Sound Investing Paul Merriman on Long-Term Investing, Compounding, and Building Wealth
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Dec 17, 2025 
Paul Merriman, a legendary investing educator and founder of the Merriman Financial Education Foundation, drops invaluable wisdom on wealth-building through long-term investing. He stresses the importance of starting early and utilizing low-cost index funds. Merriman discusses how compounding works quietly over time and emphasizes the benefits of small-cap value investing for long-term returns. He also shares practical advice for young investors, highlights the significance of saving consistently, and cautions against high investment fees.
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Paid Grandchild To Seed An IRA
- Paul paid a grandchild to appear on a catalog cover and put the earnings into an IRA as an example of creative early contributions.
- He used that story to show how even small, legitimate early earnings can seed retirement accounts.
Expenses Compound Against You
- Minimize investment fees because expenses compound against you and erode long-term returns.
- Choosing low-cost index funds keeps more returns in your family instead of paying managers high ongoing fees.
Use Bonds To Smooth Withdrawals
- Allocate bonds for retirees or people who need lower short-term volatility; consider 40% bonds if you need less drawdown.
- Younger investors who distrust stocks can start with a 60/40 split and increase equity exposure as they emotionally handle volatility.
