How to teach son about investing?

[SnikPlosskin]

Originally Posted by DAB

i had a BS in Mech. Engr.

never formally studied investing.

retired at 45, 10 years ago.

basics: find something you are good at. work hard. save some of each paycheck - the more the better. max out any retirement accounts, 401k, IRA, Roth IRA (some years, i dumped money in all 3), save other money in a taxable account. avoid stupid debt. getting a mortgage for a house is ok (don't get more house than you can afford), everything else - pay cash.

if i didn't have the money in my pocket or in my checking account, it didn't get spent.

wash, rinse, repeat for 20 or more years.

now i can do pretty much what i want every day.

that concludes your free lesson in finance. go apply it.

Wow. You sound like some kind of grownup.

Originally Posted by markids77

DAB has it exactly right. Save, save, save and do not incur foolish debt. Learn a trade... I was a mechanic (highly sought after and highly paid), and then a parts specialist after my back failed. Have him think hands on and specialized instead of IT based and he can pretty much write his own ticket if he is serious about acquiring a skill.

A person does not need the stock or bond market to save for a well funded retirement... it requires only a dogged determination to live well within whatever your means might be at the time, and a consistent savings program. That way there is no risk of a market event ruining several years worth of planning; cash will never suffer a market "correction". Start young, be vigilant and live long; the rest will take care of itself.

I think finding something technical is key. It should be something companies can’t do themselves. It should be in the early growth phase of the industry.

Then you job hop. You spend a couple years at one company, recruiters find you, you change employers with each representing a jump in pay.

During this time you make good money and live within your means. It might be ten years. Max out the usual stuff. During this time learn all you can about investing - not necessarily in the market. Learn how companies create and capture value.

Then start your own company. Start it with an exit in mind. Typically seek to another company. Then do that four or five more times.

Start, establish company that Google or Amazon would buy. Give each one five years. If you plan from the beginning to sell at a high valuation, it can be done.

This could lead to a net worth in the hundreds of millions.

Or not.

Originally Posted by Stangkiller

I set up a 529 college plan for my son, started with $500 and put $50 a month in it, I’m hoping it grows enough to give a good lesson on time value of money. By my guesstimate it’ll be enough to cover around a third of his college costs.

Great idea. That train left for me. Bump that to $100 a month.

Originally Posted by snide

As I recall, Enzo is an entrepreneur. Ensure that he learns how to think like an entrepreneur and not a consumer.

I think that is important. My idea is to “use” employment for a purpose. By the time you are in your 40’s you should be set. Even with a couple set backs.

You MUST do your time within several companies. You need steady money. Even if the amount isn’t great, just being steady makes a difference. Choose the right industry and you will get high numbers and steady pay.

Move to a growth city.

But you must get to the point where you are able to take some risk. Young people aren’t thinking about retiring. They can’t grasp this stuff.

Originally Posted by DAB

old story:

a young man's father passes away and in cleaning up the papers of dad, he discovers a stack of stock certificates. not knowing what they were or were worth, he takes them to a broker and asks "are these worth anything?" broker tells him that he'll have to look them up one at a time, could he come back next week? sure.

a week later, the young man returns to the broker, and upon entering his office, sees two stacks of his certificates. broker explains that one stack is worth nothing, those companies went broke, but the pretty certificates would make nice wall paper for a chicken coop. the other stack are successful companies, some worth tens of thousands of dollars, all together, the stack is worth several million dollars.

the man is astounded.

the broker explains that the dad had bought these over time when he was young, based on the dates on the certificates, and had just left them alone for many years.

the lesson: you will have some winners, and some losers, but if you are patient, and diversify, you'll probably do ok over time.

good luck.

Great story. Perfect.

[SnikPlosskin]

I’m such a dumbasss. I shot out of high school after one semester of community college and hit the juke joints and dancehalls. It seems so romantic. I can’t say I wasted seven years but hitting college at 26 sets you behind the curve from the start.

Granted, my git pickin’ allowed me to survive and get through college and I had some amazing experiences playing with originators, but I wonder if that was a particuarly good idea.

I was very bad at math. Still am. I had to find a major that didn’t require a passing grade in calculus. I chose marketing and design. Me learning calculus has the same odds as my GSD writing a best selling novel.

I stayed self employed. I grew a great company worth millions. 9-11 killed it. I could have sold it to one of the larger agencies but my wife had cancer at that time. I shuttered it and focused on her.

I came up for air after losing everything in 2003. I’ve started over 3X since then.

My illness knocks me down and I get back up. I have nothing but a couple vettes. And ten more years to make up for it.

My kid has to do better. So he can support me.

[DAB]

yeah, i guess learning a skill, and applying it well and faithfully is outdated.

start some company, goose the numbers, sell it off to someone else who didn't have that same idea, pocket a pile of money, repeat as needed. there is always someone out there with money who wants to take over your company.