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Investment Guide for Young People

There is more to "investing" than buying the right stock or mutual fund. The foundation for investing is a right livelihood.

You don't want to end up 36 years old and divorced (as happened to me), out on the street without a job and without a skill (as has happened to many others), unable to support yourself, dying from cancer for having eaten the wrong diet, or persisted in using the wrong carcinogenic products for a lifetime...

There is a wide variety of age ranges on the Daily Paul. We are not naturally arranged that way in our society. In school, we are segregated by "grade." In the 'workforce' we tend to adhere to those ageist imprints that we received in childhood during our government sponsored indoctrination period. There is little cross-pollination among the age groups “out there.” In here, it is a little different.

What can we share with each other? What can those of us who are "older" offer to those of us here who are "younger?”

If you were to go back in time 20 years, and meet yourself - what kind of advice would you give yourself? And not just financial advice. The greatest investments are ultimately how we choose to live our lives.

But let me add this twist: Don’t just think of yourself 20 years ago (which is easy), but as if you were 20 years younger in today’s environment, with all the complications of modern life: The hyper-competitiveness, the digital overload, facebook, the logjam at the top, the oppressive security state, and the moral decline of society. What choices would you make if you were a young person today?

What turning points do you remember? What would you do differently? What are you glad you never changed, or compromised on? What would you go back and do over again if you could?

Back in 1990, and I had just graduated from college and was living in Japan, teaching English. It was a good gig. Back then, there was no Facebook. There was no email. There was no skype. I called home once a month, and it cost me $30 for about 10 minutes of time on a public phone. Things were different back then, and if I had to choose one word to describe them, the word I would choose would be slower.

So what advice would you give to young people in our fast-paced world?

Equally, for our members here of the younger generation, what questions do you have? Those of you just graduating, and those of you in the early years of "the workforce," what kind of guidance (if any) can we give. What are the particular challenges that you're facing?

Let’s get a conversation going and see what we can learn from each other.



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All of my friends that wear suncream have

a face full of age spots.

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

LOL!

As soon as I read it, I actually giggled outloud! http://www.youtube.com/watch?v=bwVVpwBKUp0

CHECK OUT MY VIDEO! The views stopped overnight when for 'copyright' reasons, mobile viewing was disabled. I want to get to 8,000 - HELP by watching: http://www.youtube.com/watch?v=I-pTvjzHN3I

Some book reccos

Here are a few books I would advise for Economics and Investing

Economics

1. Man,Economy, and State------Murray Rothbard
2. Economic Thought before Adam Smith---------Murray Rothbard
3. Money, Bank Credit, and Economic cycles-------Jesus de Soto
4. Conquer the Crash---Robert Prechter
5. Socionomics : The Science of History and Social Prediction---Robert Prechter

Investing

1. Rich Dad Poor Dad----The entire Rich dad collection --all books
2. Peter Lynch--One Up On Wall Street
3. The Ultimate Dividend Investor--Morningstar
4. Jim Cramer---Real money.
5. Kaplan MBA Fundamentals : Accounting and Finance.

Some book recommendations

Peter Schiff's Books

1. "How and Economy Grows and Why it crashes" for a nice really simple primer on Austrian economics (story of 3 guys on a desert island). Appropriate for bright 10 year olds to adults.
2. "Crash Proof 2.0" for an overview of today's economy.
3. "The Real Crash" for policy recommendations.

I think the first 2 are better books than the 3rd, because I think Peter Schiff is an incredibly great economic communicator, but only a great policy wonk.

How An Economy Grows and Why It Crashes

Is ESSENTIAL to understanding econmics, money, wealth and production. My son read it at age 11, and loved it. He wants to re-read it. My Dad (70+ years) and several friends (40s and 50s) learned a lot also.

Don't forget Mike Maloney,

Don't forget Mike Maloney, Jim Sinclair and Ron Paul. :)

have fun!

If you aren't having fun, start thinking about doing something different.

That is my advice to myself. Everyone is different and fun might not mean anything to someone else. The important thing is listening to yourself and being true to what makes you tick.

As per financial advice...I am probably not the one to ask. What I have been good at is getting by. In good times always remember to create a buffer for bad times. There will be bad times. It is easy to forget that in a boom. Hopefully all of you will experience better times than now. I did buy gold when it was at $200 which was sure helpful....but didn't buy near enough!!

This leads me to common sense. Use it!! And listen to your gut instinct, it is usually right.

Plan Your Retirement...

Young or old... You must have a plan... You don't have to be a millionaire you just have to "learn" and "copy" what millionaires do...

Knowing the process the rich have used to amass their wealth is your first step...

This may assist you in your thought process and planning:

http://acquirewealth.org

best wishes...

http://youtu.be/hrnND0iTfjo (Knowledge is Freedom)
http://donttreadonliberty.org (Knowledge is Freedom)

jrd3820's picture

Learn to Laugh

Once you can do that everything else falls in place. Really, there are very few things in this world that are not funny if you really think hard about it, if you can laugh at it; you win.

**Disclaimer** I am young. So maybe my advice is not wise, follow at your own risk.

I have no financial investment advice because I really only ever pay attention to my own $ and what is good for me financially might not be good for others.

Oh yeah, for the college students; do not go into debt for school. You can do it without loans if you keep your grades up.

http://www.scholarships.net/
http://www.fastweb.com/
http://www.cappex.com/

“I like nonsense, it wakes up the brain cells. Fantasy is a necessary ingredient in living.”
― Dr. Seuss

Good advise. My advise to you:

Don't forget how to laugh. As you get older and are faced with different pressures, responsibilities and adversities, don't forget that it's still funny. Seems simple, but sometimes the ego can make you forget.

Some ideas

Two things you might want to consider doing. Having savings and having cash flow.

Cash flow can be anything - from running a successful business to asking for it (kickstarter). Either way you want the cash to flow. Continuously. Without having to do much effort. This will keep you making money and fast. Having a job or running a self employer isn't cash flow - once you stop working so does the cash flow. So, you can rent something out, have someone in debt to you that pays you interest, receive royalties to something you did creative. The cash flow shouldn't stop and that is the idea.

You can rent out all kinds of things. Cars, houses, tools... even shares (option trading). Holding investments is fine for making cash but it's not cash flow. So rent them out if you can. You can still own them this way. Don't just hold stock, 'rent' it out. Don't just hold an investment property - lease it out. If you're not leasing out you're doing it wrong.

Having your own business that runs itself is good too. If you can have multiples of these not only are you employing lots of people and providing the community with jobs but the more you have the more cash flow to you.

___

The other thing is savings. Have what you have saved in a variety of investments. Own silver and gold, because they can't be forged, manufactured (from anything other than the element itself), destroyed (unless you go Goldfinger on it and make it radioactive), counterfeited and so on. To devalue it they are going to have to mine more of it and that isn't cost affective for them to do.

Buy some land, commercial and private. Create a business that runs itself that holds value. And so on. Diversify. Buy some art, antiques, collectables - anything that another person considers valuable and will want even in the worst of times.

Lastly none of this will be of any use to you unless you can have self discipline. Looking sharp isn't the same as being wealthy. Be wise with your money, you don't have to prove to everyone how rich you are by buying a suit. They'll respect you even in rags when you're filthy rich. Not that you want to impress them anyway. You're above that.

With silver and gold range

With silver and gold range bound for the last few years, we are likely working off overbought conditions through time. Silver and gold are most likely trying to bore investors to death before they make the next move higher. But that doesn't mean you can't generate some income. I've been working out a strategy to essentially get "free" physical by using the volatility of options on the SLV etf.

You buy in the money LEAPS, Jan 2015 $30's for example and then when silver goes towards the top of the range you sell weekly options (covered write/call) that are near the money or right in the money against the deeper in the money LEAPS.

Hopefully your weeklies expire worthless (if silver goes towards the bottom of the range) and you collect the premium from the options contract. You can take that premium from the options contract and go buy physical.

If silver spikes then your LEAPS get called away and you still rake in a nice profit plus you get to keep the premium from the weekly options contract.

Rinse and repeat, as silver moves to the peak and trough of the range on its chart.

You can essentially use their derivatives ponzi scheme to get some free silver. Comments welcome.

A penny saved..

is a penny earned.

...

Agreed, this is a marathon not a sprint.

Michael Nystrom's picture

To that end...

learn to cook! And know what to eat, (and not to eat). Hint: Stay away from the wheat

He's the man.

recently converted to primal (mostly) eating

I began cutting WAY back on grains about 10 months ago (about 90% eliminated from my diet). I will still eat a cookie or piece of pie on a special occasion, or indulge in a grilleld ham and cheese every couple of months. I do not miss pasta, rarely miss bread, cereal was hard to give up but has been replaced with other fun stuff. I have always been fairly slender, but my layer of "squish" (most women use pregnancy as an excuse for) has all but melted away, and I feel great. No more indigestion or intestinal discomfort!
Check out www.marksdailyapple.com for more information. Well researched and science based, this is a way of life, not a temporary "diet."

Very interesting book, think

Very interesting book, think I'm going to purchase it. Have been cooking for myself for years (only non-processed foods) but I do make a lot of bread and pizza. I've been using organic wheat flour, I've always wanted to try spelt flour because it is supposed to be more alike to the wheat of old instead of the GMO crap we have today. Do you know if spelt flour is a viable alternative to wheat flour?

Music has always been my

Music has always been my passion. I played piano since early childhood, and was surrounded by musicians in my family. I had a lot going for me at a young age, but a lot changed when my parents split. I'm not here to write a sob story, but it did affect my emotional state and decision making through middle school and high school. Without any real guidance from my parents, I let the public school system get to me. Basically following my passion was not smart they told me. Something practical like the sciences or business was a far more prudent approach to starting a career, such a stock response from counselors and teachers. To make a long story short...I started studying business after high school while teaching piano on the side to pay for tuition never realizing it was piano that was making me happy not business. I took a couple jobs in sales and was never more miserable. One day I decided to take a leap of faith and start teaching full time. I now have close to 40 students, and perform on the side. This life choice led to the meeting of another musician who is now my fiancé. She teaches as well. To sum things up....follow your passion. I credit Ron Paul for introducing me to liberty and the philosophy of self determination. If I had joined the collective, who knows where I would be right now. I truly believe the universe will make a path for you if you put yourself out there, believe in yourself and dedicate yourself to your craft. It takes a leap of faith, but you'll be better for it.

I gotta be honest if I could

I gotta be honest if I could talk to myself 20 years ago it would have nothing to do with investing. I would show him how to get more women in high school...

Michael Nystrom's picture

And how would that help you now?

You might be saddled down with crushing child support payments, LOL!

Which brings to mind this tip: Always be protected.

He's the man.

My #1 tip

Good point MN, which leads me to my #1 tip-

Choosing your mate is the most important choice you will make in your life- "But choose wisely, for while the true Grail will bring you life, the false Grail will take it from you."

The founders would be ashamed at us for what we are putting up with.

From the school of hard knocks

Some good suggestions offered by others so far. I go along with the advice to stay focused first on what is important, your body, mind and spirit. If all else fails, you have a strong foundation to survive. As for the ‘how to’ of investing itself, I have learned ten basic principles through my own school of hard knocks. One learns a lot about themselves through trial and error and some of the principles I learned I apply in my personal life as well providing a blueprint of sorts rather than an ad hoc unplanned approach.

1) Know your own personality disposition. Would you prefer dealing with people which is a requisite for being a hands on landlord, or are you less a people person and more oriented toward mathematical modeling,charts and deciphering economic tea leaves studying and mastering financial market trends? Also real estate is more
buy and hold and illiquid as the longer term investment vs. stocks which may fit someone more inclined to seek speedier gratification. Some manage to do both. I have done both but get more enjoyment from the latter.

2)The old axiom ‘buy low, sell high.’ Now is a better time to buy real estate than when it was going sky high prior to 2006. If you avoid rushing to buy when everyone else is doing the same thing, you will be a contrarian investor which is often the best place to be. Ron Paul was buying gold when it wasn’t yet fully on the radar, and he has done very well.

3)Avoid automatically buying the hype professionals may give instead relying on your own research and assessments. No one will be better at managing risk than you if you stay informed and involved. If someone is trying to sell you something and they are making commissions or fees from that, they may not disclose to you everything you need to know. Research and verify everything someone tells you. Try not to stay locked into any kind of advisory situation where you feel obligated to deal with just one person. I am upfront about telling anyone I use (real estate broker, stock broker, certified financial planner etc.) it is my style not to rely on any one person, and I like to make my own decisions. This gives me flexibility to do what I want, the ability to cross check information, and a ‘try harder’ effort from them knowing they are competing for my business.

4) Have patience. Generally you get a second chance. If you miss an opportunity, don’t sit around and fret as you will get another chance. Nothing ascends upward forever as we have witnessed with real estate. Gold has been in a correction and consolidation mode for over a year. Sitting and waiting something out is sometimes better than acting upon the compulsion that you must do something right away.

5)Stay disciplined. Try to set profit goals, and don’t get greedy. The best stock traders set their goals and sell when their targets are reached instead of waiting for the price to go to the moon; setting sell stops and cutting losses keeps you from holding onto losers. Doing this helps build a cushion insulating you from devastating losses that are hard to recover.

6) Consider your age and accompanying risk exposure. I am amazed at the level of risk some of my friends take on. If you lose $1,000 in stocks, you have to make that up with a 100% return just to break even. That is a taller order than many appreciate. At 20 years of age, you have more years to make up a $1,000 loss than if you are 40 or 60 years old or retired.

7) Dollar cost average. Spread your investments out on some kind of regular schedule, monthly, bi-monthly, quarterly etc.; avoiding going full hog all at once saves the heartache of buying at the wrong time. Having a frugal mindset via saving and less spending encourages you to also exercise prudence in what you buy and when you buy it.

8) Don’t fall so in love with something, you can’t sell it. Anyone who bought gold at $600, sold it at $1900 and bought back again at $1500 is cutting his risk to a $200 loss vs. $600. The smartest pros take their profits when they can (as in point 5) and don’t get
so enamored or locked into something, they can’t see pitfalls coming.

9) Luck and timing may reward you or do the opposite, but if you don’t take anything for granted and work hard to refine your own investment skills, you can take great satisfaction in learning about yourself and growing in the process. I got out of day trading after 5 years right before the dot.com bubble burst, and that was sheer luck. However, the charting skills I had acquired came in handy later when hedge fund managers started to affect market swings and an investor had to know technical skills to cope with the volatility.

10) Diversify and don’t put all your eggs into one basket and always keep enough cash available to buy something when the ‘buy low’ opportunity arises. (#7 will help keep funds available).

People who eschew any or all of the above tend to leave the responsibility to someone else (their stock broker, certified financial planner etc.). The more responsibility you can accept, the higher your personal reward will be that you are in control of your life and your future at a time when so much uncertainty threatens to upset our lives and our apple carts.

There are all kinds of projections out there on gold and silver. I check the www.kitco.com site daily for prices and articles.
Good luck on your new adventures and investment challenges! I hope it is as exciting and fun as what I experienced.

Trends and Other Things

Be aware of current trends and read and follow the Trends Journal and Gerald Celente. I find that he is on the mark for the most part and not missing many points in his analysis. I will then look for stocks that are involved in or connected to a particular trend and work the analysis of where they might be going in the near future.

Secondly, I never carry less than a couple of $20 dollar bills and I never spend less than a $20 bill on any item. For example, if I buy a $1.45 item I tender a $20. The entire amount of change from such a purchase is put into my big plastic jar that I've had for many years. When I get enough saved up, and this happens quite quickly, I send a check to my brokerage and invest additional sums in the stocks I have that are doing well and for any stocks that I think will do well from the trend analysis.

Invest in gold and silver as you can. Buy/trade for junk gold and silver.

Dumpster dive. I done this in the past (too old now) and have walked away with some very good furniture and other things of value that I eventually sold. I never found that million dollar lost painting though. Some ardent fans of the practice make a fairly good living collecting and selling steel, aluminum, copper and other items they find by the road side the day before trash collection day. It's amazing the "trash" people get rid of that has significant, payable cash value.

This has worked for me, it may work for you, too.

Save More - Consume Less

Save More - Consume Less

only an addition

share more and you will consumer less

I like this comment (a lot

I like this comment (a lot because it is so simple yet important) I would just like to add I recommend saving in something that holds value like silver or gold rather than just stuffing money under the mattress. If you just save money ($) it will lose value over time due to inflation.

Liberty Permaculture Farms

Books by Daniel Quinn, Kurt Vonnegut, Henry D Thoreau, Ayn Rand, and Terence Mckenna filled an intellectual void that was always present thanks to modern industrial collectivist culture. The Ron Paul experience has been exponentially interesting. I have mastered percussion, an art form I love but cannot make a living doing so I am learning another art form that I feel is more useful- permaculture. It was my opinion that living off grid on a farm and incorporating permaculture was the right thing to do. It's been a year since I began and I feel good about it.

At 26, my only regret is that I did not grasp my philosophical and intellectual preferences sooner. I would have apples and figs by now. When the food is under lock and key, permaculture is liberty.

My only advice is to enjoy yourself and as many other people, plants, animals, ideas, philosophies, and concepts as you can.

Thank you Michael for this thread and for hosting this gathering of intelligent minds called the Daily Paul.

I'm studying network engineering

I figure that the internet will never "get old," and someone will always need people to upkeep rheir servers. Still thinking of a backup plan, possibly business management.

Life is about much more than

Life is about much more than dollars and cents. As I learned from the LiberyClassroom.com lecture by Brion McClanahan on the Cavalier Culture that founded Virginia, men took care of their "country" first, their "country" being their plantations, their homes, their families. Next, you took care of your county. Next, your state. And finally, the federal government, which existed for only limited enumerated reasons(a laugh now).

Find a moral philosophy, study it, practice it. Whether religion, or something else.

Take care of your body, exercise, eat healthy. This is the best way to achieve a sound mind.

Visit websites like DailyPaul.com everyday, as well as LewRockwell.com. Both have news, but so much more.

Remember, the only thing in this life you can control is yourself.

Also, remember the wisest man knows how little he knows.

Finally: "Do you want to know who you are? Don't ask. Act! Action will delineate and define you." -Thomas Jefferson