Ways to convince friends to invest in the market and/or F.I.R.E?

[F.I.R.E User]

I learned my lesson on investing advice awhile back. A former friend of mine worked for some kind of bio-medical-whatever type of company. He had a 401k with them, but knew nothing about investing, so it was all going into a money market account. I told him he should at least put a little bit into his company's stock. Not a huge amount, but just enough that if he lost it all, it wouldn't hurt him, but if it took off he'd be happy he did.

Well, he did it, and was even able to get it at a slight discount through some program his company was offering. Well, it seemed like as soon as he bought it, it went nowhere but down. And then he got fired. We pretty much ended the friendship about 4 or 5 months later (not because of the stock; we just had different viewpoints on life and such).

I always felt bad that he bought that stock, based on my recommendation. I don't know if he ever sold it or not. I guess one consolation though is that he bought it around $30/share; I just checked it and it's around $23/share now. So if he still has it, he's lost money, but not totally wiped out. And, this guy is 35 now, so still young enough to recover in the long run. I'm hoping at least he's started investing in something other than the money market fund, though.

If I had recommended that he put it into an SP500 fund instead, I imagine it would have easily doubled in that timeframe. But, hindsight is always 20/20!

I have ESPP too but that’s less than 1% of my portfolio and I get 15% a share for a Megacorp. I’ve always gained and never loss money.

 

[F.I.R.E User]

+100. I’d never try to convince someone else what to do with their money, even if they ask me to.

Ask yourself, if someone else tried to convince you where to invest or when to retire, how would you take it? I’d nip that conversation in the bud immediately…

I would love that invitation talk about where to invest and retire. It would be a good convo.

 

[F.I.R.E User]

I agree with everyone saying you're not likely to change anyone's mind. However, since that's not what you asked, I'll try to address what you did ask, how might you get them on board?

I'd say, since you said they discuss finances with you, put their numbers into FIREcalc, or if you just discuss generalities, just use your best guess! Seeing how saving from their 30s or even your 40s can compound is difficult for some people, especially if they aren't used to doing that kind of analysis. Put in that they work until 70 (to maximize SS, and so they'll be on Medicare when they retire, and assume a fairly simple two-fund portfolio. That might give them a decent chance of doing well, at which point they might take more of an interest. This would work best with those people who have read or heard about things like margin calls or annuities or whatever and felt overwhelmed, but it might help show them that the very basics are, well, very basic!

Well one is them said they don’t have the money to invest but have few hundred a month for Crypto.

 

[F.I.R.E User]

Lead by example. When they see your success, they may become interested and ask for your advice. Until then, just have fun and enjoy your friends.

Show them a screenshot of my Mint app with NW?

 

[The Cosmic Avenger]

Well one is them said they don’t have the money to invest but have few hundred a month for Crypto.

See, you could try putting that few hundred into an index fund in FIREcalc or something, but my guess is this is the kind of person that would rather buy $50 worth of lottery tickets every week rather than investing that $50. Still, I think a retirement planner showing what they could easily do with the money they're already allocating is the most promising approach for someone like that.

 

[MRG]

Inherited cash?

A small six figure sum that for them would have probably given 6k income yearly. Not much? I agree but these people moved 600 miles away from their home and grandkids to move where their SS wouldn't have state taxes withheld.

 

[Music Lover]

I only give financial advice to people who ask, and even then I have to be sure that they actually want some advice or I'll avoid answering. When working I was known as the guy who knew everything about our work pension so made spreadsheets for 3 or 4 people helping them decide when to retire.

The drummer in one of my bands owns a business and he's talking about selling the business and retiring. Since I know very little about his business income (other than he does quite well) my "advice" is limited to what him and his wife can expect from CPP and OAS, pulling their RRSPs, tax implications, and telling them about the 4% rule.

 

[2HOTinPHX]

Show them a screenshot of my Mint app with NW?

https://youtu.be/iQbfLrVNd6I or watch short version of this..from 8 minutes on..includes a very nice graph.

 

[brett]

Why on earth would you want to convince friends or relatives to invest in anything? Danger!

 

[Koolau]

I can't tell you how many times I tried to council my w*rk buddy about his spending. He's the one I've mentioned who is 77 and half a mil in debt. Every time he got $10K ahead in his 401(k) he'd pull it out and pay the tax and penalty. I can't count the number of times he refi'd his home for cash. Betting on Crypto investing would have been an improvement in his case. Too bad as the guy is a great friend. I will definitely die with the most money and he will die with the most toys. Maybe he's right and maybe I'm wrong. YMMV

 

[old medic]

I have a few friends, and coworkers that are curious as to why I'm retiring now and not waiting till the normal age 62/65. I have directed them to here to learn for themselves.
The best one Is a work partner I've know since she was a medic student. She had started a small 401K that she doesn't add to anymore... well a few minutes with a few online calculators, and a quick tour of FireCalc.... Shes wanting me to sit down with her husband and show him too...

 

[skyking1]

^ they were "thirsty horses"
Seriously, you just know when the discussion is a welcome topic. Mostly it is not.
We have friends we discuss finances with, and others that we wouldn't dare. We have a 30 something friend who floated out the idea of selling some company stock to <insert complete waste of retirement money of your choice here>.

Well, she asked, we answered.

 

[jazz4cash]

+1

When talking to others about my investing strategies, I usually say I really don't have a hot stock tip or anything. Just follow the indexes. They then seem disappointed. That's usually a conversation killer .

Exactly.

 

[Koolau]

Forgot to mention: My 77 YO friend invests in Lotto tickets!

 

[Badger]

My best friend was a spendthrift (new cars every 2 years, dining out regularly, well dressed, LOTS of guitars and amps, travel, etc. but no savings) and used to kidding me about my frugal behavior. I never found it necessary to say anything about his carefree spending habits or to try and convince him to consider the future. The last few years of his life he had to struggle just to get by. He had next to nothing except his guitars. He finally admitted that maybe he should have paid more attention to my example. Did it finally make a difference? No!


Cheers!

 

[jollystomper]

Forgot to mention: My 77 YO friend invests in Lotto tickets!

When I was younger a surprising number of people I knew saw lotteries as better investments than the stock market. One "pearl of wisdom" from a co-worker that had a discussion with me on the topic: "yeah, if I did not buy lottery tickets I could put away a couple of thousand a year. But I'd miss out on a chance at these big pots that could solve my financial problems a lot quicker!" Okaaayyyyyy...

 

[F.I.R.E User]

One said $2M that I am going for won’t be enough.

 

[F.I.R.E User]

Be a shining example to them! Live beneath your means. Save. Invest wisely. Become FIRE! THEN, they will start asking your advice!

That’s what I have been doing.

I'll throw out another don't bother unless asked. Unsolicited advice will generally not be appreciated. How much to invest is a lifestyle choice. Also, there is so much to fix, one conversation would not be anywhere enough even if they were completely open. If asked, I would first beg them to at least get their company match, if at least that minimum can be reached, begin with explaining how volatile crypto actually is, the basics of an asset allocation, and selecting a reasonable entry point (buy low/DCA).

They told me stocks are volatile too.

Lead by example. When they see your success, they may become interested and ask for your advice. Until then, just have fun and enjoy your friends.

How can I show them my success? Show Mint screenshot?

I only give financial advice to people who ask, and even then I have to be sure that they actually want some advice or I'll avoid answering. When working I was known as the guy who knew everything about our work pension so made spreadsheets for 3 or 4 people helping them decide when to retire.

The drummer in one of my bands owns a business and he's talking about selling the business and retiring. Since I know very little about his business income (other than he does quite well) my "advice" is limited to what him and his wife can expect from CPP and OAS, pulling their RRSPs, tax implications, and telling them about the 4% rule.

Ok.

I can't tell you how many times I tried to council my w*rk buddy about his spending. He's the one I've mentioned who is 77 and half a mil in debt. Every time he got $10K ahead in his 401(k) he'd pull it out and pay the tax and penalty. I can't count the number of times he refi'd his home for cash. Betting on Crypto investing would have been an improvement in his case. Too bad as the guy is a great friend. I will definitely die with the most money and he will die with the most toys. Maybe he's right and maybe I'm wrong. YMMV

Has he gotten sued?

I have a few friends, and coworkers that are curious as to why I'm retiring now and not waiting till the normal age 62/65. I have directed them to here to learn for themselves.
The best one Is a work partner I've know since she was a medic student. She had started a small 401K that she doesn't add to anymore... well a few minutes with a few online calculators, and a quick tour of FireCalc.... Shes wanting me to sit down with her husband and show him too...

They said it’s not guaranteed even FireCalc has 100% on many cycles.

My best friend was a spendthrift (new cars every 2 years, dining out regularly, well dressed, LOTS of guitars and amps, travel, etc. but no savings) and used to kidding me about my frugal behavior. I never found it necessary to say anything about his carefree spending habits or to try and convince him to consider the future. The last few years of his life he had to struggle just to get by. He had next to nothing except his guitars. He finally admitted that maybe he should have paid more attention to my example. Did it finally make a difference? No!


Cheers!

Did he change his stance?

When I was younger a surprising number of people I knew saw lotteries as better investments than the stock market. One "pearl of wisdom" from a co-worker that had a discussion with me on the topic: "yeah, if I did not buy lottery tickets I could put away a couple of thousand a year. But I'd miss out on a chance at these big pots that could solve my financial problems a lot quicker!" Okaaayyyyyy...

I don’t think he won the pot.

 

[ncbill]

I can't tell you how many times I tried to council my w*rk buddy about his spending. He's the one I've mentioned who is 77 and half a mil in debt. Every time he got $10K ahead in his 401(k) he'd pull it out and pay the tax and penalty. I can't count the number of times he refi'd his home for cash. Betting on Crypto investing would have been an improvement in his case. Too bad as the guy is a great friend. I will definitely die with the most money and he will die with the most toys. Maybe he's right and maybe I'm wrong. YMMV

Just think of all the cool toys you can acquire at cut-rate prices!

Both now and from his estate!

 

[F.I.R.E User]

Just think of all the cool toys you can acquire at cut-rate prices!

Both now and from his estate!

Wonder if the half mil is CC debt.

 

[pacergal]

Op--you can't convince others, they will do what they want.
If they ask for advice, feel free to give it, otherwise, everyone lives their own life.

What does it mean when you write "they want the traditional retirement"? Retire at 62 and collect SS?
Are they trying to get you to invest in crypto because they are having success with it now?

Follow your own plan and let them do theirs. You are not responsible for them.
Its always positive to help others, but only if they seek help themselves.

 

[F.I.R.E User]

Op--you can't convince others, they will do what they want.
If they ask for advice, feel free to give it, otherwise, everyone lives their own life.

What does it mean when you write "they want the traditional retirement"? Retire at 62 and collect SS?
Are they trying to get you to invest in crypto because they are having success with it now?

Follow your own plan and let them do theirs. You are not responsible for them.
Its always positive to help others, but only if they seek help themselves.

Traditional meaning 62-70 and SS but also blame our government. One will solely relying on Crypto to make them millions because they saw others make a lot on Dogecoin and others.

They tried to get me in Crypto. No success for them yet. They also said sites like these are obsolete.

 

[Koolau]

Wonder if the half mil is CC debt.

Good news/bad news on the CC debt front for my friend. Several years back, he did one of those credit "arrangement" deals where several of his CC companies forgave (IIRC) a total of almost $100K in debt! He was supposed to end up with a his and hers CC that could charge up to (IIRC) $500. Well, one thing led to another and soon enough, the two of them had gotten MORE CCs and charged up another $100K or so. In addition to that, he had an old house which he had sold on contract. Said house had been mortgaged, remortgaged, 2nd mortgaged, etc. until it wasn't worth the paper he owed on it. THEN the contract guy walked away and friend couldn't sell the house. In the mean time, he somehow managed to buy a NEW house. So his RE debt was close to $400K total.

Now, I do blame my friend for being a credit junkie, but what credit organization(s) give credit to him with his record?? YMMV

 

[F.I.R.E User]

Good news/bad news on the CC debt front for my friend. Several years back, he did one of those credit "arrangement" deals where several of his CC companies forgave (IIRC) a total of almost $100K in debt! He was supposed to end up with a his and hers CC that could charge up to (IIRC) $500. Well, one thing led to another and soon enough, the two of them had gotten MORE CCs and charged up another $100K or so. In addition to that, he had an old house which he had sold on contract. Said house had been mortgaged, remortgaged, 2nd mortgaged, etc. until it wasn't worth the paper he owed on it. THEN the contract guy walked away and friend couldn't sell the house. In the mean time, he somehow managed to buy a NEW house. So his RE debt was close to $400K total.

Now, I do blame my friend for being a credit junkie, but what credit organization(s) give credit to him with his record?? YMMV

Maybe he has good credit.

 

[Chuckanut]

I guess CC companies and mortgage companies can also be codependent.