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

[Bryan Barnfellow]

I've told the story before, about my neighbor, that took all his $200k out of stocks after 9-11–2001. About two years ago were setting at his kitchen table and he brought out his investment statement, and was wondering if things were all right. I looked it over and it was all in cash equivalents, these cash equivalents pay a little more than a bank deposit, but don’t keep up with inflation. I said, you don't have any stocks, he said yes, I look it all out of stocks after 9-11. I said you really should have some stocks! I tried to get him to just get his feet wet by investing $10,000. He wasn’t interested. I went home and calculated the gains he missed over those 18 years. His $200,000 would now be over $800,000 if he had invested in a simple Total Stock Market Fund, such as VTSAX. Then in the last 2 years his $800,000 would have grown to $1,080,000.

Such a life changing missed opportunity.
I have not told the neighbor about what he lost. He's in his middle 50s, it would just be to awkward to tell him.

I had a colleague at a former job where the 401k (403b actually) was extremely generous in the match, who, upon her 50th birthday announced that she was going down to HR to sign up for that particular benefit, now that she "was getting to that age to be thinking about it." I was completely astounded by her thinking. She had worked there for at least 20 years by that point. Such useless, avoidable loss. She was single, not well off, and lived alone, btw.

As our younger folk say, "I just can't..."

 

[captain3d]

Counter to this we all benefit as investors by the spending behavior of none investors. I always mentally thank new car buyers for providing me with future used car bargains whilst increasing my stock values.

Sad but true.

 

[F.I.R.E User]

I've told the story before, about my neighbor, that took all his $200k out of stocks after 9-11–2001. About two years ago were setting at his kitchen table and he brought out his investment statement, and was wondering if things were all right. I looked it over and it was all in cash equivalents, these cash equivalents pay a little more than a bank deposit, but don’t keep up with inflation. I said, you don't have any stocks, he said yes, I look it all out of stocks after 9-11. I said you really should have some stocks! I tried to get him to just get his feet wet by investing $10,000. He wasn’t interested. I went home and calculated the gains he missed over those 18 years. His $200,000 would now be over $800,000 if he had invested in a simple Total Stock Market Fund, such as VTSAX. Then in the last 2 years his $800,000 would have grown to $1,080,000.

Such a life changing missed opportunity.
I have not told the neighbor about what he lost. He's in his middle 50s, it would just be to awkward to tell him.

So he left $200k in the bank for last 20 years? Well, maybe he can invest now?

 

[rk911]

One of my friend says he wants to enjoy life now that he is young at 30 and has no interest in paying off his student loans and CC debt. He is the YOLO type.

brings to mind the fable of the grasshopper and the ant.

 

[F.I.R.E User]

brings to mind the fable of the grasshopper and the ant.

What’s a good comeback for someone making of my frugal lifestyle but they are living it up like a rock star?

 

[rk911]

It has been my experience that trying to tell others what to do with their money is a fool's errand. I can only tell them what I do and why. Maybe they'll want to emulate me, maybe not.

how to lose a friend or alienate a relative..

- go into business with them
- loan them money
- give investment advice...do this, do that, etc.

Gumby has the right idea.

 

[F.I.R.E User]

It's a nice goal, but realistically, the way people handle money is very personal. My thought would be to never tell them what they should do, but you can give a 20 second speech (no more than that unless they show more interest) explaining what you do and how it changed your life, along the lines of:

I keep my expenses low so I always get the company match on my 401k and invest every month in low cost index funds like Fidelity Zero or Vanguard Total market. At first, it was frustrating watching everyone else spend so much while nothing seemed to be happening with my money. Then one day I looked and said "hey, there's a lot of money there, if I keep going I will have a nice retirement, maybe even early."

Other than a short, positive speech about how good money habits have helped you, there's not much you can do.

To draw an analogy, imagine the reception you would get if you told overweight people that they need to diet and exercise - you might be right but would not be welcome very long!

True but they don’t want to wait decades. They want the money now.

 

[kgtest]

I've tried to "help/assist" quite a few people willing to listen with mixed results.

My DS that passed away...tried to help her with her returns, she didn't want it, but was smart enough to do ok without any help from me.
My other DS asked for my help after hearing me discuss my own solid results, then she got an attitude and no longer wanted/needed the help.
My DF got jealous at my returns about 5 years ago and literally handed over his investments/account logins to me...then, after I set him up similar to my asset mix decided to take on more risk..its fine, he also now is beating my returns so mission accomplished.
My Neighbor...didn't even own a PC, suggested he get invested...he did and then after starting out with ETFs/indexing drifted off into swing trading, only to get hammered and is now back to indexing.
My Friend...asked for my help, and his loud mouth drunk bro sort of interrupted the conversation stating he didn't need my help...he hasn't asked again.
My DW...took over her investments completely. I don't think she even logs into her accounts anymore but I could be wrong. Certainly has no interest in concerning herself with the management.
My Co-worker...asked my opinions of investing and proceeded to tell me his. I don't think his conservative risk tolerance is anywhere near mine.
My high school classmate...I pinged Facebook and asked if anyone wanted any help/advice on investing and she reached out and has been trying to setup a meeting over the past month or so but our schedules just don't mesh well with each of us with 3 small children who live in opposite ends of the city. We have a tentative date and I sent out a list of "terms" so they could circle a few to kick-off our discussion. I always start with Opportunity and the importance of paying yourself first...we will see how that goes but she mentioned they are planning a trip to Disney on the way to another destination so my concern is spending might be the culprit to lack of progress.

People listen for a little while, but ultimately will do what they want to do.

 

[Chuckanut]

So he left $200k in the bank for last 20 years? Well, maybe he can invest now?

Sure. Why not? Sell low, buy high.

Err.... Wait a minute. This is an investment strategy?

 

[Souschef]

What’s a good comeback for someone making of my frugal lifestyle but they are living it up like a rock star?

How about, "When I retire I will be eating prime rib while you are eating cat food when you retire"

 

[travelover]

how to lose a friend or alienate a relative..

- go into business with them
- loan them money
- give investment advice...do this, do that, etc.

Gumby has the right idea.

Very true. My niece asked for investment help and I discovered that the scheme her husband was invested in at work (fireman with a big city) with charging him over 3% just in overhead. His "advisor" had him sell everything in 2008 when stocks plummeted. I foolishly pointed out the they were getting hammered with fees and the advisor's advice sucked. Of course, the net result was they got mad at me for pointing it out, though I was as diplomatic as possible.

No good deed goes unpunished.

 

[Time2]

So he left $200k in the bank for last 20 years? Well, maybe he can invest now?

Well, it was two years ago when I suggested,"just get your feet wet by investing $10,000. He wasn’t interested." As far as I know still hasn't.

 

[Koolau]

I once let slip to my buddy the approximate value of our condo and he couldn't understand why I didn't take out loans on it and buy "stuff." After all, we live by the ocean. He went through all the "stuff" he would buy (boat, wave runner, cars, cruise, toys, etc.) I told him that I lived in my "toy" and was satisfied with it. He just shook his head like I was an idiot. Guess you can't argue with perspective and anyway, YMMV.

 

[aja8888]

I once let slip to my buddy the approximate value of our condo and he couldn't understand why I didn't take out loans on it and buy "stuff." After all, we live by the ocean. He went through all the "stuff" he would buy (boat, wave runner, cars, cruise, toys, etc.) I told him that I lived in my "toy" and was satisfied with it. He just shook his head like I was an idiot. Guess you can't argue with perspective and anyway, YMMV.

Koolau, all real men need toys.....yours is the condo! All is good!

 

[Extra Medium]

How about, "When I retire I will be eating prime rib while you are eating cat food when you retire"

Or, “Future Me is getting rich! Today Me isn’t really giving up that much, anyway “.

Or, smile to yourself and walk away.

 

[F.I.R.E User]

I had a colleague at a former job where the 401k (403b actually) was extremely generous in the match, who, upon her 50th birthday announced that she was going down to HR to sign up for that particular benefit, now that she "was getting to that age to be thinking about it." I was completely astounded by her thinking. She had worked there for at least 20 years by that point. Such useless, avoidable loss. She was single, not well off, and lived alone, btw.

As our younger folk say, "I just can't..."

She missed out on 20 years of 401k funds.

 

[F.I.R.E User]

I notice that people really work hard at their company and wanting to move up the ladder and get paid more more but won’t invest and spend like there is no tomorrow. At the end of the career, maybe after become a very high profile high level Executive they have no assets but SS to hang on to. Is this a successful person? Then you got entry level employees who invest and become millionaires.

 

[F.I.R.E User]

Sure. Why not? Sell low, buy high.

Err.... Wait a minute. This is an investment strategy?

He didn’t make much in the bank.

 

[F.I.R.E User]

How about, "When I retire I will be eating prime rib while you are eating cat food when you retire"

That’s the classic one. It’s actually dog food. But they said I won’t be young later either so they want to enjoy it while in youth.

 

[F.I.R.E User]

Sounds like your buddy is judgment-proof...sue him & he just files BK on everyone.

Counter to this we all benefit as investors by the spending behavior of none investors. I always mentally thank new car buyers for providing me with future used car bargains whilst increasing my stock values.

Sad but true.

I also in my mind say when I see a luxury car next to mine that he/she probably has monthly payments and I don’t. I only drive a 2016 Ford Fusion SE all paid off with just 37k on it.

 

[F.I.R.E User]

I offered my friend to use Mint. He wasn’t into it.

 

[BadAtGolf]

I can give you some thoughts from someone who is new to the FIRE idea/community.

I don’t want to offend anyone or start a fight, but after reading this forum for a few weeks there is a sense that many people hate their jobs. I think it’s important to understand that not everyone is miserable at work. I know that’s not the only reason to RE, but it sure seems to be a common theme.

It’s cool that you want to help your friends. But, as many others have already stated, it’s tough to change people’s minds. I think that sharing your enthusiasm, your goals, and your plans would be a gold way to educate them without being overbearing. I have to assume that hearing a similar aged buddy talk about retiring early, traveling, buying a vacation home, or whatever you’re doing, will pique their curiosity more than any book recommendations, podcasts, or numbers would.

 

[F.I.R.E User]

I love my job. It’s all about the right mindset and reminding myself about this beautiful journey.

They want to have fun now and do not care about old age fun.

I can give you some thoughts from someone who is new to the FIRE idea/community.

I don’t want to offend anyone or start a fight, but after reading this forum for a few weeks there is a sense that many people hate their jobs. I think it’s important to understand that not everyone is miserable at work. I know that’s not the only reason to RE, but it sure seems to be a common theme.

It’s cool that you want to help your friends. But, as many others have already stated, it’s tough to change people’s minds. I think that sharing your enthusiasm, your goals, and your plans would be a gold way to educate them without being overbearing. I have to assume that hearing a similar aged buddy talk about retiring early, traveling, buying a vacation home, or whatever you’re doing, will pique their curiosity more than any book recommendations, podcasts, or numbers would.

 

[aja8888]

I love my job. It’s all about the right mindset Ave reminding myself about this beautiful journey.

They want to have fun now and do not care about old age fun.

Old age fun is generally hard work... (you feel it the next day)

 

[F.I.R.E User]

Old age fun is generally hard work... (you feel it the next day)

Yes but lot the younger generation don’t want to think about that now.