I would try to convert the 25 year old me to the Indexing investing strategy. I bought mutual funds at that age, but they were all actively managed. As a result, I am down in the several tens of thousands, perhaps even more. Also, I would emphasize to make sure to fund the IRA EVERY YEAR. I missed several and have missed out on the wealth that compounded interest would have generated.
Advice you'd give your 25 year old self
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seraphim
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Become a fee-based financial adviser...
If you had a time machine and could go back to talk to your younger self, what piece(s) of financial advice would you give in hopes of achieving FIRE more easily and/or living a better life. Or more specifically, what mistakes would you avoid if you had a mulligan.
Obviously, "save more!" is the easy answer... but I was looking for something more detailed.
I'm not much past that age myself (just turned 30) and am always looking for an opportunity to learn from others much wiser than me.
Oh, horsefeathers.
Let's turn this thought experiment around to a more practical aspect of life.
Those of you with kids: how successful have you been at delivering this advice to your 25-year-old young adults?
So why in the world would we think that we'd listen to some curmudgeonly version of ourselves lecturing us on how we should live our lives? In fact, seeing who they'll become may inspire them to run screaming for the opposite lifestyle!
I was 25 years old in late 1985. I spent seven months of that year aboard a submarine, almost six months of it underwater. I was nearly qualified to wear dolphins, I was defending democracy (and MAD) against the Evil Empire, and I had an incredibly hot girlfriend waiting for me in the Azores. I was overworked, overstressed, overweight, and hypercaffeinated.
If a balding ponytailed dude had appeared in my stateroom one evening, wearing surf shorts and a tank top and flashing a shaka sign, I would've been incredulous. If he'd said "I'm from the future to warn you that someday you'll be living in Hawaii with two hot chicks, retired on a military pension with more money than you'll ever need, earning royalties from your book, and surfing your butt off! Oh, and you'll be a second-degree black belt but you won't be drinking anymore."... well, I'll let you imagine the rest of that dialogue.
So maybe the question we should ask here is: "What advice do you think your kids will listen to and maybe even follow?"
Well, I guess this advice is always worth listening to...
Redbugdave
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My advise other than invest in Vanguard Indexes, maxing out your IRA's and 401...and living below your means...is to get a job doing something you LIKE.
There's nothing worse than wasting your time and life doing something you hate. If the job does suck...at least I hope you can put enough money away to ER from it and not have to work again. Doing something that you are passionate about means that you may not even want to retire and the money will come easy.
There's nothing worse than wasting your time and life doing something you hate. If the job does suck...at least I hope you can put enough money away to ER from it and not have to work again. Doing something that you are passionate about means that you may not even want to retire and the money will come easy.
ERD50
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Really? Nothing worse?
How about a job you love that doesn't pay enough to make ends meet and put away any savings. And then one day, you find that you either can't do that job anymore, or no one will pay you. And you have not developed other skills, because you were so happy doing what you loved.
That's pretty bleak also.
I'd say that if doing what you love doesn't more than pay the bills, get a real job and do the thing you love as a hobby. Or take your chances, but don't come whining if/when your dream falls apart, and expect a handout from those of us who kept our nose to the grindstone instead of 'following our dream'.
I think if you applied 'survivor bias' to the 'follow your dream' advice, you'd see a lot less of that advice. It's sooooo easy for the few winners to say 'I stuck with it, and my dreams came true!' Now interview the losers, flipping burgers.
-ERD50
Redbugdave
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I see your point ERD. It's just easier to go into a job you enjoy rather than dislike. Then there is the balance of money vs the job. If you know you can make a lot then bail, then that is worthwhile, too. Yes, I know we all don't get to be astronauts.
Jay_Gatsby
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I'd actually advise my younger self completely opposite as many folks have posted here. If anything, a 25-year old should take life MORE seriously. At that age, you're establishing a foundation for the next 30+ years of life. This isn't to say you should avoid having fun, but everything in moderation.
Finance Dave
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I bought a '69 Camaro in about 1982, and still own it today. It's a Z28 and is valued at $80k. I bought several other musclecars and sold them all over time. IMO such cars are not truly investments, or at least not good ones. Sure, you always hear the story about the 1970 Barracuda convertible with the 426 Hemi of which they only made about 8 of them in a certain color and are now worth $1M, but those stories are rare.
People often fail to think about the maintenance and storage costs. $50/month for a garage space, $50/year to change the oil, licensing fees, insurance costs, the fact that things wear out even if a car just sits (20 year-old tires may not be safe to drive on and rubber weatherstripping gets dry and rots), gasoline gums up, brake fluid is hydrophilic (attracts moisture), and the list goes on ad infinitum.
Invest in stocks instead.
I was in my 20s during the dot com era.
1) You're not a genius day trader. It may work for a little while but you'll soon lose it on a margin call. Index funds, index funds, index funds.
2) That backpacking trip to Europe with friends? Completely worth it.
3) If the market is right (like right now), buy a house and then get roommates to fill it. Get a 15 year note and you'll own the thing by the time you're 40.
4) As long as, like someone above mentioned, you understand the delay it'll cause in your FIRE plans, buy the sports car. But wait until your 401k is stuffed full of cash and you have a emergency fund. Yeah, I could've bought a Civic but tight corners at speed still make it worth it.
1) You're not a genius day trader. It may work for a little while but you'll soon lose it on a margin call. Index funds, index funds, index funds.
2) That backpacking trip to Europe with friends? Completely worth it.
3) If the market is right (like right now), buy a house and then get roommates to fill it. Get a 15 year note and you'll own the thing by the time you're 40.
4) As long as, like someone above mentioned, you understand the delay it'll cause in your FIRE plans, buy the sports car. But wait until your 401k is stuffed full of cash and you have a emergency fund. Yeah, I could've bought a Civic but tight corners at speed still make it worth it.
Frugalityisthenewblack
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Advice I would give my younger self.... don't fall for academic snobbery and limit yourself to a university education--- get a trade....oh wait...I did that and dropped out of university ending up in a blue-collar job at age 23!!...it was a good decision---even though I got zero support for it at the time from most friends and family.
I guess the advice I would give my 18 year old self..is ..go straight to trades school out of high school.
I guess the advice I would give my 18 year old self..is ..go straight to trades school out of high school.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
What advice I would give is-aim high.
Ha
Ha
chris2008
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Travel more!
But my 25 year old self was a "know it all". I am not sure that I would follow my advice. Fortunately I was not so wrong.
But my 25 year old self was a "know it all". I am not sure that I would follow my advice. Fortunately I was not so wrong.
Seeking Hobbes
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Take a chance... kiss the girl that you know (in your heart) is the ONE for you...
Win her over... Hold on to her... Grow old(er) with her... Never let her go...
Sigh... youth is wasted on the young (or IOW my collegiate self).
Win her over... Hold on to her... Grow old(er) with her... Never let her go...
Sigh... youth is wasted on the young (or IOW my collegiate self).
tryan
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Read the Richest Man In Babylon.
Date many, marry the right one.
Date many, marry the right one.
eytonxav
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+1, I think most people have too low an aspiration level for themselves. I know I did.
bo_knows
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Being what seems like one of the few people on these boards at or around 30, I love to see threads like this.
Since I'm only 5 years past my 25th birthday, it may seem a little moot, but I'll play with the idea of the thread anyways:
- I was about to get married 5 years ago. I'd tell myself that I was marrying an amazing woman (that much I already knew), and that in a few years I'd have a sweet child to care for.
- I'd tell myself to max out my IRA by contributing to it monthly (for a long time we only funded our IRA's based off my wifes end of year bonus, and often times we wouldn't fully fund it for one reason or another).
- I'd tell myself to buy a house that maybe needed a little work, rather than a move-in ready one. A lot more room for savings there.
Since I'm only 5 years past my 25th birthday, it may seem a little moot, but I'll play with the idea of the thread anyways:
- I was about to get married 5 years ago. I'd tell myself that I was marrying an amazing woman (that much I already knew), and that in a few years I'd have a sweet child to care for.
- I'd tell myself to max out my IRA by contributing to it monthly (for a long time we only funded our IRA's based off my wifes end of year bonus, and often times we wouldn't fully fund it for one reason or another).
- I'd tell myself to buy a house that maybe needed a little work, rather than a move-in ready one. A lot more room for savings there.
TromboneAl
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Do you think you will follow any of the advice we've mentioned here?
OP
OP
EvrClrx311
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The answer to that is a definite yes... for me. I've already read this thread front to back a half dozen times. This is more valuable than a library of financial books as far as I'm concerned.
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james7
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+2
Great thread with a lot of good advice. I just wish my parents had given me a small fraction of this advice when I was young. No doubt I wouldn't have listened.
bo_knows
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So far, as far as investments go, I do. I live in a high cost of living area, so much of my "extra" savings is going toward paying down a mortgage (so I'm not over 50%+ savings rate like many people are/were). But I am currently reading a few books listed in this thread, and hope to really push for FI/RE to enjoy it as early as possible (maybe 45?).
cwebjohn
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Thanks for all the good advice. I just turned 26 on Memorial Day and there is a lot of great ideas here.
I think the hardest thing is getting the capital to make those wise choices at this point. I would love to put thousands down on a new house but to save takes time. If anything, what I have learned is that saving money over time beats the alternative.
I think the hardest thing is getting the capital to make those wise choices at this point. I would love to put thousands down on a new house but to save takes time. If anything, what I have learned is that saving money over time beats the alternative.
marko
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Get a job with the city DPW. Retire at 43 with full bennies for life.
Then, if you want, get another city job...with another pension.
(and if you get even a minor, non life threatening cancer within the first five years of retirement, the city picks up your fed income tax)
Then, if you want, get another city job...with another pension.
(and if you get even a minor, non life threatening cancer within the first five years of retirement, the city picks up your fed income tax)
james7
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That is quite a city!! No wonder this country is bankrupt. I don't think the benefits are that generous in Greece.
marko
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better than Greece: Massachusetts! You can also vote as many times as you want <grin>
Lots of great advice here. I'd like to just amplify some:
1) you are only 25 once. You are in the best health, best frame of mind, best everything you will ever be. Enjoy the hell out of what you are at that point! Sex, drugs (not too much) and Rock and Roll. If you don't, you will regret it forever when you are old and mature.
2) Don't invest with a brokerage. Just put $ into index market and bond fund(s). OK, maybe just 80% and play with the other 20%. At least only 20% of your $ will do poorly. Live beneath your means (but don't be miserly, you have to live too)
3) Buy a (used) sports car and zoom around in it for 5 years. Then be mature and get a (used) sedan.
4) Be absolutely sure that you are IN LOVE when you marry. Divorce and the pain it causes are expensive.
5) If you do all of these, you will have a better than 50% chance of having a great life.
1) you are only 25 once. You are in the best health, best frame of mind, best everything you will ever be. Enjoy the hell out of what you are at that point! Sex, drugs (not too much) and Rock and Roll. If you don't, you will regret it forever when you are old and mature.
2) Don't invest with a brokerage. Just put $ into index market and bond fund(s). OK, maybe just 80% and play with the other 20%. At least only 20% of your $ will do poorly. Live beneath your means (but don't be miserly, you have to live too)
3) Buy a (used) sports car and zoom around in it for 5 years. Then be mature and get a (used) sedan.
4) Be absolutely sure that you are IN LOVE when you marry. Divorce and the pain it causes are expensive.
5) If you do all of these, you will have a better than 50% chance of having a great life.
