Should I waste my time?

[Rob Base 2.0]

Dude at work that I kind of like said to me today "Hey your a budget guy here at work you must be good with Finance / Investments and stuff"....I just quickly mentioned I only really do easy stuff like Index Funds etc.....He was like "Oh I want to learn more about that"....

After a short convo it was clear he didn't know much about IRAs, 401Ks, Index Funds, etc.....

He said he does have a 6 month EF and that he invests 5% in the Thrift Savings Plan (TSP---gov 401K)...... so he gets the 5% match

He invests in a lifecycle fund

For some reason instead giving vague deflecting answers I gave him some actual small advice and stupidly said "if you ever have any questions let me know...."

I'm so screwed

Any waste, I'm planning minimal involvement unless dude does his part (done banging head on wall discussing personal finance planning, I've been burned before)

But he asked me about some websites or books ...I have some ideas but wanted to ask you all:

1) am I screwed? should I waste my time?

2) what beginner level websites / books would you recommend?

[Rob Base 2.0]

Also to note dude just got out of the Army so is in transition mode (no retirement) and also is at a relatively low GS level (7) but he has promotions each year for 2 years (dependent on him not f'n up and managers liking him)

[ken a.k.a OMK]

Give him some websites like Fidelity or Vanguard that have investment/retirement tools and info. Let him learn on his own then ask you things he didn't understand.

[Lizard Queen]

I'd send him to the Mr Money Mustache site.

[phil5185]

'The Little book of Common Sense Investing' by John Bogel (founder of Vanguard).  About $15 on Amazon.  It gives a great summary of Index Funds, how to become wealthy, etc - a very good summary of what he needs to know.

[souldoubt]

As others said suggest books (All About Asset Allocation, book Phil suggested) or that he start an IRA through Vanguard or Fidelity while he can read up on some of the beginners articles they have there.  Every now and then I get asked questions by people who don't know much about investing and I try to help but at the same time they need to educate themselves.  Their intentions are good but it's clear that despite what they say they either aren't driven enough to do it or they think it's too daunting and simply don't do it.  I've had the same people ask me the same questions more than twice over the last 5 years and all they're doing is wasting time which is the biggest thing these formerly 20 somethings have on their side. 

[Deleted]

Bogleheads for investing.

Though I'm curious why you didn't say to try to hit it big with penny stocks? I mean it's can't miss.

[Deleted]

Mar 16, 2017 16:22:08 GMT -5 Rob Base 2.0 said:

Also to note dude just got out of the Army so is in transition mode (no retirement) and also is at a relatively low GS level (7) but he has promotions each year for 2 years (dependent on him not f'n up and managers liking him)

The key to moving up the GS scale is willingness to move and apply for everything. DW moved from a 7 to a 14 over 13 years moving to 3 different locations, civilian tours in Iraq and Afghanistan also helped.

[Deleted]

Oh and this is awesome for fed Benny's and other stuff

www.fedsmith.com

[Deleted]

Bogleheads Guide to Investing is my favorite easy to follow book. 

[Apple]

To start with, tell him to:  

Buy back his military time (if he did not retire from military).  It will have some immediate effects, like adding to his vacation time (if it will give him whatever number of years is required for 6 hours).

Up his contribution.  If he has a small tax liability, open a Roth with TSP.  

Find out if the organization has held retirement classes recently, and if not, if they would (for people over 10 years until retirement).  Training for TSP is sorely lacking, he wants to get that info now.  Also, keep the email address of the person who teaches the class, so he can ask tsp/fers questions directly to them.

Other people will have advice for books and websites, but he really needs to get on EBIS and TSP.gov and start doing some calculations, playing with numbers, etc.  Those will provide calculators specific to fers related situations.

The more he can sacrifice and invest now, the more he'll have a little freedom to relax in the future.  

[beergut]

Auto-plug for Clason's The Richest Man in Babylon

Free pdf available at the link.

[Deleted]

He's asking for help- this is a good sign that he's starting to "know what you don't know".  I agree with mostly pointing him to good resources- the last thing you want to do is start making recommendations for specific investments, even if they're reasonable ones, and have him freak out when they decrease in value.  Same with questions on "should I pay off this or that debt first?".

Suggest that he check the public library for books on personal finance and choose a few that have approaches that seem reasonable to him.  I like "The Millionaire Next Door" because of its emphasis on living below your means, staying out of debt and being wary of "easy monthly payments".  I like Dave Ramsey for the same reason even though I disagree with his "credit cards are evil" stance (not if you pay them off in full every month).  One or both of those books may also advocate rental properties; I've seen enough stories here to know that being a landlord is not for me even though its' been great for others, and have done just fine avoiding that route.  So much depends on the individual, which is why I think you need to be careful about specific recommendations.  My first husband considered any unused credit line on his cc to be money he could spend.  In his case, credit cards WERE evil!

[NastyWoman]

I had an evil thought involving baby steps but decided not to go there

[Deleted]

Mar 17, 2017 18:20:08 GMT -5 NastyWoman said:

I had an evil thought involving baby steps but decided not to go there

Hey, DR is great for getting out of debt, but I wouldn't in a million years suggest him for investment advice.  He totally flies off the tracks at that point! 

[NastyWoman]

Mar 17, 2017 18:43:08 GMT -5 minnesotapaintlady said:

Mar 17, 2017 18:20:08 GMT -5 NastyWoman said:

I had an evil thought involving baby steps but decided not to go there

Hey, DR is great for getting out of debt, but I wouldn't in a million years suggest him for investment advice.  He totally flies off the tracks at that point! 

But I wanted this guy to sign up here too and report back to us on the advice he got there. We could have a ball commenting   But it is Lent so I behaved...

[Deleted]

Mar 17, 2017 18:50:36 GMT -5 NastyWoman said:

Mar 17, 2017 18:43:08 GMT -5 minnesotapaintlady said:

Hey, DR is great for getting out of debt, but I wouldn't in a million years suggest him for investment advice.  He totally flies off the tracks at that point! 

But I wanted this guy to sign up here too and report back to us on the advice he got there. We could have a ball commenting   But it is Lent so I behaved...

Oh...LOL  I totally missed the evil undertones.

[NastyWoman]

Why else would I hold back for Lent minnesotapaintlady?

[beergut]

Mar 17, 2017 18:43:08 GMT -5 minnesotapaintlady said:

Mar 17, 2017 18:20:08 GMT -5 NastyWoman said:

I had an evil thought involving baby steps but decided not to go there

Hey, DR is great for getting out of debt, but I wouldn't in a million years suggest him for investment advice.  He totally flies off the tracks at that point! 

 You mean, "Find you a good, low-cost mutual fund that averages 12% return per year" isn't great investing advice? 

[Deleted]

Mar 18, 2017 5:53:18 GMT -5 beergut said:

Mar 17, 2017 18:43:08 GMT -5 minnesotapaintlady said:

Hey, DR is great for getting out of debt, but I wouldn't in a million years suggest him for investment advice.  He totally flies off the tracks at that point! 

 You mean, "Find you a good, low-cost mutual fund that averages 12% return per year" isn't great investing advice? 

Oh yes, because the S&P 500 is just the AVERAGE of all mutual funds didn't you know that?  50% perform better and 50% worse.  Any moron can take 20 minutes to look at the history of a fund to see if it's one that consistently performs far above the S&P 500  

Then the whole Roth, Roth, Roth chanting and total denial that there are ever situations where traditional is better.

Skip the match during debt paydown.

Don't exceed 15% into retirement until your house is paid off.

Front-end loaded managed funds are better.

I listen to his podcast every day but some things make me cringe.

[beergut]

I used to listen to his show at night just to hear the 'debt free' screams.

His absurd investing advice always made me laugh.

I had a couple come in to the office dead set on getting a Roth IRA. Why? Because they were doing Ramsey's Financial Peace U, and were convinced what he said is gospel. I explained how their current and future income level meant a Traditional IRA made more sense, but they wanted a Roth, so we gave them a Roth. 

[Deleted]

Mar 19, 2017 5:46:50 GMT -5 beergut said:

I used to listen to his show at night just to hear the 'debt free' screams.

His absurd investing advice always made me laugh.

I had a couple come in to the office dead set on getting a Roth IRA. Why? Because they were doing Ramsey's Financial Peace U, and were convinced what he said is gospel. I explained how their current and future income level meant a Traditional IRA made more sense, but they wanted a Roth, so we gave them a Roth. 

He went on again today with a caller doing all the math showing how many millions the guy was going to have by putting all his money into the Roth 401K instead of the Traditional...completely ignoring the tax savings on the front end in his equations.  So of course, it was a "no-brainer" to go Roth.