thus ensuring that you won't become a financial burden to them.

Obviously, at a minimum, you have to check your portfolio as frequently as you've decided to rebalance.

In contrast, the majority of profits in an index fund are not taxed annually, but are deferred until the money is withdrawn—and then taxes are paid at the lower capital gains rates.

Vanguard Total Stock Market Index.

Mr. Bogle suggests that owning your age in bonds is a good starting point. So, a 20-year-old would hold 20 percent of his/her portfolio in bonds. By the time this investor reaches 50, the bond portion of the portfolio would have gradually increased, in 1 percent increments, to now represent 50 percent of his portfolio.

Morningstar.com also offers a free online portfolio tracker. And, if you're a subscriber to its Premium Service, you can also use its enhanced Portfolio X-Ray feature that can provide a much deeper analysis of your portfolio.