“I worry more about the return OF my money than the return ON my money.”
This simple yet profound statement captures a core principle of wise investing. It highlights the critical difference between securing your initial capital and chasing profits. For many, the ultimate goal is not just to make money, but to avoid losing it in the first place. This idea forces a shift in perspective. Instead of focusing solely on potential gains, it prioritizes the foundation of all investing: capital preservation.
Ultimately, you cannot earn a return on your money if you no longer have it. This timeless wisdom serves as a crucial guardrail against reckless speculation and the allure of get-rich-quick schemes. It reminds every investor, from novice to expert, that protecting your principal is the first and most important step toward building long-term wealth.
The Power of a Preposition: ‘Of’ vs. ‘On’
The genius of this quote lies in its clever wordplay. The simple switch from “on” to “of” completely changes the meaning and the investor’s focus. Understanding this distinction is fundamental to managing financial risk.
“Return on my money” refers to the profit generated from an investment. This includes interest, dividends, and capital gains. It is the percentage increase in your investment’s value. For example, if you invest $1,000 and earn $100, your return on investment is 10%. This metric often dominates financial news and discussions.
In contrast, “return of my money” refers to getting your original investment back. This is your principal, the initial sum you put at risk. If you invest $1,000, the return of your money means you receive that full $1,000 back at the end of the investment period. This concept is about security and avoiding loss. Prioritizing the return of your principal means you are unwilling to risk losing your starting capital for a chance at higher gains. Source
. Introduction to Investing – Investment Risk
The Surprising Origin Story
Many people attribute this savvy advice to famous figures like humorist Will Rogers or even founding father Benjamin Franklin. However, the historical record tells a different story. The phrase did not originate from a famous individual’s wit. Instead, it was born in the world of early 20th-century advertising.
The earliest documented use appeared in a 1920 newspaper advertisement for Prudence Bonds. The ad astutely warned potential investors about the trade-offs between safety and yield. This shows the concept was first a marketing tool. It was designed to build trust with a public wary of risky ventures. Source
Throughout the 1920s, other financial institutions adopted this powerful messaging. They recognized its ability to communicate a complex idea simply and effectively. The phrase resonated with everyday people, making it a popular slogan for conservative investment products.
From Ad Copy to Celebrity Wisdom
While the phrase began in advertising, it gained significant cultural weight through a celebrity endorsement born from painful experience. The most credible connection is to the entertainer Eddie Cantor. He learned this financial lesson the hard way during the devastating stock market crash of 1929.
Cantor reportedly lost his entire fortune, a staggering sum at the time. This personal financial catastrophe gave him a unique and authentic perspective on risk. In interviews following the crash, he shared his newfound wisdom. In 1933, he famously stated he learned to “worry about the return of my money instead of the return on my money.” Cantor’s genuine story transformed the phrase from a clever slogan into a hard-earned piece of advice.
The Myth of Other Authors
The attributions to other figures, like Will Rogers, are far less certain. The first link to Rogers appeared in 1938, three years after his death. This posthumous credit makes it highly unlikely he ever said it. The connection to Benjamin Franklin is even more improbable. Franklin died in 1790, over a century before the phrase first appeared in print. These attributions were likely created by advertisers who wanted to borrow the credibility of respected historical figures.
Why This Advice Still Matters Today
The principle of prioritizing Risk Management – Investor.gov remains incredibly relevant in modern financial markets. Volatility, economic uncertainty, and complex new investment products make this timeless advice more important than ever.
First, it champions disciplined risk management. Every investment carries some level of risk. By focusing on the return of your money, you naturally become more selective and cautious. This mindset encourages thorough due diligence. It also pushes you to understand exactly where your money is going and what dangers it might face.
Additionally, this philosophy is crucial for investors at different life stages. A young investor with a long time horizon can afford to take more risks, focusing more on the return on their money. However, for someone nearing retirement, the priority shifts dramatically. An individual in their 60s cannot easily recover from a major loss of capital. Therefore, protecting their principal becomes paramount.
Finally, embracing this mindset helps you avoid speculative bubbles and emotional decision-making. The fear of missing out (FOMO) can lead investors to chase trendy but unstable assets. By grounding your strategy in Risk and Return – Investor.gov, you build a more resilient and sustainable portfolio. It is a defense against hype and a commitment to sound, long-term financial health.