Comment: Excellent Topic

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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 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.