Wisdom Download?

[Deleted]

My YM inclined DD has come to the point that she wants me to tell her "all the financial stuff she needs to know".  She is showing up with her notebook every other week to gain these pearls of wisdom.

I most certainly don't know everything, really only the path I took and what worked and didn't work from my experience.  I can also provide some of the insights gained on this board where others have obtained success or hit pitfalls.

How do I give her a more complete and well-rounded view of finance for young adults?  

Was there a thread once of the most important information you think kids need to know?  Anyone know where that one is now?

[Deleted]

How old is she?


ETA: You might be thinking of the Most Useful Threads on YM which is pinned to the top.

[Deleted]

24 

No, I can't find the thread I'm after.  It was numerous people posting the one best piece of advice you'd give from your life financial experience.  So it covered many many topics.  

[Deleted]

Rock it, I do remember that thread but it's been a while.

When I was that age I remember reading Jane Bryant Quinn's book on Personal Finance. It's a tome for sure but she's very good.

And I gather you don't want her posting here?

[kilroy]

I would also highly recommend Personal Finance for Dummies - bad title, great book.

[Deleted]

Bonny - I did suggest she look into personal finance boards & if she shows up at this one she'll recognize me pretty quick.  I don't think I say anything here that wouldn't have already been said in RL.  I only vent about her sister's financial dissonance, which she does too.  During estate planning discussions she said I should put her in charge of sister's money because sis will piss it away on stupid stuff.  True, however putting her in charge will create immediate conflict between them & sis will manipulate and trick to get what she wants anyhow, so no win situation for DD#2.  She understood that my decision is that it's 50/50 and if her sis pisses away the money in a year then that is her bed to lay in and she is NEVER to lend her sis money (and I am looking into a grandchildren's trust that DD#2 would administer for college funding or business start up for DD1's kids).

I can give her the Personal Finance for Dummies download 

• Use CCs for convenience, not carrying debt -- Already does that.  Knows it is a "must pay off every month" obligation and has been doing so for her college years.
• I disagree with their "what you use debt for" philosophies - I will finance a vehicle at 0-2% rates, no brainer, but they advocate against that.
• Live below your means & no KUWJ -- she's got that, just hard to manage when you are not fully employed yet.  She craigslist shopped all her furniture (except bed because that was my rule that it had to be new)
• Save & Invest 10% of your income.  She's got that & knows 401K will need to be a priority.  I might help her with a Roth this year since she'll only have 4 working months (part time).
• Avoid high commission investments.
• Invest per a long term plan.
• Insurance appropriate to your risk absorption level has been done
• When home ownership is the option you want to look at. This is going to get higher on the list as rental rates are escalating quickly here.
• Marriage & the importance of alignment on financial goals
• Planning for the unexpected life changes that happen
• Balance in your life - She's already an over-worker (genetic flaw) so touching on this with her routinely.  Took a while to convince her to drop the 2nd job (crappy retail) as it was beginning to interfere with the real career job steps.

She is going into teaching, so all of their investment mechanisms etc are foreign to me.  I think they have pension schemes and 403b's and no eligibility for SS and things like that that we will be figuring out together.  

[Deleted]

I'd give her Jane's latest book as a holiday present. Looks like it was last revised in 2010.

She goes into some very good detail about different investment vehicles and their pros and cons. Your daughter can also check out her blog at: janebryantquinn.com/

As a quick example look at her post about why would anyone buy bonds under the investing tab.

[Deleted]

Oct 27, 2013 14:44:45 GMT -5 @rockit said:

I most certainly don't know everything, really only the path I took and what worked and didn't work from my experience.  

In my opinion that's best you can give to your DD.
Besides that let her learn through living her life of their choosing.

[tskeeter]

Rock it, sounds like you want a financial wisdom from Mom and Dad (or Grandma and Grandpa).  Why don't you compile your own?  Here's an outline to help you get started.

Useful Financial Facts
    Historical inflation rate, growth of the S&P 500, and the like.
Risk Management
    Emergency funds and insurance you should have a various points of your life.  How much is enough?
    Risk that is too expensive to try to manage (aka buying service agreements and the like)
Saving
Investing
Borrowing Money
Selecting a spouse
    Poor selection of a spouse has led to a lot of financial discord and lots of expensive divorces.  Do it right the first time.
Buying stuff
    How much house or car can I afford?
    Great ways to waste money.  (Expensive cars, McMansions, and your frenemy, the Joneses)
Retirement Planning
    Just started your first job?  Now is the time to plan for your retirement!
    Plan for 50, or 55.  It gives you choices.
How mowing your own lawn/cleaning your own house pays for a European vacation every 3 - 5 years.  (Joneses, eat my dust!)


Ok guys, have at it.  Help fill in the blanks.

[Deleted]

LOL, tskeeter, I think even paying $24 for the hardback is more cost effective.

But I certainly see that a sweet gesture from @rockit would be her personal story on the blank page; e.g. I love you and this is what I learned...

I bet every young adult would love a gift like that...I sure would have.

[tskeeter]

Oct 28, 2013 12:15:50 GMT -5 @bonnap said:

LOL, tskeeter, I think even paying $24 for the hardback is more cost effective.

But I certainly see that a sweet gesture from @rockit would be her personal story on the blank page; e.g. I love you and this is what I learned...

I bet every young adult would love a gift like that...I sure would have.

Jiggers, Bonny, you're on to me.  $24 is probably more cost effective.  But, unless I can Tom Sawyer you guys into helping me flesh this out, I don't think my internet personal finance publishing empire is going to get very far.

[HoneyBBQ]

send her to read at the boglehead forum.

[Deleted]

Can't get signed up with boglehead.  Apparently our IP provider causes too much spam into their system, so they won't let us register :-(  They told me to try to sign up from work.  I guess I'll tell her to try the same thing!  I'll put that on the to do list this week.

Sorry tskeeter, I think I'm going to go for the $24.  She's getting the basics verbally & puts in her notebook (see, I am making her write my financial book  )

[Peace Of Mind]

Archie posted this on another thread (he was emulating a poster from back in the day - as you can tell based on all the wisdom - that it wasn't Archie saying it  ):

"Advice for young people who want to be financially successful:

You can control your financial destiny, live a good lifestyle, retire with security and grace — even luxury — if you make good decisions and avoid some of the mistakes your friends are making:

Plan for a good career. Don’t just settle for whatever comes along. You have to make your own way. If you want financial success, you will have to take responsibility for preparing yourself to earn it through education, developing your skills and abilities, and improving your worth to an employer or a customer every day. If you fail to make yourself productive, there is no one else to blame but yourself.

Learn the value of saving money. There are two ways that money is obtained: 1) you can earn it with your labor, ideas, or skills 2) the money you have will earn more money Obviously, you have to do #1 before you have #2. But if you never save any money, you will never accumulate wealth. Don’t confuse making money with having money. There are a lot of people out there driving a Lexus who will have only their social security or some other handout when they retire. Start saving now, and let the miracle of compound interest make you rich.

Be patient. Most people who are financially successful started out with nothing, just like you. It takes patience, determination, and humility to avoid jumping at every temptation. Every day that you delay buying something is another day that your savings are working for you. Trust me, you won’t have to wait forever, just for a while.

Don’t go into debt. Someone who borrows money to buy something always pays more than the person who doesn’t. That has a “double whammy” effect. When you borrow money, you not only pay for the luxury of having it when you can’t afford it (interest) but you lose the income your money could have earned if you had delayed the purchase and saved up for it. The two biggest culprits: credit card debt and car loans. Remember this: If you never make a car payment in your life, you will spend half of what everyone else spends on cars for the rest of your life. Pay cash for your cars — buy what you can afford — and one day (soon!) you will be able to walk into any showroom and write a check for the car you want. But if you get in the “car loan” habit, trust me, you will never get there. Another note: sales people will try to talk you into buying a car that you can’t afford by selling you a long-term loan. The payments might seem really affordable, but as soon as you drive off the lot you have immediately lost thousands of dollars, because you now owe more than the car is worth. If you tried to sell the car the very next day, you would lose a ton of money. That’s called being “upside down”, and it’s not a good position to be in.

Don’t take risks. Risk here is defined as possible life danger. Not risk in investing. Risk in investing is postive. Because the higher the risk the greater the gain or yield. So we usually have to take more risk in investing. (Italics mine) Insurance is necessary. Saving for emergencies is necessary. Keeping your job is necessary. Grades and graduation are critical. Don’t drink and drive. Don’t smoke. Don’t do drugs. Be honest, don’t break the law. Pay your taxes. If you take risks with your money, health, and security, sooner or later you will get burned. Trust your instincts — if it doesn’t feel right or safe, don’t do it.

Get in on your employers retirement plan. One of the greatest wealth-builders out there is the 401(k) plan offered by most employers. You take money out of every paycheck before tax is calculated (which means you pay less tax) and your employer will add a “matching” amount. This money is put into an investment account of your choosing, and it builds like crazy. Many people are retiring young with a million dollars or more in their 401(k) accounts. Don’t miss out on this opportunity, and don’t be tempted to “borrow” the money out of your retirement fund for other purposes.

Marry someone who shares your economic values. Divorce is a major cause of financial problems, and disagreements about money often cause divorce. Your life partner should be your wealth-building teammate, not a financial enemy.

It’s important to understand that your future is within your control. But you have to start now! Learn all you can, be patient, work hard, and make good decisions. You can join the millions of Americans who have taken advantage of the opportunity to become wealthy and happy."

Live well and prosper! 

[Phoenix84]

Oct 27, 2013 15:27:48 GMT -5 @rockit said:

24 

No, I can't find the thread I'm after.  It was numerous people posting the one best piece of advice you'd give from your life financial experience.  So it covered many many topics.  

Tell her to marry the right man.  No, seriously, divorce is expensive, and so is a partner who's a financial drain.

Your daughter is 24?  That's not much younger than me....   I'm pretty good at finances.

[Phoenix84]

I'd also discuss debt and interest, and the importance of investing young.

[Deleted]

Oct 29, 2013 16:38:18 GMT -5 Phoenix84 said:

Oct 27, 2013 15:27:48 GMT -5 @rockit said:

24 

No, I can't find the thread I'm after.  It was numerous people posting the one best piece of advice you'd give from your life financial experience.  So it covered many many topics.  

Tell her to marry the right man.  No, seriously, divorce is expensive, and so is a partner who's a financial drain.

That's pretty good advice coming from twenty something without disrespect. 

But love has no boundary... Eventually, live and learn, we all learn from our mistakes. 

[shanendoah]

The Plutus Awards are for the best in personal finance blogs.

Here are this year's nominees for Best Personal Finance Blog for Young Adults
Broke Millennial *winner*
The College Investor
Making Sense of Cents
Young Adult Money
A Young Pro

These might be good places for her to do some more reading on her own and connect with other people her age who are interested in personal finance

[Deleted]

Oct 29, 2013 16:38:18 GMT -5 Phoenix84 said:

Oct 27, 2013 15:27:48 GMT -5 @rockit said:

24 

No, I can't find the thread I'm after.  It was numerous people posting the one best piece of advice you'd give from your life financial experience.  So it covered many many topics.  

Tell her to marry the right man.  No, seriously, divorce is expensive, and so is a partner who's a financial drain.

Your daughter is 24?  That's not much younger than me....   I'm pretty good at finances.

She's an awesome catch, but the MIL, well she's a bit of a nightmare   

Seriously though, she's got the whole divorce show down.  She knows how things went with my marriage implosion & her sister's marriage ultra-explosion (and ungodly costs).  

ETA: As a consolation prize I cured you.

[Deleted]

@rockit said:

She's an awesome catch, but the MIL, well she's a bit of a nightmare

Well at least she won't have to worry about mom moving in because she screwed up her finances and has to live on cat food!