Importance of investing early...

[Jay_Gatsby]

When you first start working is the optimal time to learn to LBYM and start saving for retirement... however, a person who starts working at 19 is even less likely to make that decision to save than someone who is 23.

The main reason for this is because the vast majority of 19-year olds (and 23-year olds for that matter) consider retirement so far away that it's not even fathomable. In other words, when you're young you think you're going to be young forever. It's not until you undergo some change in your life that the idea of getting old (and retiring) is even a nascent thought.

 

[Nords]

The main reason for this is because the vast majority of 19-year olds (and 23-year olds for that matter) consider retirement so far away that it's not even fathomable. In other words, when you're young you think you're going to be young forever. It's not until you undergo some change in your life that the idea of getting old (and retiring) is even a nascent thought.

Our daughter's lived half of her life with ERs. That includes her having to slog off to school each day while we've gone surfing, or slept in, or just lazed around the house having all sorts of fun without her. Then we'd sit around all evening telling sea stories while she was trying to get her homework done.

It'll be interesting to see if she's driven to achieve her own financial independence, or if she totally rebels against the parental stereotype and finds an avocation that she can love and never have to retire from.

 

[DJRR]

The main reason for this is because the vast majority of 19-year olds (and 23-year olds for that matter) consider retirement so far away that it's not even fathomable. In other words, when you're young you think you're going to be young forever. It's not until you undergo some change in your life that the idea of getting old (and retiring) is even a nascent thought.

I guess that was my real thought. I did not find out about compound interest until I was ~ 30 while looking for a new career and went to a financial planner presentation. Skipped the career, but started investing Really changed my view when they said that x% of people live on Social Security only but if you put away x% you can do much better than average.

Hoping that my two daughters will start in high school and end up as multi millionaires or financially independent if they will act on it. One will be very successful in corporate America if she chooses, but one is a very talented musician/artist who I don't want to take a soul sucking job. If she saves early she could cobble together a career of teaching music, doing weddings, etc. and still be FI even if she never makes it really big.

 

[Jay_Gatsby]

Hoping that my two daughters will start in high school and end up as multi millionaires or financially independent if they will act on it. One will be very successful in corporate America if she chooses, but one is a very talented musician/artist who I don't want to take a soul sucking job. If she saves early she could cobble together a career of teaching music, doing weddings, etc. and still be FI even if she never makes it really big.

My dream is that my children will be financially independent such that they can pursue their passions from a young age. Historically, this is how many great artists, musicians, scientists, etc... were able to achieve their success. Namely, they came from families wealthy enough that they did not have to worry about working a job just to pay the rent. As a parent, the key is to fund their passion, not their laziness. They have to treat their passion as one would treat an enjoyable job, which in the end is exactly what it will become. Do what you love, and the (necessary) money will follow....

 

[Milton]

They have to treat their passion as one would treat an enjoyable job, which in the end is exactly what it will become. Do what you love, and the (necessary) money will follow....

There were a couple of interesting short articles on this issue in the May 21, 2012 WSJ (page R7).

Rob Johnson, "Point. Set. Match. I Lose": "A realization started dawning on me. My passion for tennis was superficial - an outlet from my working life as a journalist - and I mistook it for something more. Teaching the game was like moving in with someone you've been dating, and then finding out you get on each other's nerves."

Tom McNichol, "Do What You Love? Maybe Not": "The problem is that 'do what you love' is incomplete advice, and sometimes misleading. Marty Nemko, a career coach and author in Oakland, California, says he often deals with clients who pursued a passion, only to find disappointment or financial disaster - because they went into it blinded by that love.... Many people believe that the best strategy is to pursue a pre-existing passion, and that will lead to career satisfaction, he explains. More often than not, he says, they find they're not actually good at it, don't like the work or can't make a go of it."