16 years old, need advice on retirement investments.

[justin]

Talk to your father or other older friends about their living expenses. When I was 16, I didn't have a good understanding of what things cost.

I'm talking about stuff like:

car insurance
car payments
car repairs
property tax on cars
gas
food and toiletries
clothes
health insurance, copayments, deductibles
dental insurance and dental treatments and office visits
income tax (state and local), social security tax and medicare tax

if you ever move out:
rent/mortgage
property tax on a house
insurance on a house
utilities (water/sewer/electric/cable/internet/gas)
a new roof or other "one-time" maintenance things (you're handy - may be close to free)

Then you have the non-essentials:
entertainment
dining out
decent clothes
bling (whatever it means to you - plasma tv, phat rims on your car, gold chains, aggressive growth mutual funds)
gifts for others - christmas and birthdays
dates (women can be expensive)
raising children (probably not on your radar now, but it may be in 10 years)
vacations/travel

Welcome to the board. You can learn lot here about investing and "adult" life in general.

It isn't clear from your posts, but have you ruled out going to college? $15/hr may seem like a lot, but college can open up many doors to much higher pay.

 

[Nords]

Hey!  I am 12 and I plan on retiring in 2 years with a mil.

You heard about the teenager who didn't want to work and whose parents wanted him out of their house?

They compromised. They gave him all the money in his college fund, so he moved out and ER'd.

 

[unclemick]

Hmmm

I was in the 7th grade when an Aunt(aka the Swedish maid) left my Father about 20k (1955 dollars) in mutual funds - which he promptly sold since he knew from the Great Depression all stocks were bad.

That's when I went to the library and started reading about mutual funds - and try to understand how a maid could save 20k over her lifetime.

Never invested until 1966 - first job out of college.

 

[wildcat]

Just because I'm 16 means I can't have the same general ideas you guys have? How does wanting to plan for retirment mean I don't have a "life". I just don't want to be working until I'm 60 years old, and I'd like to find out the best way possible to retire with enough money as early as possible..thanks for the posts guys.

Hmm Monday, 16 yrs old, post pops up during the day ---- no school or full of sh!t?      

 

[thefed]

i dunno. dont be so hard on him.


when i was 17 i had a year by year plan to hit one million dollars, at which point i would retire.

it involved an American funds mutual fund i invested some $$ in, a lot of compund interest, and some real estate investments.

im 22 now, i rolled that fund into several retirement accounts, and I have already bought 2 homes with my own money and credit. no help whatsoever form anyone else.

So being 16 and thinking baout saving money ISNT that outrageous

 

[justin]

Hmm Monday, 16 yrs old, post pops up during the day ---- no school or full of sh!t?

Well, it was posted during a typical high schooler's lunch time. Or he may have a blackberry or a laptop with wireless internet. Or he's in the library computer lab. Maybe he's in year-round school and he's on the off-rotation weeks now. Cynics!

 

[retire@40]

I don't know why people here are so concerned about whether someone is "real" or not. Just look at it from the facts provided and either respond or don't respond to those facts. The kid might have a better head on his shoulders than some adults here.

I'm trying to teach my kid about financial independence and he's way under 16. Hopefully, by the time he's 16, he'll have a better understanding than other kids his age as to why FI is so important.

 

[If.]

"It isn't clear from your posts, but have you ruled out going to college?  $15/hr may seem like a lot, but college can open up many doors to much higher pay."

  Well it may not be the best pay, but once I graduate I get atleast 1$ every six months unlimited. If I went the college route, I would have to spend a lot of money(whether its directly or a student loan or whatever), waste a few years when I could be working full time, and not be guarenteed a job. Most of my "dream jobs" would require me to be away for a long time, and not a lot of available spaces. I would dread working in an office for a good portion of day for 5 days a week. I love being outdoors working with my dad, making some money, and learning the trade. I do love learning, so I was thinking when I early retire, to go to some college classes.

    And for the person wondering why I posted on a monday during school hours, I was in 4th period, which is my study(they just stuck me with a study when I dropped an unnecesarry third-year of a language), in the library, which has computers..

    Justin, about the "costs-of-living", I sat down with my dad and asked him the estimated costs and added them up and still left some money left for other things, but one thing I am still not sure on is taxes. No adults I know, know a lot about taxes, like brackets and other things. I've been looking online for ALL taxes you NEED to pay in New Jersey, and it is just too confusing with some sites saying different percentages and stuff, and then whatever deductions and all that, do you know any good sites on taxes or have any advice? Thank you.

EDIT: If the taxes are just federal income tax, state income tax, social security tax, and medicare tax, that adds up to about 1/3rd of my income.. so if I make 30,000 one year, 10,000 goes towards taxes? That doesn't sound right..

 

[justin]

Well it may not be the best pay, but once I graduate I get atleast 1$ every six months unlimited.

Justin, about the "costs-of-living", I sat down with my dad and asked him the estimated costs and added them up and still left some money left for other things, but one thing I am still not sure on is taxes. No adults I know, know a lot about taxes, like brackets and other things. I've been looking online for ALL taxes you NEED to pay in New Jersey, and it is just too confusing with some sites saying different percentages and stuff, and then whatever deductions and all that, do you know any good sites on taxes or have any advice? Thank you.

Although you say that you are guaranteed a $1 raise every 6 months, your father has to compete on the same level that other siding installers do. He can't operate a business profitably if his labor costs are much higher than others. I don't know if the wave of cheap immigrant labor (primarily Mexican) has hit your area, but they work for much less than $15/hr around here. So five years out, your dad is paying you $25/hr when he could hire someone else for $10/hr?

I know you want to trust your father, but he can't promise to give you high raises forever.

I don't know how much you've studied economics and markets and businesses (I didn't know much about that when I was 16). Consider what happens if the housing market slows down and nobody needs new siding installed. How will you shift to a new type of employment? A college degree (or a broad skill set) allows workforce flexibility.

I'm not saying you have to go to college. I just want to make sure you have considered that idea and rejected that idea. I have a relative about your age that is facing the same choice as you - work at his father's business for decent money or go to college (community college or 4 year). It can be hard to sacrifice 4 years of good earnings to go to college. I can tell you that most of my buddies that graduated with a bachelor's degree in construction management (closest to your current field of interest) are making $60k/yr easily when you add in benefits. But hey, it is your life, and you are old enough to make your own decisions now!

In regards to taxes - count on 7.65% of what you make going to SS and medicare. If you are "self-employed", you pay an extra 7.65% for that. Federal and state income taxes (maybe local taxes in NJ - don't know) are based on your income. The more you make, the higher your taxes are. Not sure of a good reference for learning about taxes.

 

[HFWR]

http://www.irs.gov/individuals/index.html

 

[If.]

Well first of all, he wants help, but he is a "perfectionist" and never wanted anyone out of the family to help(he wouldn't trust anyone else to do as good of a job). He is currently training, it's not a hard job most of the time, just a lot of stuff to learn, sometimes time-consuming, and a little physically demanding at times. Having an extra helper knowing what he is doing without being trained full time(maybe 3 years out of high school for me), and say for example there is 4 equal sides on a house, and it would take for example 8 days for him to finish it, now with me, it might only take 4 or 5 days, considering I would be working on one side, while he is on the other. He would make almost double what he makes, and pay me maybe 1/4th of that extra money. So he is making 3/4ths as much as he would by himself. He would rather pay the extra money to have a trained-by-him relative, and know the money is going to good use, rather just to pay someone else he doesn't trust or know as much as me. And about is the business starts slowing down or whatever, every single year he works he has to turn down numerous jobs just because he doesn't have enough time to do them all. He does siding, windows, doors, and he knows how to do a lot of other stuff really well if that ever declines in demand, for example like roofs, decks, stuff like that, but in the 30 years he has been working his job, he has never once not had enough work.

 

[BigMoneyJim]

Wow, tough crowd! Some or all of you should know better than to argue with a 16-year-old's vision.

Everyone changes a lot between 16 and 25 in particular. Enjoy the ride and don't take things too seriously.

Here's an old thread I started in response to a 12-year-old posting a retirement question. There's some good advice in there for 16-21 year olds. Basically stay out of debt and save some money and you'll be way way ahead of the game.

 

[riskadverse]

If you're really 16, and I have no reason to believe you're not, then you just need to learn how to invest. Judging from your writing, it shouldn't be too hard for you to teach yourself how. Since you are so young, any money you invest now will compound so effectively, that you should be on easy street before you know it.

 

[azanon]

Just because I'm 16 means I can't have the same general ideas you guys have? How does wanting to plan for retirment mean I don't have a "life". I just don't want to be working until I'm 60 years old, and I'd like to find out the best way possible to retire with enough money as early as possible..thanks for the posts guys.

My only point which i made harshly (i'm known to do that), is that retirement should be a minor concern for you right now, and way down on the list in terms of priorities.  That you are becoming (are) educated on the virtues of saving and compounded growth at such a young age is wonderful, and if you start saving some now of what you make and dont touch it, you'll have the opportunity to see miracle compounded growth.

But man, you're 16!   I say that excitingly!  What about the pretty girls!  What about college life coming up? (if that's in your plans).   Also, to retire, you first need a means of income/occupation unless someone's just going to give you 2 mil+.   These things need to come first and should be whats at the forefront of your mind.  Once you start making money (several years from now), your focus is going to be on short term expenditures;  house, car, insurance, etc.  and those things will need funding and then maybe you can try to save a little on the side.

Back to what i was saying, you need to focus on engaging in life right now, which will put you in the workforce, not focusing on how to disengage (aka retire) before you've even started! 

Retiring means leaving a job you previously had for sometime to not work.  You haven't even (really) worked yet.   The horse goes in front of the cart, not behind it.

Azanon

(i am off work today, so dont give me no crap)

 

[Jane_Doe]

If.,
Welcome to the forum! My husband is originally from NJ and had a roofing and siding business there before we married and moved away.

First, for those of you not familiar with construction, and NJ prices, $15/hour is a starting wage for helpers and in a few years, assuming this young man is hard working and learns the trade well, his dad will be happy to pay him well at $25 hour.

If., you sound like you have a good head on your shoulders. Maybe someday you will be able to take over some of your dad's duties and allow him not to work quite so hard. Meanwhile, maybe you could work with your mom regarding getting them onto a better financial path. You would really be doing them a favor. It's never too late to start.

Life will change some of your plans for you (meeting a nice girl?) and you will grow to change some on your own. But, if you carefully manage your finances regardless of what life throws at you, you will be better prepared to handle what comes your way. Don't, however, just live to save up like a miser. Reward yourself along the way - take a trip to Central America or at least start a savings fund for that trip to give yourself something to look forward to besides your financial independence goal.

Well, that's my 2 cents worth. Wishing you well - you CAN do it you know!

Jane

 

[yelnad]

If, welcome and congrats on thinking ahead!

[According to a simple google search, If is the age he says he is].

 

[retire@40]

...retirement should be a minor concern for you right now, and way down on the list in terms of priorities.  That you are becoming (are) educated on the virtues of saving and compounded growth at such a young age is wonderful, and if you start saving some now of what you make and dont touch it, you'll have the opportunity to see miracle compounded growth...

I agree that for a 16 year old, retirement should be a minor concern, but FI should be a top concern.  One allocation method I would recommend is 60/25/15.  That is, 60% for savings, 25% for spending on things like cars, and 15% to spend on the pretty girls.

 

[cube_rat]

If, welcome and congrats on thinking ahead!

[According to a simple google search, If is the age he says he is].

Yep, here's his profile on an astronomy forum based on his email address:

Username: Bestrafemich00
Real Name:

Age: 15

Country/Location: USA/Northern NJ

Gear:


Email: bestrafemich00@yahoo.com

Website:

Comments:

How I found the ADP:



Sorry some of us doubted you. It's hard to believe that a 16 year old would want to hang out with a bunch of old geezers to discuss investment strategies.

 

[If.]

No hard feelings for those who doubted me, but anyway yea you guys are kind of right with it being a minor thing in my life now. I'm just kind of scared if I retire at like 60 that I won't be physically fit enough to do all the stuff I want to when I retire, but I also think that if the limited money I'm making right now can go towards things that I can enjoy during my working years, I can still have fun and make a lotta money. Maybe I'll go with something simple like an IRA or 401(k) and max it out each year and put any extra I want to put towards retiring to CD's or something, I'll figure it out when the time comes. Sorry if this is a rude question, but do any of you guys feel physically or mentally "tired" or "old" at your age? That is my main worry, that when I do retire, I'll be too "old" to have fun and enjoy life. Thanks a lot guys.

 

[MasterBlaster]

It used to be Wine, Women, and Song... Now it's Beer, The Old Lady, and TV.


I guess your question should be " Do children in childhood have as much fun as adults in adultery ? "

And of course the answer is no they do not !

Seriously though, What is fun and enjoyable is very different to a 16 year old than to someone approaching retirement.

If I could give you but one piece of advice it would be to keep balance in your life. Work some, play some, spend some, and save some. If you are smart about how you save then it will pay off in spades.

 

[lets-retire]

Yes I feel very old. When in the military I trained with the additude that I should dread working past 20 years. I was VERY hard on my body (military service is). I am now starting to pay the price and I'm only in my mid 30's

 

[riskadverse]

"Sorry if this is a rude question, but do any of you guys feel physically or mentally "tired" or "old" at your age?"

Only when a 16 year old girl walks by.

 

[Nords]

Sorry if this is a rude question, but do any of you guys feel physically or mentally "tired" or "old" at your age? That is my main worry, that when I do retire, I'll be too "old" to have fun and enjoy life. Thanks a lot guys.

I'm 45 but mentally I feel about 25. To me the question isn't "when" I'll grow up but "if". I do feel physically & mentally tired in my third hour of surfing or my second hour of tae kwon do. But if we had good Thai massages available at either of those activities, it wouldn't be a problem.

You know that saying "Ah, if I was just 16 again knowing what I know now?" Aside from the occasional knee or ankle sprain, I'm in far better shape now than when I was 16. And I still know that stuff!

But your point is well made. The sooner you achieve FI, the sooner you can make your own decision about ER. If you have a plan and you make your goals, then it's not worth deferring your dreams to work "just one more year".

 

[MooreBonds]

But man, you're 16! I say that excitingly! What about the pretty girls! What about college life coming up? (if that's in your plans). Also, to retire, you first need a means of income/occupation unless someone's just going to give you 2 mil+. These things need to come first and should be whats at the forefront of your mind. Once you start making money (several years from now), your focus is going to be on short term expenditures; house, car, insurance, etc. and those things will need funding and then maybe you can try to save a little on the side.

What, you mean piss away his money on self-centered, manipulative women who only want someone to throw their money at them?

Sure, there are some good females out there, If., but by all means - I spared myself the experience of showering them with money/fun. I'm catching up later in life, as I've finally met the perfect one...but don't feel pressured into following the footsteps of your peers who can't think farther ahead than what party to go to Saturday night, and how to take a $20 from their parents' wallets without them noticing.

Back to what i was saying, you need to focus on engaging in life right now, which will put you in the workforce, not focusing on how to disengage (aka retire) before you've even started!

Retiring means leaving a job you previously had for sometime to not work. You haven't even (really) worked yet. The horse goes in front of the cart, not behind it.

Azanon

(i am off work today, so dont give me no crap)

Azanon, I understand your argument, but realize that there are some of us out there who get a thrill out of planning ahead. I'm an extremely strong INTJ, so planning ahead is about the same to me as hopping on that wicked-ass fast bike of yours and going for a ride.

Perhaps If. is more than willing to sacrifice for today's fun in exchange for a very secure, enjoyable life away from work? Sure, you have to balance out fun and sacrifice, but I wouldn't change a damn thing from my tightass teenage years. I'd recommend that you save your money, If., until you're just a wee bit older to truly remember and treasure some great experiences in life. I went on a tour of Europe when I was 14 with a few family members, and I was way too young at the time to fully enjoy it later on (wasn't mature enough, didn't pay attention to things I would today, etc.).

Have you talked to your old man about retirement account options for his company?
--Peter

 

[brewer12345]

Sorry if this is a rude question, but do any of you guys feel physically or mentally "tired" or "old" at your age? That is my main worry, that when I do retire, I'll be too "old" to have fun and enjoy life. Thanks a lot guys.

Its actually a very astute question. I said to my wife last week that I feel old, so maybe I should look it. I'm 32 and I am a long way from how I felt at 16, energy-wise. Part of it is the natural aging process. Part of it is just my current lifestyle. I'm working pretty long hours, and when I come home there is ots of stuff to do, plus helping take care of a 17 month old daughter and my pregnant wife (who is very exhausted all the time these days). Before all this, I was working full time and going to grad school at night, plus I was pursuing a professional designation that took mucho tie to do.

So where am I going with all of this? Simple. When I get a chance to take it easy (vacations, etc.), I still feel great. However, I have a lot of responsibilities and work to do simply as a result of pursuing my career and having a family. You will likely end up in the same boat. So I'd like to offer you a bit of advice:

- Enjoy your free time while you have it. You will be very busy later in life.

- Get a good start on saving money as early as you can. I started at 24 and I expect to retire sometime between 40 and 45. If I had started at 16, it would have been amazing.

You clearly have a good head on your shoulders. Use it, but don't forget that life is meant for living.