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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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Interesting

topic, Michael. Thought provoking. Thanks :)

Okay, I'll bite. First off if they're reading the DP they're already ahead of the curve as far as I'm concerned. They know a lot of things other people don't, like why things are happening, and even what's likely to happen in the future. That's huge because there is a chance to prepare accordingly.

You touched on another big point I really agree with which is things seeming slower years earlier. In fact I was just reading a book today written by Ian Flemming (James Bond author) where Bond gives chase to an enemy and his supercharger "digs spurs" into his Bentley's 25 horses. 25 horses. Today's motorcycles come stock with at least twice that. At the time of Ian Flemming, though, that must have been a lot.

So that leads me into the key advice I would give. To the first point, yes, it's absolutely true that there can be information overload. Things moving fast. It's easy to get caught up and confused. For that reason the first thing I would say is simply simplify. Some of this advice has already come up on the DP. In today's modern world there is so much STUFF. There is no way it can ALL be important. Obviously a lot must be frivolous, and it is. So you need to simplify. Humans need three basic things for survival, food, water, shelter. Beyond that what else is it you want? Really ponder that. Sometimes you might just sit in a silent room somewhere, perhaps turn the lights out or down so there isn't more stuff to look at taking your attention and just be for a while. Give your mind time to wander and you may find it lands on things most important to you. That's what to focus on, things that have meaning to you without all the other confusion and BS and info bombardment from external sources.

So that's the first step. You might call it centering yourself. You have to have yourself straightened out before you can effectively deal with all the BS you'll likely face in the day to day world.

Now for the investment advice. Obviously I recommend holding some gold and silver. People might remember I also post a lot advocating bitcoins. I recommend having some of those too. But there is one other thing. All those prior items have relevance mostly from the unique time period we find ourselves in now. The thing I would also advise is look for things that endure. That can be for both financial as well as mental health, so to speak. There is a saying, there is nothing new under the sun. Well, what does that mean? Find those things that don't seem to change much even with large passages of time. I'll give an example. Wine. I know pretty much zero about it, but I want to investigate it when I have the chance. Why? Because there is obviously something to it. Think of its history. It proliferates the world, the bible even. With all this modern frenzy of activity in 2013, the world hasn't forgotten about wine. Why not? What is there to it? Now, what else is like that? Find those things that endure, and you'll be on to something.

You know who invests like that? Warren Buffet. His whole strategy originally centered around finding companies he thought had a competitive advantage that would endure, not for a year or two, but potentially decades. We know how that worked out for him.

Michael Nystrom's picture

Good advice is timeless

"Simplify, simplify, simplify!" - Henry David Thoreau, 1854

Excellent advice, though I think this is the kind of advice that cannot be taught, but only learned through experience.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.

Wine, weed, tobacco?

Wine, weed, tobacco?

Cyril's picture

BUMP.

BUMP.

(tips from liberty millionaires welcome in here! ;)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

Very nice, thoughtful idea of a post of yours, Michael.

Very nice, thoughtful idea of a post of yours, Michael.

Let the good tips start flowing in, now, folks! :)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

No.7's picture

What do you think about college?

I ask because I feel like my generation has been scammed by the idea that we had to go to college to be anyone important or ever make money. I have been lectured my whole life about how important college was and how much money I would make and how much I would learn in college. I spent two years at a four year university on student loans. I got no scholarships (it's hard for a white male to get help these days) even though some girls I went to HS with were going on full scholarship although they had lower GPA's and ACT scores than me. Simply put, I'd be in school for free if I had a vagina or were a minority race but instead I owe over $30,000 for two years of school that the bank wouldn't give my parent's the loan to finish. It's crazy to me that they would give my family a loan for two years and then cut us off before I had a chance to finish the goal. I now work full time for a local eBay store and go to community college paying out of pocket.

I think I could have done much better for myself getting a job straight out of school and investing in silver. I'd have quite the collection of silver if I had started in the spring of 2009 and I wouldn't owe sally mae anything. I would also have two more years of valuable work experience.

I feel like going to college was the dumbest choice I ever made. I learned a lot in college, a lot about girls, booze, and partying. I didn't learn much about Civil Engineering except that the only jobs would be for the Government and I had to take a bunch of dumb classes irrelevant to my major that just forced me to memorize a bunch of meaningless information before I could actually learn anything.

I also found out that kissing a professor's @$$ can make or break your grade for most classes. I made a C in Literature even though I made an A on the midterm and final(the only two tests the entire semester) and it was because the teacher lowered my grade for "attendance purposes". The real reason he didn't like me was because I didn't buy the new edition of the textbook, I decided to save $150 bucks and buy the older version. I still learned the material, but I pissed off the professor he made sure my grade reflected it. Why did I have to take literature anyways? I wanted to be an engineer, where in the hell would reading Faust come in handy fixing a bridge???

Sorry for the rant but I needed to get that off my chest.
Peace

The individual who refuses to defend his rights when called by his Government, deserves to be a slave, and must be punished as an enemy of his country and friend to her foe. - Andrew Jackson

Michael Nystrom's picture

College is for credentialing, not for education

This is the most important point you need to understand. A college degree is a piece of paper that gets you in the door for certain kinds of employment. Without it, those doors will likely never open.

That being said, a college degree is important, and should be obtained as cheaply as possible. Unless you're coming from an elite school like Harvard or Yale, where you get your degree isn't that important, nor are your grades. Any good state school is perfectly fine.

So I'd say get as many AP credits as you can in high school to save money. Take your first two years at a community college to get the credits, and save money. Transfer into a state school, with in-state tuition, live at home with your parents, to save money. This is an investment. You want to get the most bang for your buck.

Don't end up like this guy. Understand what college is for: Credentialing.

The sooner you get out of college, the sooner you can start your education.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.
No.7's picture

That's a great way to look at it

"The sooner you get out of college, the sooner you can start your education."

I have to say that I've learned more from youtube lectures form Milton Friedman, Murray RothBard, Ron Paul, Peter Schiff, and Mises.org that I ever learned in college.

Like Stossel said on his show college "If you want to get an education, go to the library. If you want to get laid, go to college."

The individual who refuses to defend his rights when called by his Government, deserves to be a slave, and must be punished as an enemy of his country and friend to her foe. - Andrew Jackson

I also bought into the idea

I also bought into the idea that college was a necessity (1987). I went 4 years and the degree did help me get my foot in the door of the field I wanted but I didn't choose wisely because the work I was doing did not pay a lot (which was my fault) and even though it was fulfilling at the time, it has changed substantially since then and I'm ashamed of it (media). Both my parents wanted me and my sister to get a Bachelors. But my parents made way more money than I ever did. My father graduated from high school and flunked out of college but he made a lot of money in a factory as a foreman. My mother attended a two year college and became a registered nurse and both of them made quite a bit together. But even with them wanting us to get a degree, they didn't know how to really teach us what were good paths to take. They assumed that if you got at least a Bachelors, you'd be in the money which is not true. Because my mother was born in the late 1930s, she always heard that there were only 3 jobs women could take: teacher, secretary, or nurse. That was what she was taught. To her, breaking out of those 3 fields was an accomplishment. But she didn't have the hindsight that getting out of those professions just to say you can isn't necessarily the wisest decision. My father often didn't think he had done well because he didn't apply himself much in school but he sold himself short. He was doing well, even in a factory. And with the dollar being much more valuable 40 years ago, they were doing quite well. So another piece of advice I'd give is not just to go to college to go to college. Think about things you're good at and would like to do in life. But make sure you can make a living at it. And college isn't necessarily the only option. The one piece of advice I wish I had taken from my mother was to go ahead and get my teachers certificate while I was in college. I kept telling her no, I don't want to teach. But what do you really know at 20 years of age? We think we know everything when we're young but really have no idea how our lives will change for the next 20-30 years. I argued with Mom till the cows came home. I DO NOT want to teach. But here I am 25 years later and realize I would've been a really good teacher. I also believe I'd be a good small business owner. Never in my wildest dreams would I have thought about either of those years ago. In fact, it might even be a wise decision to get out of high school, work full time at whatever and save save save for a few years and the extra years out of school and the growing mentally might provide better guidance in what you might want to do. Then by the time you think of something you'd really like to do, THEN you decide if college or a trade school or simply more training in what you already are in, etc is right for you. I was always expected to jump right in college out of high school and I had no idea what I wanted to do. Just thoughts.

No.7's picture

I've thought of being a teacher

but I don't want to work for the Government. That's another reason I gave up on Civil Engineering, all the jobs are for Government.

Many people have told me I would be a great teacher but it doesn't seem worth it. I would have to teach at a charter school or private school that gave me more freedom. I would also want a way to keep a gun in my classroom. Maybe a small fingerprint safe bolted under the desk or in a closet, something to protect myself and students from an attacker.

The individual who refuses to defend his rights when called by his Government, deserves to be a slave, and must be punished as an enemy of his country and friend to her foe. - Andrew Jackson

jrd3820's picture

College

I never looked at college as the ticket to a career. I study what I love which is literature and economics. I never fooled myself into thinking I would get a job with those degrees. I have other skills to apply to the workforce. I also waited a while until I went to school because I think when you do go to college right out of high school you do tend to party more than study (we all do). I managed two Bachelors and I am almost done with my masters with only taking out $10,000 in loans and I have paid most of that back already. I did the rest with scholarships and testing out of credits.

I know you said you do not qualify for many scholarships, but if you have a few minutes check out some of these sites. You might have to look hard being that you "don't have a vagina" (as you so eloquently put it lol), but there are a lot of scholarships that are based on merit, and you can find some that work retroactively that allow you to pay off your loans.

College is not the most important thing in the world, and there are plenty of great paths you can take without it. If you want to get rid of some of your debt though, it might take a few essays (which I can absolutely edit for you if you need help) but you should be able to find a scholarship or 2 to take care of some of your loans.

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

No.7's picture

I gave up on scholarships and adopted a very negative attitude

towards them. I don't blame you girls and minorities for taking advantage of the scholarships. It's just, being a white male, affirmative action pisses me off. I know my ancestors were Native American killing, African American enslaving piles of poo but that doesn't mean I should get punished. Why should Asians, Blacks, Hispanics, and Females have different scholarship requirements than whites and males??? They say it's to make it more fair but affirmative action is far from fairness in my opinon.

I applied for sooooooooooo many different scholarships. I spent hours and hours applying for every scholarship I could find and I didn't get squat. I did get a small lottery scholarship that everyone gets, but you lose that after 2 semesters if you don't maintain a 3.0. After all those hours spent in futility applying for scholarships I'm afraid my motivation to ever apply for another one escapes me. I appreciate the encouragement but I'm not ready to get over my grudge for scholarships as a whole lol.

I chose Economics when I got back into school through community college. I'm honestly just doing it to get something for the money I already put into college, I don't expect to get a job for it. I have a pretty good job as it is eBay selling. The money is good and I like the work. Since we sell everything under the sun I learn something every day. That's what's most important in my opinion, gaining work experience and new skills.

The individual who refuses to defend his rights when called by his Government, deserves to be a slave, and must be punished as an enemy of his country and friend to her foe. - Andrew Jackson

What do I think

Where are the comments on

Where are the comments on this story? I'm only 44 but can give a little advice I guess to start. Remember that you can learn something from anybody. I worked in an ABC affiliate tv station and there were a few odd people working there that I noticed some could not bring themselves to talk to. You'd be surprised the good advice those individuals can give you; advice that can help you in future employment. Try to put away a little bit of money from every paycheck (even if it's just $5). Never spend it. Unfortunately, that kind of advice is so tricky today because of the dollar devaluation. Normally, it would be a little good advice. Work hard. Don't worry if you have to work in a job "below" your previous job or different from what you started out in. It's work and there's nothing wrong with it. I found that out when after my spouse at the time had govt. jobs that moved us, I had to work at whatever I could find sometimes. There is no shame in it. Do everything you can to get out of debt if possible. Pay off smallest loans or credit cards first and then hit the next smallest. Do not get in debt if you can help it. Resist the urge to use a credit card (or simply don't get one at all). I do keep one for "emergency" use but it rarely is used and if it does get used, it gets paid off right away. The cash you save is for that "rainy day" (do everything possible to not use a credit card). I have cousins who wanted children and decided to put it off till they "could afford it". They both graduated from college in the early 1990s with huge student loans to pay off. They are still paying them and childbearing years are coming to a close for both of them just about. If you wait to "afford" children, you'll never have them. I had one and adjusted my life for her. In fact, it forced me to make wiser decisions and I wouldn't change it for the world. Ok, that all might not have been the kinds of advice you wanted but that's a few things I've learned so far. Maybe someone else can come along and help you with investment advice. I think putting a little bit of money into silver or other commodities is a good idea for now (maybe about 10% of savings). But I'm not an expert on it. Good luck!

TwelveOhOne's picture

On paying off loans...

You said "Pay off smallest loans or credit cards first and then hit the next smallest."

The better algorithm would be to pay the minimum balance toward every creditor, and with any money left over that pay cycle, send it all to the creditor with the highest interest rate. Once that one is paid off, send all extra income to the next highest, etc.

This will ensure your loans are paid off in the shortest time possible, with the least interest paid.

It's slightly more complicated, but I know the 20-years-younger me would get it. :)

I definitely agree with staying out of debt. One should also not hold one's wealth in currencies that are devaluing/inflating -- so buy guns, gold, and land, generally in that order.

Guns to protect the rest; land because "they aren't making any more of it", and gold for similar reasons to land, but it's more portable/liquid.

Silver is also good, it's usable for smaller items than gold, like a dinner, and there's currently a ~52-to-one ratio in the price of silver vs. gold. There is only 16 or so times as much silver as gold on the planet, so this is an artificial difference which should correct itself. Thus, you (20-years-younger 12:01) should be buying silver today, and if you have gold, swap it for silver, because the ratio should correct; if it goes under 16-to-one, swap silver for gold.

Oh, and look into Bitcoin. See http://mtgox.com, it has been above $21 in the past couple days. It was $15 a few weeks ago when someone posted a beginner's guide to it. It's a hair over $20 now, so that's a 33% jump in a couple weeks. Definitely worth looking into.

I love you. I'm sorry. Please forgive me. Thank you.
http://fija.org - Fully Informed Jury Association
http://jsjinc.net - Jin Shin Jyutsu (energy healing)

Michael Nystrom's picture

Both of these comments - excellent advice

I remember when I got my first credit card, in college. It was a Chase card with a $2,000 limit, and I'll be damned if I didn't hit that limit in about 3 months! And I didn't even know what I bought. Just a little here, a little there - going out to dinner... lunch ... breakfast. It all adds up quick, especially if you're not paying attention.

Eventually I sold my car to pay off that debt.

Saving is important, but with the declining dollar, it is a concern. One of the functions of money that the USD does NOT serve is preservation of wealth. It works fine as a medium of exchange -- for now. So I would advise dollar cost averaging into silver and/or gold. Each week or month, take what you've got and buy an ounce or two. Don't worry about timing the market - this is money that is being saved and never spent. One day in the future you might cash it in for a house.

Ideally, the goal that I see is self sufficiency. You don't want to have to work for the man your entire life. Preferably, you don't want to work for the man at all. Ideally, you want to be your own boss, able to make your own living with your own skills. In order to do that, you need to have skills that are valuable in the marketplace.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.