85. Look past your working years. Even if you hang up your hat within the decade, wealth building is a longer-term project. Yet only one in five pre-retirees uses a 20-plus-year time horizon when making big financial decisions, according to a Society of Actuaries survey. Bad idea.
Today's 65-year-olds have a 50% chance of living to their mid-eighties. With above-average health, your life expectancy is even longer. So stay committed to stocks. Vanguard and T. Rowe Price 2015 target retirement funds have 50% to 60% in stocks.
86. Invest for income safely ... Over the past 30 years, stocks that pay a dividend have returned five times as much as nonpayers. Focus on firms strong enough to keep up (and boost) payouts. Add a layer of defense by sticking with relatively cheap stocks, since dividend-payers are getting expensive.
Josh Peters, editor of Morningstar Dividend Investor, likes Chevron (Fortune 500) (3% current yield) and , Philip Morris (Fortune 500) (3.6%). Both trade at P/E ratios below their industry's norm and have boosted payouts by roughly 10% annually over the past three years. ,
87. ... Or take a flier. Investing in the 10 highest yielders in the Dow Jones industrial average -- the "Dogs of the Dow" strategy -- isn't for the faint of heart.
Some stocks are high yielders because they throw off so much cash (think AT&T (Fortune 500), others because their prices have sunk (take , Hewlett-Packard (Fortune 500)). This aggressive approach, which captures both kinds of high yielders, has nearly doubled the market's return since 2000. You can buy all 10 via the , Elements Dogs of the Dow ( exchange-traded note or )Hennessy Total Return Fund (. )
Just starting out? Now's the time to create a solid plan for investing and saving.