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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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Don't listen when they tell you your idea is a bad one.

When you get a breakthrough idea there's a good chance it's your own family that will tell you you are crazy. However if you succeed they will be the first ones there slapping you on the back, telling you they "always knew you were gonna be the one" and how they always believed in you.

Advice is something we ask for when we know what the right thing to do it, we just wish we didn't.

Most people don't know what faith is but they are expert at prayerfully considering their options.

Love isn't a reward so much as it's a sacrifice.

Make peace with your past as soon as you can and you will have more time for your future.

Never compare yourself to any living man (or woman I guess in the interests of gender parity). Some will always have more, some will always have less but the challenge will always be to be happy with who you are.

Preserve your honour at all costs especially in times of wealth. Money is spent and quickly leaves us. Everything we have can be taken, even those we love more than life itself. And that's when you really really really need your honour.

Business partnerships are very much like marriages. Perhaps that's why they tend to destroy each other. A good partnership contract has pretty much everything a good prenup has and more.

Most of those who think so actually don't and most of those who think sew actually rip.

Understand "intrinsic value"

There are a few real NEEDS in life, most things are wants.
You need to eat - buy land and learn to raise food. Even if you don't have a big garden, at least grow a few things so you know HOW to garden - and have a supply of seeds always.
You need water - if you are connected to a city service, you are at their mercy. Have your OWN water supply.
You need air. Currently our atmosphere is being polluted, invest in the knowledge to cleanse yourself of the toxins in the air.
Beyond that, you are headed for "want" territory, so investments here are often where people get spend happy. If you drink coffee, invest in a bunch of green coffee beans and put them up. They keep forever, you will always have your coffee, and if SHTF you have barter "currency" that will bring a premium. Same for chocolate and tobacco.
I will put in a pitch for silver. Colloidal silver is easy to make, and can save lives in hard times. Have at least enough pure silver to make your own. Anything else you can afford to buy is silver that the war machine can't use.
Most importantly, invest in TIME with your FAMILY.

Love or fear? Choose again with every breath.

The Next Big Short...

If you haven't already read "The Big Short" by Michael Lewis, which covers rise and collapse of the housing credit bubble, I strongly recommend it. It is a very good read and it will be time profitably spent. Looking forward, I predict the next big short will be the collapse of the $1 trillion student loan bubble. Students are burdened with 3 and 4 times the debt they carried 10 to 20 years ago and when they graduate there are not enough jobs available, so the model is clearly broken and consequently tuitions will have to come down. Young parents with young children should look into higher education possibilities that are now emerging on the internet. Steve Forbes commented Saturday on FOX that the same knowledge and information one acquires with a typical college education can be had for about $1,000 a year on the internet, Keep an eye on the rise of Virtual U.

Ed Rombach

Michael Nystrom's picture

Ed, I've got that book. It is on my list to read.

The virtual U is going to be a huge, disruptive trend.

Can you imagine what happens to the Boston economy when Harvard, MIT, Tufts, North Eastern, BU, BC, and about 100 other schools are rendered obsolete?

Higher Education Heading Lower

I wish I could buy put options on universities including my own alma mater, Boston College. I used to contribute to it until I realized that I was already contributing to BC through government subsidies. Why feed the beast? Maybe they will go public and issue IPOs like the investment banks did. It would be a sure sign of a top in the student loan market.

Ed Rombach

Think for Yourself. Question Authority...

One of the greatest things you can ever possibly begin to do for yourself is to use reason and logic to guide your decision-making process, and steer clear of making decisions based on things like emotion, religion, or dogma.

Learn, Always! Never think that you know everything, or that you know enough to make informed choices... there is ALWAYS room for learning.

Learn to do something valuable with you own 2 hands. I know people who earned a degree, and now are unable to do anything with it. Yet i can go anywhere in the country, probably in the world, and as long as i have some tools i can produce for myself. Short of a grid down scenario, there will always be work for electricians.... and during a grid-down collapse the need for people who can assemble off-grid systems will be even more valuable. The point is I determine my own future. I am not dependent on some corporation or on the government for a GD thing.

Live life on your own terms. Who gives a f*ck what anyone else thinks? I mean really, are they having to deal with your issues? Do what you want.

You only have today, so don't waste it. Tomorrow it'll be gone. enjoy this chance to be alive and breathing.

You are the embodiment of the universe acting out the second law of thermodynamics.... and the universe couldn't be wrong.

Think for yourself......Question authority...

Bitcoins are worthless

Here's some advice- you can't get something for nothing so don't waste your time with Bitcoin.

If you actually look at how complicated Bitcoins are to use, even for a simple transaction, you'll understand that it will never leave the fringes of adoption.

Bitcoin mining involves a large amount of CPU/GPU power for very little in return on a personal computer. Maybe if you own servers and don't pay the electricity bill you can profit from Bitcoin mining.

Furthermore, the value is very volatile. In early 2011, they were worth less than a dollar. By June they were worth upwards of $30. By the end of 2011 they were back under $4. Today they are around $20.

I would stay away. I think the dollar is in terrible shape. Electronic currencies do have a future. Bitcoin is not the answer. Buy gold. Buy silver. Rand 2016.

Not wanting to take away

Not wanting to take away anything from gold and silver.

But Bitcoin looks like a very interesting currency for global commerce.. Both a currency and payment network in one too!


"If you actually look at how complicated Bitcoins are to use, even for a simple transaction, you'll understand that it will never leave the fringes of adoption."

I"m not involved in Bitcoin myself, following if from the sidelines at the moment.

BUT, systems to make transactions easy are being developed at a high rate.

Check this example. *Bleep*, *bleep* and done!

BitPay mobile checkout: https://www.youtube.com/watch?v=YZ-pqo0cLcE

Or this vending machine:


With all the growing amount of brainpower behind Bitcoin, the [open source] market will make and keep things easy, secure, fast

Yet another fiat

Hasn't history repeated itself enough times? The simple fact is that fiat currencies don't work. No offense, but only a Keynesian would advocate replacing one fiat (USD) with another (bitcoin). Bitcoins are backed by nothing and therefore intrinsically worth nothing.

If you want to use bitcoins as a medium of exchange, fine. But as a store of wealth, I'll stick with real, hard assets, such as gold, silver, land, commodities, etc... thank you very much.

Exactly, Bitcoin as a medium

Exactly, Bitcoin as a medium for exchange, hard assets to store wealth. :)


Don't borrow any money.

Michael Nystrom's picture

I would make a distinction between good & bad debt

Debt for consumption - bad. Very bad.

Debt for investment - consider the investment very carefully. One has to take some risks in this world.

I'm fairly young

and I'm choosing to invest in myself.

By learning how to grow my own food.
By learning how to generate my own electricity.
By learning how to read between the lines.
By learning how to properly use and maintain firearms.
By learning how to do jobs that others can't/won't do.
By learning how to "pick" antiques from yard and estate sales.
By learning how to use 3D modeling/printing to make the things I want.
By learning how to engage in local politics.
By learning how to communicate my ideas with others in a more palatable manner.
By learning how to pass my knowledge on to others to help where and when I'm able.

It's going to be a lifelong process, and I'm very much looking forward to it.

A signature used to be here!

What Say You Add

affordable, nature friendly, fun housing?


If I was your age I would be doing the same. Actually, I am older and doing the same. You are right on track young one! Don't let anyone trick you into bad investments, etc. They will try. The best investment you can make is to keep thinking like you are thinking!



That too! Great advice.

I just started looking into cob/tabby housing a few weeks ago, since a DPer (might've been you, even) brought it up.

Trouble is, I'm going to have to get more land before I do any of that...though at least It'll give me have plenty of time to figure out what the heck I'm doing.

Then again, maybe I can practice by building a few cob sheds or something that I can maybe make a few bucks on/trade.

A signature used to be here!


Also I forgot to mention everyone interested in investing should purchase memberships into different investment newsletters such as The Motley Fool, Zacks Investment services, StreetAuthority.com, The ValueLine Investment Survey, etc......

It is not so much for the newsletters but for the community of investors and different views and opinions you get from each person. You should also join the free investing community website SeekingAlpha.com

Yeah Right

Motley Fool was great at first, then let me down big time. No go. thanks.



The newsletter itself does not impress very much. They usually get 2 or 3 picks that are home runs and the rest are so so. I like it mainly for the access to forums and discussions with other investors, but using the free site SeekingALpha.com is better.

i'm not a big fan of 'different views'..

because everyone dips at different depth and not all opinion is equal, but when someone just says it, you have no idea how much thinking he has done, and the subliminal impact on your own thinking with unfiltered sharing can be quite negative. deep thinkers should actually be reluctant to share their opinions because they are the results of hard work, or even more so--reluctant to hear other people unload their shallow thoughts on self. it is precisely those who haven't put in enough to feel that reluctance becoming the ones that want to 'share' and 'exchange' all the time, and in fact they are the ones easily influenced too, perfect circle.

i always treat my view as being "the view" and until something dawns on me, i may begin another process of critical thinking, the process itself actually becomes more important than your advancing conclusions because you learn how to manage the process and you get better at the market senses 'i am sure i am right this time'. with hearing what others say all the time, you don't nurture that cerebral process at all. it's like self discipline in a way, unless you do it yourself, you won't know what i'm talking about.

Interesting comment,

Interesting comment, jtstellar, but why should thinkers be reluctant to share their opinions? I read what you said, of course, but wouldn't the person who has formulated his thoughts benefit who listens to him?

If you don't mind, expound your "...until something dawns on me, I might begin another process of thinking...." Do you mean you'll think about X, trying to understand how it came to be, thereby allow it to inform you how it is, then you will add or subtract a factor in how it came to be to see if it draws the same conclusion for you, then think about Y and see if its path and conclusion is as X's? In short, all what I said there is the process recognition. Do you agree with me there, that what I described is recognition?

I agree with you on not listening all the time to what people say. There is a point where enough is reached and that what's after it is clutter. Additionally, I recommend listening to and reading no one on important matters until the person who would listen or read knows how to think. "How to think," a process, needn't be done in exclusion to listening and reading. This process can be done during reception but the receiver must question what he hears to understand it alone then compare it to what he knows about the subject to understand his thoughts on the subject. This comparison should lead him to modify his conclusions if need be and to locate faults in his thinking that led him to his conclusions if need be. By the way, I dislike the phrase how to think because there is no such thing as "how to think." There is thinking and there is rote. I said how to think merely to differentiate between thinking, a process, and rote, a nonprocess.

Returning to the more-than-enough commentary, I turn to the topic of gold and silver are money (intrinsically) and that their use or backing will restore the United States. (Restore here consists of substance such as behavior, not only things transient, fleeting and ephemeral such as more money in the bank or a new car.) I can't roll my eyes on the gold-silver topic enough. No, on second thought I can roll them enough.

Your comment is thoughtful and intelligent, jtsteller. Thank you for it.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.


Whatever. Oh dear, I didn't think deeply about that before posting. I guess I am not good at "The View" Whatever THAT means. hahahaha


Excellent Topic

I've got two sons and a daughter. My sons, at least, have been asking me investment questions now that they are in the workforce and making a few shekels. Despite my years of study into the matter, it's tough to give them easy answers. So this is very timely topic for me.

Used to be the easy answers were obvious (pardon the Old School here):
- Pay yourself first - 10% after tax, rule of thumb.
- Stick that money in a passbook savings account (PSA) and don't touch it.
- Create an emergency fund so that you don't violate the above rule.
- Get a steady, pension paying job (that only applies to unions and government types - and the former are dwindlng) with a good firm.

Later on this became:
- Set up a 401K
- Save and get your employer matching
- Put your savings in the US stock market. Over the long haul, it always goes up. This is as good or better than the PSA.
- Or, buy munis. They're tax free income.

Oh, that didn't work? How about:
- Flip houses. Buy low, sell high - with a very short turnaround window.

You can see, the Fed has hosed nearly all these options, although they're trying like hell to prop up the stock market. The Fed screwed that pooch for most of us poor schlubs who went thru the dot.com bubble and the housing bubble and next the bond bubble.

Lately it's become:
- Try being a day trader
- Trade currencies on Forex
- Use the equity in your home as a credit card - take out a home equity loan.

That is, the only way to make money is within a terribyly short term window since the long term has been completely hosed by the central banks.

None of those things make sense anymore, or don't seem to. So why not run up the credit cards? Live high while you can...

The only thing I do tell them now is: own your own company. At least, try to. That is the only way, it seems, to make any real improvement in your quality of life. Earn the income, spend all you can and find a way to call it 'business expenses' and pay taxes on whatever's left. vs. as an employee - earn the income, let the gunvernment take as much as they can, and spend whatever is left over, whatever that is. Seems like the first pile is bigger.

yeah, that sums it up

the only thing I will say is that I think it is still important to save an emergency fund....enough to pay all the basics for 6 months out.

My advice.

Having Just turned 30 I can give a little advice to the youth of the DailyPaul. My first piece of advice is to learn about economics and economic history. This is the first step you need before learning how to invest in anything because it teaches you the macro view of the whole world and how it really works. Studying the entirety of economic history makes you able to spot trends that have happened in the past such as when markets are in bubble mode, when to buy and sell. etc...

Once you have a good grasp of different schools of economic thought and economic history move on to studying investing. Start by dividing it into 3 branches. 1. Stock and Bond investing.2 Real estate Investing. 3. Starting your own business. Spend about 6 -9 months studying each branch until you have a decent grasp of it, then decide which one you'd like to specialize in and learn more. Grab every book on the subject you can once you have decided and dig in for a year. After a 3-4 year period of studying economics and investing start doing it in real life and enjoy the benefits of knowing you can create a life for yourself outside of being an employment slave like every other cubicle drone American.

I still work a regular job, in fact I work two jobs rights now 60+ hours a week, but I also make passive investment money from a shared commercial property and from stock dividend checks. Once you start getting checks in the mail for simply investing and never having to go anywhere you learn the power of money and the feeling of self empowerment. I believe investing is for everyone, but you should spend a couple years studying before jumping in or you will get burned.

pay attention to econ

as in politics/finance, the big stuff not the keynesian college econ.. nurture investing capabilities and an eye for the market. i see no big need to get any kind of hands on skill right now, as the economy will look very different after the crash, because a lot of new industries will arise from that. there may be some overlap with whatever salary job skill you are able to get, but you're never going to out pace someone who grows up under the new economy and has hands on experience with all the new stuff then from scratch. might as well focus on the big and never-changing, a sense of market timing, finance and politics.

Phxarcher87's picture

I would

If you were to go back in time 20 years, and meet yourself - what kind of advice would you give yourself?

Don't be somebody or something you are not, be true to yourself and yourself will remain true. Find conclusions on your own don't let people figure things out and decide for you. Be receptive and open and always have an ear dedicated to truth with a brain that never stops learning. Realize your time on this complex planet is limited and sleep less and do more, run fast and don't be afraid to bleed. Love more than judge, seek to understand the opponent and embrace a fallen world. Be slow to speak and quick to help others. Build a wall around your heart and make it impenetrable to the enemy.

James Madison


Worst investment decision I ever made. Even though it was a state university and I didn't end up with massive amounts of debt, the opportunity cost of wasting 3.5 years getting two degrees (CS and Econ) was huge. The only thing I learned was how much alcohol my body could tolerate.

Sure, I had a job ready for me once I graduated, but I firmly believe that had I not gone to college and started my own business, I would be much better off, and happier. Coincidentally, 10 years later, that's the path I'm taking.

For those of you who are still in HS and considering college, stop and think for a moment why is it that you're considering it. Is it because that's what your parents want? Is it because you've been brainwashed told that's what everyone does? If everyone jumped off a cliff, would you do it? Unless your future plans require a post-graduate degree (e.g. MD, DVM, lawyer, etc...), then think twice about running off and potentially being saddled with ungodly amounts of debt for the foreseeable future.

For those of you who are still in college, it's not too late. You can still evaluate your options and limit the amount of debt you'll accumulate. The fact of the matter is that most people shouldn't even be in college considering the quality of graduates that these universities are pumping out (not necessarily to the fault of the student).

Regardless of what people say, a college degree is not a requirement to lead a happy and successful life (and money doesn't equal success).

Absolutely agree. I did what

Absolutely agree. I did what my parents wanted, went to college right out of high school with no idea of what I wanted to do. Earned a BA in broadcast media and got a job right out of college at a tv station. I liked what I did but didn't really think about things like how your life doesn't get better as you become more successful in it. Where are your most successful live anchors during primetime for example? At work. If you want family, it's hard to work those hours or in that type of environment because you might not see your family often. I did what you mentioned, I did not run off to get a post-graduate degree because I worked at a major affiliate television station for 3 years and that decision of NOT going to get a post-grad degree was one of the wisest decisions I ever made. And that came with experience working in my field. I knew I would've been saddled with big debt for years and there isn't much need for a Master's or Doctorate in what I was doing. You can be successful in it without them. 25 years ago, who knew that the media would become so propagandized? I'm ashamed of the field now and wish I had majored in something more productive. I believe now that taking a few years after high school and get out and work full-time, grow a bit mentally, is probably a better decision than running straight to college. I can think of a couple of areas I would rather have gone into now but hindsight is 20/20. I am a stay-at-home mom now (started a bit late, in my 40s) and am thinking seriously about doing something different when my daughter is older. But I am finding that it would be better to wait till the economic crisis is over and done with. Kind of hard to make personal decisions with so much uncertainty.


really seriously consider why you are going to college and don't do it unless you have a clear reason.

Great Topic Mike! Can I call you Mike?!

An investment has to give back. Gold and silver are not investments; they're hedges against inflation.

A fully paid for rental property that is cash flowing rent checks every month consistently is an investment...but only as good as your tenants and your ability to manage the property.

I like small businesses as investments for young people especially. They're fun, can be started on a shoe string budget, and young people can adapt to emerging technology.

I'm want to help you make your idea become a reality...From Concept to Customer. It's a concept I've been dreaming up. I'm not an expert and this, but I am an expert and learning. And I'm sure whatever the idea is, we can figure out how to make it.

That's the kind of investment I'm into...partnering with people who think like that to make things...any thing...everything.

We've been programmed to be good students, obedient to our employers. Wouldn't it be nice to send our kids to schools based on creativity, software, design, etc.

I would advise young people to find a regular job to fund your expenses and a side project that you have passion about, and that is practical, and can be made on a small budget. Start with a small idea for practice. You don't have to save the world with your product or service, just listen for that opportunity when someone says, "Man..it'd be cool if..." Just find that need in life that is not being fulfilled. Always be on the look out for a solution to a problem. Once you perfect that business, start another small business in a different market that also interests you.

My father always said, "you don't have to make a lot of money from one place...you can make a little bit of money from a lot of places."

I'm a serial entrepreneur and liberty activist from Texas!