Advice for the Young
- Invest monthly It’s called Dollar Cost Averaging and it will increase your investment returns. It makes market volatility work for you; your monthly investment will buy more shares when prices are down and fewer when prices are up. Start with $100 per month, then double it to $200, then double it to $400; after that make it your goal to invest 10% of your income, monthly.
- Start early If you want to retire at age 60 with one million dollars you will need to invest $300 per month if you start at age 25, but $1,400 if you start at age 40. That means you’ll invest a total of $336,000 if you start at age 40, but only $126,000 if you start at age 25. So, start early and you won’t have to invest as much, leaving more money for other spending. (assuming a 10% investment return)
- Spend less on things and more on experiences Want more money, and more happiness? Believe this truism: things don’t make you happy, experiences do, especially experiences with people. So, spend less on house, cars, and clothes, and more on activities, travel, and meals with family and friends. Not only do experiences bring more happiness, but they cost less too, leaving you with more money.
- Be careful with debt Since an experiential lifestyle is more affordable than a materialistic one you won’t need to borrow as much. And that’s a good thing. Debt can sap your income and rob you of financial freedom. As you go through life you’ll notice many people are trapped in such misery. So be careful with debt.
- Career advice Start with a liberal arts degree. Success in our new world demands strong thinking skills. Then major in a field appropriate for your skills and interests (consider cybersecurity; it’s a huge growth industry). And learn to speak Mandarin; start immediately; master the new bilingualism and doors will open for you.
It’s worth thinking about:
If you do #s 2,3&4, start early, focus your spending on experiences, especially experiences with people, and borrow less, you will have more money to do #1, invest monthly, and to enjoy as you please…and you will be happier. Trust this formula. Use it as your guide.
More money and more happiness!
This memo was prepared solely by Terry and Patty Rempel who are registered representatives of FundEX (a member of the Mutual Funds Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this memo are those of Terry and Patty Rempel. Bluestone Financial is a personal trade name of Terry and Patty Rempel.