Author Topic: How can a 17 Y/O start his journey to FI?  (Read 13759 times)

precrime3

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How can a 17 Y/O start his journey to FI?
« on: May 11, 2016, 01:59:39 PM »
Greetings Mustachians,

I found this website after an afternoon of googling future careers, index funds, etc. I found this website and was hooked. A couple days of binge reading later, I've gone through about 80% of the posts and want to know how I could apply this to my situation.

Like the title says, what can someone that is just starting their financial career do it in a way that leads to FI? I'll be getting my first physical job (I've freelance wrote articles on the internet for 2 years, didn't save any of it)in a month or so moving boxes for a moving company part time at a starting rate of $12- $14, as well as starting an IRA through Betterment/Wealthfront and be putting at least 70% of each paycheck into there.

I'm not in any debt, I just don't want to work as a wage slave for 40 years.

EDIT due to replies commenting about college: I won't have to pay a cent for college (or at least, very little) due to my academics. I'm blessed with a 31 on the ACT, which should get me a meal plan, tuition, boarding, at Jacksonville State University, where I plan to attend. My parents will be covering what minimal expenses I do have, and giving me the funds that they had saved up for my college expesnse, but won't be needing. I estimated this to be around $40,000 - $50,000 as they will not give me a an exact number.

Am I too early to be concerned about early retirement? What should I know? Any pieces of advice?

Any and all feedback is appreciated.

EDIT:

Investing Questions/Thread: http://forum.mrmoneymustache.com/investor-alley/how-does-a-minor-start-with-getting-invested-(investing-questions-also)/

Journal: http://forum.mrmoneymustache.com/journals/17-yos-journal-path-to-fi/
« Last Edit: May 20, 2016, 09:23:35 PM by precrime3 »

onlykelsey

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Re: How can a 17 Y/O start his journey to FI?
« Reply #1 on: May 11, 2016, 02:03:51 PM »
I'm in my late 20s but started my own IRA as a teenager and wish I had had more guidance.

I think one thing you should consider is what effect savings will have on your college scholarship package (if you plan on attending).  I saved a lot of money in a savings account in high school and it was wiped out by my college tuition the first semester.  I'm not an expert, but I think you should be able to put money either in a IRA or a 529 college savings plan and get tax benefits plus perhaps more favorable treatment from financial aid offices.

patchyfacialhair

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Re: How can a 17 Y/O start his journey to FI?
« Reply #2 on: May 11, 2016, 02:11:21 PM »
Late 20s here:

-Lift with your legs. Don't hurt yourself too early in your life.
-Work hard at work and/or school.
-If you plan to go to school, do a serious cost/benefit analysis for your chosen major.
-That being said, don't major in something that's usually unemployable like art, music, or theater.
-Go to class. Seriously. This was my issue my first year of college.
-If you're not going to school, do the same cost/benefit analysis of your chosen field based on what you'll have to spend on trade schools or costs of credentials.
-Keep your spending on your housing and your transportation low; keeping a high savings rate is easy if you keep those two in check
-Have fun with life, and don't be obsessed with retiring early. Find something you're good at and work hard at it; money-savin' will be an inevitable result if you're frugal regardless!

lthenderson

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Re: How can a 17 Y/O start his journey to FI?
« Reply #3 on: May 11, 2016, 02:18:09 PM »
It's never too early to start thinking about retirement. I wish I had done so at your age. My tips in order of importance:

1. Pay yourself first, i.e. put money into your savings/retirement account first and learn to live on what's left. Save as much as you can.
2. Live beneath your means. Just because you can afford something, do you really need it. Just because others your age have expensive cars or huge houses, do you need one. If you are always weighing every dollar that goes out with how much longer you will have to work, you will be on the right track. Read "Millionaire Next Door" for tips on how to live.
3. Invest wisely. Read "Bogleheads Guide to Investing" for tips on how to do so.
4. When the time comes, marry someone who is financially like you and has similar retirement goals.

Tester

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Re: How can a 17 Y/O start his journey to FI?
« Reply #4 on: May 11, 2016, 02:31:36 PM »

-Lift with your legs. Don't hurt yourself too early in your life.
-Have fun with life, and don't be obsessed with retiring early. Find something you're good at and work hard at it; money-savin' will be an inevitable result if you're frugal regardless!

Both apply.
- don't stress about savings too much or you will lose the beauty in life.
- take care of your health, you won't be able to get it back - and believe me that even if now you can do anything you won't be able to do everything in 20 years.
Now one more:
- try to not depend on your job for surviving. Keep your freedom, you still have it at this age. I know it is hard/impossible for a while, but try to do it.
I am not talking about being too selfish to keep your freedom (marriage and having kids takes away a lot of the freedom, but I am not talking about that freedom :)).

I had a (good?) habit of thinking of the worst thing which could happen in a situation and finding a plan of action to solve that worst case. That made me confident I can get over it.
I lost that in the last 8 years as I plunged too early in building a house on credit...now I am getting back to that confidence, but it affected my life.
I ended up relying on my job to pay the debt and that meant I had to live with some management decisions I did not like for the last several years (not to mention the awful manager I had during the last year).


precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #5 on: May 11, 2016, 03:23:29 PM »
Late 20s here:

-Lift with your legs. Don't hurt yourself too early in your life.
-Work hard at work and/or school.
-If you plan to go to school, do a serious cost/benefit analysis for your chosen major.
-That being said, don't major in something that's usually unemployable like art, music, or theater.
-Go to class. Seriously. This was my issue my first year of college.
-If you're not going to school, do the same cost/benefit analysis of your chosen field based on what you'll have to spend on trade schools or costs of credentials.
-Keep your spending on your housing and your transportation low; keeping a high savings rate is easy if you keep those two in check
-Have fun with life, and don't be obsessed with retiring early. Find something you're good at and work hard at it; money-savin' will be an inevitable result if you're frugal regardless!

1. Thanks for that, I weightlift 4x a week , so should be adequate enough but can never be too safe!
2. How do you conduct a cost/benefit analysis if college is basically free?
3. I'll be majoring in business, with a focus on either management (information systems), marketing, or Finance (I've figured out I enjoy reading about index stocks, compound interest, etc.).
4. I'm aiming to be in walking/biking distance of my job and stores once I do get a full-time job.
5. Will do. While I won't freak out if I don't retire at 30 like MMM did, I don't want to be bound to a desk is all.

ketchup

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Re: How can a 17 Y/O start his journey to FI?
« Reply #6 on: May 11, 2016, 03:36:00 PM »
2. How do you conduct a cost/benefit analysis if college is basically free?
Not all costs are measured in dollars.

Housing and transportation are the two big areas that can make or break you.  Don't buy a car unless you absolutely absolutely need one, and if you do, buy the cheapest, most reliable car you can keep running until you're making good money.  Don't buy a house without a good reason: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/  It can make sense, but is not objectively always better than renting.  Buying a house could be very very good long term if you do something wacky like buy a 3 bedroom house and rent out the other two rooms.  If you play your cards right, that can lead to living for no or very low rent while your roommates pay down your mortgage for you.  Be creative.  Run the numbers.  Run all the numbers.

precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #7 on: May 11, 2016, 03:41:28 PM »
2. How do you conduct a cost/benefit analysis if college is basically free?
Not all costs are measured in dollars.

Housing and transportation are the two big areas that can make or break you.  Don't buy a car unless you absolutely absolutely need one, and if you do, buy the cheapest, most reliable car you can keep running until you're making good money.  Don't buy a house without a good reason: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/  It can make sense, but is not objectively always better than renting.  Buying a house could be very very good long term if you do something wacky like buy a 3 bedroom house and rent out the other two rooms.  If you play your cards right, that can lead to living for no or very low rent while your roommates pay down your mortgage for you.  Be creative.  Run the numbers.  Run all the numbers.

My parents are giving me their Honda (2011/2012) CRV, not sure what trim. Has around 50k miles on it, I expect that number to be closer to 80-90k once I graduate. It'll be paid off, so should I keep it or sell it and purchase something more appropriate?

Regarding cost/benefit analysis: Still have no clue how to conduct one :p. Can you give me some pointers?

justplucky

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Re: How can a 17 Y/O start his journey to FI?
« Reply #8 on: May 11, 2016, 04:51:12 PM »
A job making a decent living should be the goal for college; graduating college shouldn't be an end unto itself. Make decisions accordingly and don't underestimate the power of internships and networking -- getting your first real job will likely hinge on those things, and you'll probably never have a better opportunity to do those things than in college. You are the only person you can count on to ferociously advocate for your own career.

I had an internship in college, but it wasn't one that had any potential to lead to a job. I worked a dead-end job for two years after college. It took me five more years after that to get in my current position. I am only making $90,000 a year now because my company is very much pro-promoting from within and I was able to do a paid internship with my current team.

You can have skills, you can be smart, but if you don't have the opportunity to show someone you can add value to whatever they're doing with those skills, that isn't helpful for you financially.


patchyfacialhair

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Re: How can a 17 Y/O start his journey to FI?
« Reply #9 on: May 11, 2016, 05:59:16 PM »
Late 20s here:

-Lift with your legs. Don't hurt yourself too early in your life.
-Work hard at work and/or school.
-If you plan to go to school, do a serious cost/benefit analysis for your chosen major.
-That being said, don't major in something that's usually unemployable like art, music, or theater.
-Go to class. Seriously. This was my issue my first year of college.
-If you're not going to school, do the same cost/benefit analysis of your chosen field based on what you'll have to spend on trade schools or costs of credentials.
-Keep your spending on your housing and your transportation low; keeping a high savings rate is easy if you keep those two in check
-Have fun with life, and don't be obsessed with retiring early. Find something you're good at and work hard at it; money-savin' will be an inevitable result if you're frugal regardless!

1. Thanks for that, I weightlift 4x a week , so should be adequate enough but can never be too safe!
2. How do you conduct a cost/benefit analysis if college is basically free?
3. I'll be majoring in business, with a focus on either management (information systems), marketing, or Finance (I've figured out I enjoy reading about index stocks, compound interest, etc.).
4. I'm aiming to be in walking/biking distance of my job and stores once I do get a full-time job.
5. Will do. While I won't freak out if I don't retire at 30 like MMM did, I don't want to be bound to a desk is all.

If college is free, then the other side of the equation is all benefit. Sure, you could look at a plastic surgeon vs a social worker and see that the equation tells you to become a plastic surgeon. You mention various business emphases. Pick one that makes you the happiest, that you're also good at...then profit. Don't worry if you change your major though. Most of us do/did.

As a businessperson, you can pretty much use any numbers or statistics to confirm or reject an idea. Do the same with a cost benefit analysis 😀  Please excuse the brief response. Typing on my phone

2Birds1Stone

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Re: How can a 17 Y/O start his journey to FI?
« Reply #10 on: May 11, 2016, 06:07:09 PM »

1. Thanks for that, I weightlift 4x a week , so should be adequate enough but can never be too safe!
NICE! Keep it up!

2. How do you conduct a cost/benefit analysis if college is basically free?
Congratulations! Getting free college is a huge advantage for you

3. I'll be majoring in business, with a focus on either management (information systems), marketing, or Finance (I've figured out I enjoy reading about index stocks, compound interest, etc.).
I work in Enterprise software sales where I interact with lots of IS managers, the $$ is great but it could be high stress. Finance in college and personal finance are completely different things. A BA/BS in Finance will be more of an accounting degree.

4. I'm aiming to be in walking/biking distance of my job and stores once I do get a full-time job.
Great planning!

5. Will do. While I won't freak out if I don't retire at 30 like MMM did, I don't want to be bound to a desk is all.
As early as you're getting into the game you are going to be just fine!!

Comments in bold.

Cpa Cat

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Re: How can a 17 Y/O start his journey to FI?
« Reply #11 on: May 11, 2016, 06:40:23 PM »
#1 Make it a ROTH IRA- at your income level, there's no grand benefit to a traditional IRA.

#2 When you hit college, make academics your #1 priority. It's not worth risking letting your grades slip and losing your scholarships over a part-time job. When you're on a full ride, school is your job. Also, in business school, great grades open the doors to the best interviews/job opportunities. Take the time to do an internship or two.

#3 As others have said - take care of yourself with manual labor. Don't get overconfident just because you're young and lift weights! You can do lifetime damage if you don't lift properly and address any injuries.

The biggest strides you'll make will be when you graduate. But hey - you'll be hitting the ground running with a business degree and no student loans!

HydroJim

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Re: How can a 17 Y/O start his journey to FI?
« Reply #12 on: May 11, 2016, 07:10:58 PM »
I'm 19 currently so not too far off from you. I just finished my second year of college. I started thinking about financial independence after just turning 18 during my freshman year of college.

Similar situation here:
-35 ACT so full tuition + housing at my college. I also receive pell grant money and outside scholarships so I get a refund of about $6k/yr from my school.
-Always pretty frugal so I came into college with a decent chunk of change. Currently have $10,500 in my Roth IRA. Stick to Vanguard and invest in VTSMX/VTSAX.
-Don't be afraid to work in college but don't let it impact your grades. I'm making a ton from engineering internships over the summers and part-time engineering work during the school year.


My tips:
-Definitely apply to outside scholarships if you fit their criteria. Easiest money ever. I spend maybe 1 hour per application and most are $500 or $1,000 or more. Do keep in mind you'll be taxed on all scholarships in excess of tuition and "education expenses". Housing and food are not educational expenses.
-Put your money into a Roth IRA with Vanguard.
-If your parents really give your $40-$50k, make sure y'all do your homework and avoid tax penalties and such. See if you can roll that money into some kind of tax sheltered account. If not, starting yourself a taxable investment account isn't necessarily a bad thing. I just don't have the money or reason to at the moment. When I graduate and get real income, then I'll have to start thinking about that.


Random thoughts:
-You're lucky to be in the situation you're in. Sounds like your family is more well off than mine so pretty cool your parents are able to help you with college, give you a nice car, and get you started off financially.
-Keep hitting the weight room every day. College is gonna make your life busy depending on which you take on but make sure you don't stop hitting the gym.
-As someone stated above, you could do really well becoming a landlord in college. That being said, it would have to be well planned and researched. It may not totally be worth the time and effort

Vehicle:
Might as well keep the vehicle unless your parents are okay with selling it and moving you into something a little more economical. CRVs are not bad though and having an SUV can be convenient sometimes.

Cyaphas

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Re: How can a 17 Y/O start his journey to FI?
« Reply #13 on: May 11, 2016, 07:27:31 PM »
Here we GO:

Don't have children until you're at least 25.

Don't mix family/friends and money. Don't rent a house to family or friends. Don't start a small business with family/friends.

Find a career where you can comfortably save over $40k per year. Always take into account geographic cost of living, including taxes, relative to income in the areas you're looking.

Don't take on debt unless you can clearly present a net profit to you from said debt.

Try to save at least 1/2 of your paycheck. At your age you should probably just drop it into VTSAX. IRA, 401k preferably. Then FORGET about it. Don't listen to market news.

Do not buy a house until you're sure you're going to be in an area for more than 10 years. This will most likely be after you're 25. NEVER buy a house without putting a lot of thought into it. Even though you may be, try to have someone who is financially practical and competent with you through the whole process. Make sure that person has your best interests in mind.

Don't be afraid to look at craftsmen jobs, electricians, machine operators, trade unions. A lot of them are paid very well and they're not stuck in an office all day. They also don't require near as much money in schooling/qualification.

Make sure you live within short biking distance to work and the grocery store. Automobiles are expensive and the less you use/own/maintain one the quicker you can reach FI.

Think of payments in decade format not monthly. $10 per month doesn't seem like much. $1200 seems like a lot. Is Pandora worth $600 over 10 years? Is Netflix worth $1200 over 10 years? $100/month phone bill is $12,000 dollars over 10 years.

Avoid consumerism at all costs. Before you buy something, consider, do I really NEED this. There's nothing wrong with buying luxuries for yourself, but you need to know they're luxuries. Never buy anything over $40 that you haven't been considering purchasing for at least a couple of days. Did you need it yesterday? Than why must you have it today?

Eating out, try to limit yourself to once a week. Find a happy hour places that serve cheap appetizers. Split them with friends.

Create little challenges for yourself. 1 month of not eating out. $30 weekly meal plan challenge. Walk to work/school every Monday for a month. Things of that nature. Create the challenge and track it. Hold yourself accountable.

Have fun. Don't burn yourself out. Go on trips. See the world. It's not as expensive as a lot of people make it out to be. NEVER travel on debt. Save up and THEN go on the trip.

I think of debt as a form of modern slavery. Other than education and a home purchase, there aren't a lot of other good reasons to take on debt.

Rent to own, avoid it at all costs. I've never come across a financial transaction where rent to own wasn't a complete rip off.

Be thrifty, thrift stores can be a great place to find casual clothing or even business dress for a very low cost.

Try to have a few hobbies and stick to them. Collecting hobbies gets expensive.
 
If a family member asks you for financial assistance give it to them as a gift, not a loan. If it's too much to give as a gift, than you sure don't want to give it to them as a loan. Make sure you're not giving drugs to a drug addict.

Don't get discouraged when everyone else tells you you're crazy. You can do this. This can be your reality. Study your finances. Make a plan. Stick to the plan. You'll be just fine.

Insurance companies usually are a rip off. They play on your fears. Only take on insurance when you absolutely have to. They aren't in the business of losing money.

Don't be afraid to try new things. Engines aren't really that complicated. Home construction is a lot more simple than most people think. Things don't work through magic, odds are if it's broke YOU can fix it. Is it worth your time? That's for you to determine. Don't start with the premise of it being impossible for you to do. Youtube is a beautiful thing.

If something in your life is collecting dust and it isn't sentimental to you. Get rid of it. Staying stuff free is extremely liberating.

If you want to see where you're going in life, take a look at the people you spend time with. This is very important. Some people are emotionally toxic, stay the hell away from them. Learn what a manipulator is and how they work. Don't just avoid them, stay the hell away with prejudice.

Make sure you spend time in some kind of social setting on a regular basis. Ball room dancing, swing dancing, toastmasters club... Aim for a more wealthy class of individuals, they can become invaluable to you with the knowledge they have and sway they hold in the community.

If you ever wind up in a situation with the law that isn't a traffic violation or you're clearly the victim, REMAIN SILENT. If you ever wind up in a police station being questioned, ASK FOR A LAWYER and then REMAIN SILENT. The law isn't known for being kind to the young. I've seen many a persons dreams dashed early against the rocks of our legal system over something stupid and trivial.

Fall in love. Date often. Don't think that the first one is the only one or the right one. Date someone for at least a year before you even consider marrying them. Then, wait at least 8 months before the wedding. Don't ever rush into anything when it comes to relationships. Make sure your significant other is frugal and on board with staying that way.

If I missed something, I'm sure MMM has an article to cover it.

You're already way ahead of the pack. Good luck. Don't take life for granted it goes by fast.

precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #14 on: May 11, 2016, 08:59:28 PM »
A job making a decent living should be the goal for college; graduating college shouldn't be an end unto itself. Make decisions accordingly and don't underestimate the power of internships and networking -- getting your first real job will likely hinge on those things, and you'll probably never have a better opportunity to do those things than in college. You are the only person you can count on to ferociously advocate for your own career.

I had an internship in college, but it wasn't one that had any potential to lead to a job. I worked a dead-end job for two years after college. It took me five more years after that to get in my current position. I am only making $90,000 a year now because my company is very much pro-promoting from within and I was able to do a paid internship with my current team.

You can have skills, you can be smart, but if you don't have the opportunity to show someone you can add value to whatever they're doing with those skills, that isn't helpful for you financially.

Exactly! I completely agree with you. I'll be looking to get as much experience before/during college in work-related fields, so I'll be taking your advice on that. And "only" making $90,000? That's an insane amount of cash!



If college is free, then the other side of the equation is all benefit. Sure, you could look at a plastic surgeon vs a social worker and see that the equation tells you to become a plastic surgeon. You mention various business emphases. Pick one that makes you the happiest, that you're also good at...then profit. Don't worry if you change your major though. Most of us do/did.

As a businessperson, you can pretty much use any numbers or statistics to confirm or reject an idea. Do the same with a cost benefit analysis 😀  Please excuse the brief response. Typing on my phone

Only time will tell what I'm good at. My mind has changed from chemical engineering to computer sciences to business... Who knows if I'll change my mind again before I enter college. I will pick what makes me the happiest, as well something I'm good at. I didn't think people needed to be told that, but it's nice to be told :)


1. Thanks for that, I weightlift 4x a week , so should be adequate enough but can never be too safe!
NICE! Keep it up!

2. How do you conduct a cost/benefit analysis if college is basically free?
Congratulations! Getting free college is a huge advantage for you

3. I'll be majoring in business, with a focus on either management (information systems), marketing, or Finance (I've figured out I enjoy reading about index stocks, compound interest, etc.).
I work in Enterprise software sales where I interact with lots of IS managers, the $$ is great but it could be high stress. Finance in college and personal finance are completely different things. A BA/BS in Finance will be more of an accounting degree.

4. I'm aiming to be in walking/biking distance of my job and stores once I do get a full-time job.
Great planning!

5. Will do. While I won't freak out if I don't retire at 30 like MMM did, I don't want to be bound to a desk is all.
As early as you're getting into the game you are going to be just fine!!

Comments in bold.

Thank you so much for your advice! Regarding finance as a degree, I've noticed its slower growth wise compared to other disciplines of business.. but who knows? Maybe I'll enjoy it.

#1 Make it a ROTH IRA- at your income level, there's no grand benefit to a traditional IRA.

#2 When you hit college, make academics your #1 priority. It's not worth risking letting your grades slip and losing your scholarships over a part-time job. When you're on a full ride, school is your job. Also, in business school, great grades open the doors to the best interviews/job opportunities. Take the time to do an internship or two.

#3 As others have said - take care of yourself with manual labor. Don't get overconfident just because you're young and lift weights! You can do lifetime damage if you don't lift properly and address any injuries.

The biggest strides you'll make will be when you graduate. But hey - you'll be hitting the ground running with a business degree and no student loans!

1. Yeah I already knew I was going with a Roth IRA considering there was NO WAY I would be staying in this tax bracket, ESPECIALLY after college ;)
2. Oh yeah, definitely. If you save a couple hundred now, but your grades drop and you miss out on an once in a lifetime opportunity, you're at a loss! Don't worry, I've been instilled with that "school before everything" mentality since kindergarten.
3. There are other job offerings available, manual labor was just the one I saw. There's another opening I'm looking at that is dealing with a family e-commerce business I'm highly interested in. I'll keep you guys posted, or might even start a journal.

I'm 19 currently so not too far off from you. I just finished my second year of college. I started thinking about financial independence after just turning 18 during my freshman year of college.

Similar situation here:
-35 ACT so full tuition + housing at my college. I also receive pell grant money and outside scholarships so I get a refund of about $6k/yr from my school.
-Always pretty frugal so I came into college with a decent chunk of change. Currently have $10,500 in my Roth IRA. Stick to Vanguard and invest in VTSMX/VTSAX.
-Don't be afraid to work in college but don't let it impact your grades. I'm making a ton from engineering internships over the summers and part-time engineering work during the school year.


My tips:
-Definitely apply to outside scholarships if you fit their criteria. Easiest money ever. I spend maybe 1 hour per application and most are $500 or $1,000 or more. Do keep in mind you'll be taxed on all scholarships in excess of tuition and "education expenses". Housing and food are not educational expenses.
-Put your money into a Roth IRA with Vanguard.
-If your parents really give your $40-$50k, make sure y'all do your homework and avoid tax penalties and such. See if you can roll that money into some kind of tax sheltered account. If not, starting yourself a taxable investment account isn't necessarily a bad thing. I just don't have the money or reason to at the moment. When I graduate and get real income, then I'll have to start thinking about that.


Random thoughts:
-You're lucky to be in the situation you're in. Sounds like your family is more well off than mine so pretty cool your parents are able to help you with college, give you a nice car, and get you started off financially.
-Keep hitting the weight room every day. College is gonna make your life busy depending on which you take on but make sure you don't stop hitting the gym.
-As someone stated above, you could do really well becoming a landlord in college. That being said, it would have to be well planned and researched. It may not totally be worth the time and effort

Vehicle:
Might as well keep the vehicle unless your parents are okay with selling it and moving you into something a little more economical. CRVs are not bad though and having an SUV can be convenient sometimes.

A 35?! That's insane! I would be surprised if you DIDN'T have a full ride. I would hardly call out situations similar, just from that ;) Regarding investing advice, I'll probably ask some people over at the investing part of this forum, or either stick with Betterment (until I better understand what I'm doing), or invest in a 60/40 split between VTSMX and VGTSX as a calculator from Vanguard recommended. There's still so much I need to know about index stocks and investments in general like balancing, TLH, etc...

Yeah I'll definitely balance my time between academics and work; I'm sure most interns or jobs will understand as well considering we are advancing our education after all.

I'll definitely make sure we figure out a way to minimize tax impacts if my parents do give me that kind of money. All that is certain (or what my parents will reveal to me) is that I AM receiving some amount of cash after I graduate. And by how often they mention it, a pretty decent size so I am just spitballing here.

I read the posts, who said anything about being a landlord? With what land?! Please explain.

And considering they are transferring ownership to me, they should be fine. Considering also it'll be just me (maybe a roomate/girlfriend if I'm lucky LOL), I think a commuter-oriented car will be profitable from the cash I can pocket, as well as the lower insurance premiums I'm assuming, and not to forget the higher mpg. It's just a matter of time until someone teaches me how to drive manual and to get the hack of hypermiling...

Here we GO:

Don't have children until you're at least 25.

Don't mix family/friends and money. Don't rent a house to family or friends. Don't start a small business with family/friends.

Find a career where you can comfortably save over $40k per year. Always take into account geographic cost of living, including taxes, relative to income in the areas you're looking.

Don't take on debt unless you can clearly present a net profit to you from said debt.

Try to save at least 1/2 of your paycheck. At your age you should probably just drop it into VTSAX. IRA, 401k preferably. Then FORGET about it. Don't listen to market news.

Do not buy a house until you're sure you're going to be in an area for more than 10 years. This will most likely be after you're 25. NEVER buy a house without putting a lot of thought into it. Even though you may be, try to have someone who is financially practical and competent with you through the whole process. Make sure that person has your best interests in mind.

Don't be afraid to look at craftsmen jobs, electricians, machine operators, trade unions. A lot of them are paid very well and they're not stuck in an office all day. They also don't require near as much money in schooling/qualification.

Make sure you live within short biking distance to work and the grocery store. Automobiles are expensive and the less you use/own/maintain one the quicker you can reach FI.

Think of payments in decade format not monthly. $10 per month doesn't seem like much. $1200 seems like a lot. Is Pandora worth $600 over 10 years? Is Netflix worth $1200 over 10 years? $100/month phone bill is $12,000 dollars over 10 years.

Avoid consumerism at all costs. Before you buy something, consider, do I really NEED this. There's nothing wrong with buying luxuries for yourself, but you need to know they're luxuries. Never buy anything over $40 that you haven't been considering purchasing for at least a couple of days. Did you need it yesterday? Than why must you have it today?

Eating out, try to limit yourself to once a week. Find a happy hour places that serve cheap appetizers. Split them with friends.

Create little challenges for yourself. 1 month of not eating out. $30 weekly meal plan challenge. Walk to work/school every Monday for a month. Things of that nature. Create the challenge and track it. Hold yourself accountable.

Have fun. Don't burn yourself out. Go on trips. See the world. It's not as expensive as a lot of people make it out to be. NEVER travel on debt. Save up and THEN go on the trip.

I think of debt as a form of modern slavery. Other than education and a home purchase, there aren't a lot of other good reasons to take on debt.

Rent to own, avoid it at all costs. I've never come across a financial transaction where rent to own wasn't a complete rip off.

Be thrifty, thrift stores can be a great place to find casual clothing or even business dress for a very low cost.

Try to have a few hobbies and stick to them. Collecting hobbies gets expensive.
 
If a family member asks you for financial assistance give it to them as a gift, not a loan. If it's too much to give as a gift, than you sure don't want to give it to them as a loan. Make sure you're not giving drugs to a drug addict.

Don't get discouraged when everyone else tells you you're crazy. You can do this. This can be your reality. Study your finances. Make a plan. Stick to the plan. You'll be just fine.

Insurance companies usually are a rip off. They play on your fears. Only take on insurance when you absolutely have to. They aren't in the business of losing money.

Don't be afraid to try new things. Engines aren't really that complicated. Home construction is a lot more simple than most people think. Things don't work through magic, odds are if it's broke YOU can fix it. Is it worth your time? That's for you to determine. Don't start with the premise of it being impossible for you to do. Youtube is a beautiful thing.

If something in your life is collecting dust and it isn't sentimental to you. Get rid of it. Staying stuff free is extremely liberating.

If you want to see where you're going in life, take a look at the people you spend time with. This is very important. Some people are emotionally toxic, stay the hell away from them. Learn what a manipulator is and how they work. Don't just avoid them, stay the hell away with prejudice.

Make sure you spend time in some kind of social setting on a regular basis. Ball room dancing, swing dancing, toastmasters club... Aim for a more wealthy class of individuals, they can become invaluable to you with the knowledge they have and sway they hold in the community.

If you ever wind up in a situation with the law that isn't a traffic violation or you're clearly the victim, REMAIN SILENT. If you ever wind up in a police station being questioned, ASK FOR A LAWYER and then REMAIN SILENT. The law isn't known for being kind to the young. I've seen many a persons dreams dashed early against the rocks of our legal system over something stupid and trivial.

Fall in love. Date often. Don't think that the first one is the only one or the right one. Date someone for at least a year before you even consider marrying them. Then, wait at least 8 months before the wedding. Don't ever rush into anything when it comes to relationships. Make sure your significant other is frugal and on board with staying that way.

If I missed something, I'm sure MMM has an article to cover it.

You're already way ahead of the pack. Good luck. Don't take life for granted it goes by fast.

Before I comment/respond to this:

Wow, this was very touching to me truly. To think that a stranger across the internet could be so helpful, the internet truly is a beautiful thing. Not only did it cover financial advice, but life advice as well, a commonly recurring theme over at MMM's blog which I really do find neat.

1. Didn't plan on having a kid (singular, MAYBE 2) until I was financially independent. I admire MMM's ability to spend so much time with his son, and I want to be able to do the same.
2. Good advice. We regularly remit money to the Philippines (it's where I'm from, most of my family still lives there) and the amount of chaos that can occur...
3. Isn't percentage more important? $40,000 is definitely a good amount, but from what I've read it seems percentage of annual income vs expenses is more important. I'll definitely aim for this, more if I can get it :)
4. I plan to attack any debt I ever will accumulate. The "strategy" of taking advantage of low interest mortgages to invest in higher-return investments is a major balancing act/ headache. I'd rather have a guaranteed return, plus no debt :)
5. MMM instilled this very early. I'll be happy to put it into practice, once I get a job :). Again, it seems everyone is suggesting Vanguard funds (from what I've read,  for good reason too) but I'm still on the fence about which funds and what allocation. Probably a future thread is required for this :)
6. Oh yeah. For sure. I've got a couple locations in mind BESIDES Colorado (the way he describes it, it does sound like heaven lol) that seem to be Mustachian friendly.
7. I have looked into blue-collar jobs. I know certainly that I do want to pick up some skills, or maybe get certified in one I'm interested in as a way for extra income once I'm FI or as side-hustle.
8. So I've learned. Commuting is so expensive. For this reason alone, I'll probably be renting apartments for a long time, in order to get good locations.
9. Netflix IMO is still worth it, if it prevents me from purchasing cable or satellite. I'll probably be using some combination of Google voice, Google Fi, or some other recommended phone plan from the MMM blog or something similar.
10. Again, good advice. It's not about a total shut off from splurging, but you've got to be careful about it. You can have anything you want, just not everything.
11. I usually do this anyways, so this won't be that hard to abide by.
12. I'll try these! Down the road, I'll make sure to post them here to keep myself accountable.
13. I FOR SURE plan to travel, and if I figure out how to "hack" travel credit cards, hopefully for on the low too.
14. Agree here also. If you can't afford something, you can't afford something. Simple as that.
15. Seeing this in my life now. Renting a tuxedo for prom for many of my peers was $200 for ONE NIGHT.
16. I'm with you here brother. Find the right fit, get it tailored, and you're looking spiffy!
17. I do plan to have some hobbies when I figure out my passions are. I do know I'm interested in self-sufficiency, so MMM peaked my interest when he blogged about a hydroponics garden ( I plan to build one of these!) and other cool stuff like that.
18. This is AMAZING advice I've never heard. I hope to never have to use this, but glad to know it's there.
19. My retort is "You're right. I'll be crazy rich!" I'm used to having ideas that go against the grain of the people I talk to, so I'll be fine. I'm learning as much as I can and planning it, on it chief ;)
20. So I'm told from you and MMM. It does make sense too, insurance companies are making a killing so I'll be looking for the bare minimum insurance I can get away with.
21. I really glad to hear this.  I wanna to learn a lot, and work with my hands. Plumbing, electricity, cars, all of it. I look forward to taking courses in these sort of subjects when I've got time.
22. Got some liberating to do then ;)
23. I've learned this the hard way... arguably the best way. Middle/high school was a growing time for me, and I've really found who my friends are, and what to stay away from.
24. DON"T HAVE TO TELL ME TWICE. And party with rich people, got it ;)
25. THis is some serious advice, and I was really pleased and shocked to see it. Thank you. I'll probably be to flustered to talk anyways haha.
26. Good advice. I'm not in any hurry to get married, I feel if God is calling me to marriage life, it'll happen eventually. He has a plan :)

All in all, wow. Thanks so much for ALL of the advice you guys have given me. I've got a ton more specific questions however, so I might post a link to that thread in the OP of THIS thread if I ever come around to it.

Spork

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Re: How can a 17 Y/O start his journey to FI?
« Reply #15 on: May 12, 2016, 10:15:06 AM »
Here we GO:

[excellent stuff deleted for brevity]

This is excellent advice.  All of it.

Starting at 17 is pretty much "the thing we all wish we had done" if we look back.  Compounding interest is your absolute best friend and you have so much time to make it work for you.  You're likely to screw up... but if you're working off a MMM blueprint your "mistakes" will be in doing something right that wasn't optimized.  In other words: so what? 

The only thing I can think to add is: Don't divorce.  Now I don't mean "if life is awful, stick it out."  What I mean is: don't put yourself in a position where divorce is likely.  All of us that have done it thought it would never happen.  And all of us can look back and see the train wreck that started at the train station.  Find a partner that REALLY matches your spending style and life philosophies.  It doesn't have to be an exact match, but the whole "opposites attract" doesn't always work long term.  If you have a fiery, exciting courtship of breakup/makeup... That will likely set the stage for your marriage, too.

BFGirl

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Re: How can a 17 Y/O start his journey to FI?
« Reply #16 on: May 12, 2016, 10:23:40 AM »
Never too early to start saving.  My daughter opened a Roth this year and she is 21.

zarfus

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Re: How can a 17 Y/O start his journey to FI?
« Reply #17 on: May 12, 2016, 11:04:56 AM »
Here we GO:

[excellent stuff deleted for brevity]

This really is good stuff.

Some things I might add off the top of my head
-never buy new cars
-rent in an area until you know where you want to live
-even if your school is "free", your time is not.  Don't waste that time getting a job that will make you feel stuck and that you will have to do it all over again.
-if you are a healthy individual, always get the High Deductible health care plan. Pay as little as possible monthly.
-stay open minded
-travel often if that's your thing
-respect your elders.  For example, even if you do decide to sell the CRV...talk to your parents about it and see if they are ok with it -- it's a gift after all.
-ask questions, you're doing a good thing with this thread.
-work hard, but take care of yourself

Cheers!

boarder42

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Re: How can a 17 Y/O start his journey to FI?
« Reply #18 on: May 12, 2016, 11:12:00 AM »
I'd do you IRA in vanguard why pay betterment the fees and make it roth.

you're at a point you can select your income out of college.  Pick a major that takes 4 years and gets you high income from the start - look at Engineering easily one of the best bangs for the buck.  My school was "free" as well for the most part but you dont wanna go back and pay for it when you find out its a 40k per year job outta school.  Engineers are one of the few professional degrees that basically pays you to finish up your learning.  no need for grad school go work for a company start applying your knowledge pass your PE after 3-5 years.  Not mention summer interships.  i made 19 an hour as a summer intern, also learning more about engineering while applying it in the real world and greatly enhancing my resume.

ketchup

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Re: How can a 17 Y/O start his journey to FI?
« Reply #19 on: May 12, 2016, 11:13:01 AM »
-respect your elders.  For example, even if you do decide to sell the CRV...talk to your parents about it and see if they are ok with it -- it's a gift after all.
Emphasis here.  Be careful.  I know that my mom wouldn't be OK with me selling a car she gave me (she hasn't given me a car, for clarity, this is a theoretical).  She'd feel insulted or cheated somehow (not saying it makes sense...).  Make sure everyone is on the same page.  People can get weird about gifts.

pbkmaine

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Re: How can a 17 Y/O start his journey to FI?
« Reply #20 on: May 12, 2016, 11:18:17 AM »
Greetings Mustachians,

I found this website after an afternoon of googling future careers, index funds, etc. I found this website and was hooked. A couple days of binge reading later, I've gone through about 80% of the posts and want to know how I could apply this to my situation.

Like the title says, what can someone that is just starting their financial career do it in a way that leads to FI? I'll be getting my first physical job (I've freelance wrote articles on the internet for 2 years, didn't save any of it)in a month or so moving boxes for a moving company part time at a starting rate of $12- $14, as well as starting an IRA through Betterment/Wealthfront and be putting at least 70% of each paycheck into there.

I'm not in any debt, I just don't want to work as a wage slave for 40 years.

EDIT due to replies commenting about college: I won't have to pay a cent for college (or at least, very little) due to my academics. I'm blessed with a 31 on the ACT, which should get me a meal plan, tuition, boarding, at Jacksonville State University, where I plan to attend. My parents will be covering what minimal expenses I do have, and giving me the funds that they had saved up for my college expesnse, but won't be needing. I estimated this to be around $40,000 - $50,000 as they will not give me a an exact number.

Am I too early to be concerned about early retirement? What should I know? Any pieces of advice?

Any and all feedback is appreciated.

As others have said, do not accept any money from your parents until you are SURE it will not disqualify you from financial aid. It sounds like your scholarships are academic and not needs-based, but check anyway.

precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #21 on: May 12, 2016, 01:54:43 PM »
Another round of comment replying, HERE WE GO

Here we GO:

[excellent stuff deleted for brevity]

This is excellent advice.  All of it.

Starting at 17 is pretty much "the thing we all wish we had done" if we look back.  Compounding interest is your absolute best friend and you have so much time to make it work for you.  You're likely to screw up... but if you're working off a MMM blueprint your "mistakes" will be in doing something right that wasn't optimized.  In other words: so what? 

The only thing I can think to add is: Don't divorce.  Now I don't mean "if life is awful, stick it out."  What I mean is: don't put yourself in a position where divorce is likely.  All of us that have done it thought it would never happen.  And all of us can look back and see the train wreck that started at the train station.  Find a partner that REALLY matches your spending style and life philosophies.  It doesn't have to be an exact match, but the whole "opposites attract" doesn't always work long term.  If you have a fiery, exciting courtship of breakup/makeup... That will likely set the stage for your marriage, too.

Divorce will never be an option for me, being instilled with Catholic values and all. I'm in no rush to marry either, so everything will take care of itself I guess.

Here we GO:

[excellent stuff deleted for brevity]

This really is good stuff.

Some things I might add off the top of my head
-never buy new cars
-rent in an area until you know where you want to live
-even if your school is "free", your time is not.  Don't waste that time getting a job that will make you feel stuck and that you will have to do it all over again.
-if you are a healthy individual, always get the High Deductible health care plan. Pay as little as possible monthly.
-stay open minded
-travel often if that's your thing
-respect your elders.  For example, even if you do decide to sell the CRV...talk to your parents about it and see if they are ok with it -- it's a gift after all.
-ask questions, you're doing a good thing with this thread.
-work hard, but take care of yourself

Cheers!

1.Don't plan on buying a new car, even though what Tesla is offering is mighty tempting. And the model 3 they're releasing, which is half of what the model S is while keeping summon and autopilot will be like $28k after federal incentives, is even MORE tempting. But I realize I probably won't need it, but might splurge if I do end up with an EXCESS amount of cash and I still long for it.
2. That was my intention. While I'm looking at places that are biker friendly (Portland,Oregon for example) I realize purchasing a house will reduce mobility GREATLY, even might prevent me from taking that new job.
3. I understand. While my parents have been pushing for me to just get some high paying job in the STEM field, I realized it is possible to live well off MUCH LESS. While my intention is business, if I enjoy engineering or some other field, I'll swap.
4. Was the plan. Plan to stay healthy.
5. Just open minded in general? Any further comments?
6. It is my thing. I'd like to visit as many countries as possible, and all 7 continents for sure.
7. I plan to. I will ask them if I make any decisions like that.
8. Will be asking a ton of questions, it's the only way to learn :)
9. Understood.

I'd do you IRA in vanguard why pay betterment the fees and make it roth.

you're at a point you can select your income out of college.  Pick a major that takes 4 years and gets you high income from the start - look at Engineering easily one of the best bangs for the buck.  My school was "free" as well for the most part but you dont wanna go back and pay for it when you find out its a 40k per year job outta school.  Engineers are one of the few professional degrees that basically pays you to finish up your learning.  no need for grad school go work for a company start applying your knowledge pass your PE after 3-5 years.  Not mention summer interships.  i made 19 an hour as a summer intern, also learning more about engineering while applying it in the real world and greatly enhancing my resume.

My only argument FOR betterment is the convenience. It's just automatic deposits, everything is automatic. You can watch the money grow. While I'm learning more and more through the forum and research about handling my own portfolio, has anyone done any calculations on how big of an impact the difference in fees made? I'm curious.  The plan is to create a Roth IRA, yes.

I'm still discovering what it is that I like doing, so I'm open to suggestions. While my expected time to work will be much MUCH shorter than most peoples if I save like crazy, I still want it to be enjoyable, with lots of potential for upward mobility.

-respect your elders.  For example, even if you do decide to sell the CRV...talk to your parents about it and see if they are ok with it -- it's a gift after all.
Emphasis here.  Be careful.  I know that my mom wouldn't be OK with me selling a car she gave me (she hasn't given me a car, for clarity, this is a theoretical).  She'd feel insulted or cheated somehow (not saying it makes sense...).  Make sure everyone is on the same page.  People can get weird about gifts.

I could see my parents thinking I was "ungrateful" or something. I'll tread carefully.

Greetings Mustachians,

I found this website after an afternoon of googling future careers, index funds, etc. I found this website and was hooked. A couple days of binge reading later, I've gone through about 80% of the posts and want to know how I could apply this to my situation.

Like the title says, what can someone that is just starting their financial career do it in a way that leads to FI? I'll be getting my first physical job (I've freelance wrote articles on the internet for 2 years, didn't save any of it)in a month or so moving boxes for a moving company part time at a starting rate of $12- $14, as well as starting an IRA through Betterment/Wealthfront and be putting at least 70% of each paycheck into there.

I'm not in any debt, I just don't want to work as a wage slave for 40 years.

EDIT due to replies commenting about college: I won't have to pay a cent for college (or at least, very little) due to my academics. I'm blessed with a 31 on the ACT, which should get me a meal plan, tuition, boarding, at Jacksonville State University, where I plan to attend. My parents will be covering what minimal expenses I do have, and giving me the funds that they had saved up for my college expesnse, but won't be needing. I estimated this to be around $40,000 - $50,000 as they will not give me a an exact number.

Am I too early to be concerned about early retirement? What should I know? Any pieces of advice?

Any and all feedback is appreciated.

As others have said, do not accept any money from your parents until you are SURE it will not disqualify you from financial aid. It sounds like your scholarships are academic and not needs-based, but check anyway.

It is academic-based. My parents probably make a combined income of over $100,000 anyways, so I'm probably not eligible for any type of need-based scholarships as it is.

Keep it up guys! I'm learning a lot. Thanks guys:)

boarder42

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Re: How can a 17 Y/O start his journey to FI?
« Reply #22 on: May 12, 2016, 02:05:34 PM »
betterment is just gonna take extra money and put it in something similar to VTSAX

go read JLcollins stocks series it will help you.  there is no need to pay betterment you can setup all that auto stuff with vangaurd as well.

precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #23 on: May 12, 2016, 02:13:17 PM »
betterment is just gonna take extra money and put it in something similar to VTSAX

go read JLcollins stocks series it will help you.  there is no need to pay betterment you can setup all that auto stuff with vangaurd as well.

Link? My main concern is balancing the portfolio; would betterments automatic rebalancing prove to big enough of a profit to justify the costs?

AmandaS1989

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Re: How can a 17 Y/O start his journey to FI?
« Reply #24 on: May 12, 2016, 02:17:12 PM »
If you want automatic balancing use a target date fund. https://investor.vanguard.com/mutual-funds/list?assetclass=bal&WT.srch=1&reset=true#/mutual-funds/asset-class/month-end-returns

They rebalance as you get closer to retirement.

boarder42

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Re: How can a 17 Y/O start his journey to FI?
« Reply #25 on: May 12, 2016, 02:20:43 PM »
betterment is just gonna take extra money and put it in something similar to VTSAX

go read JLcollins stocks series it will help you.  there is no need to pay betterment you can setup all that auto stuff with vangaurd as well.

Link? My main concern is balancing the portfolio; would betterments automatic rebalancing prove to big enough of a profit to justify the costs?

the only benefit betterment provides is tax lost harvesting.  which isnt really beneficial until you get into taxable accounts and even then its not really too useful until you are retired.  Rebalancing isnt a big deal and at your age i'd be 100% VTSAX anyways you dont need any money earning sub 1% in a bond.




http://jlcollinsnh.com/stock-series/

onlykelsey

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Re: How can a 17 Y/O start his journey to FI?
« Reply #26 on: May 12, 2016, 02:25:37 PM »
betterment is just gonna take extra money and put it in something similar to VTSAX

go read JLcollins stocks series it will help you.  there is no need to pay betterment you can setup all that auto stuff with vangaurd as well.

Link? My main concern is balancing the portfolio; would betterments automatic rebalancing prove to big enough of a profit to justify the costs?

the only benefit betterment provides is tax lost harvesting.  which isnt really beneficial until you get into taxable accounts and even then its not really too useful until you are retired.  Rebalancing isnt a big deal and at your age i'd be 100% VTSAX anyways you dont need any money earning sub 1% in a bond.




http://jlcollinsnh.com/stock-series/

Agreed with boarder.  Betterment is pretty cool, but I think only when you're a very high tax bracket and have significant taxable gains.  Much better for you to just put your head down and invest for 5 or 10 years first.  Who knows where things will be by the time you're in your late 20s like a lot of the folks on this thread, maybe there will be an improvement over betterment or a rewrite of the 1986 tax code.

mxt0133

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Re: How can a 17 Y/O start his journey to FI?
« Reply #27 on: May 12, 2016, 02:59:24 PM »
Here is a calculator that will help you calculate the impact of fees on your investments.

https://www.calcxml.com/do/inv12

This is a simple one that only does the initial investment scenario, think about how even the 35 basis points (.35% betterment fees) will have a compounding effect not just of net fees but also opportunity costs.  The additional fees lower the compounding effect of your initial investment.

At your age, maturity, and financial acumen I would open up two or three no fee credit cards.  This will help build your credit record, even though you probably won't need it.  Valid or not credit scores are being used for more than just mortgages and  loans.  They are being done for lease and employment background checks.  Keeping two or three cards open for a long time will help with your credit score.  You can then use other cards to churn for travel hacking, but keep the two or three forever to increase the average age of your opened accounts.

You are on a great path and having goals are good.  I know everyone here means well, but even i'm getting overwhelmed with all the life advice.  Just don't forget to pause and smell the roses from time to time.

ReadySetMillionaire

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Re: How can a 17 Y/O start his journey to FI?
« Reply #28 on: May 12, 2016, 03:05:24 PM »
OP: I think it's great that you are looking to get a head start and already seem to have a great head on your shoulders. That said, I'm going to play devil's advocate here a little bit.

You are 17 and already look at the idea of having a job as being a "wage slave." That's a terrible outlook to have before you've even selected (let alone started) your career.

FYI, a lot of people--maybe not a majority, but a healthy minority--enjoy working. I'm an attorney, and while it's stressful at times, I genuinely get a lot of satisfaction from my job. Just today I got an arbitration award in favor of my client, who is also a close family friend, and I'm on top of the moon about it. I used my education, skills, and knowledge to help my family friend avoid having to pay $50,000 and actually get an award of almost $20,000. And I got paid to do it!

Now I'm not saying I want to do this forever. I certainly don't. But the more I practice law, the more I think I'm at least going to do this part time until my late 50s, early 60s--despite the fact that I intend to be FIRE by 42.

Ultimately, I'd encourage you to have some balance and levity. Early retirement and financial independence is a great goal to have, but you can't let it consume your entire life.

If you get too addicted to FIRE, you become a "net worth slave" instead of a "wage slave," and both are equally terrible. Subscribe to r/financialindependence and r/personalfinance on Reddit and you'll see tons of stories of people in their 30s who let their entire lives go by them because they were a slave to their net worth. This thread (https://www.reddit.com/r/personalfinance/comments/4ivjh3/a_somewhat_different_question_how_do_you_develop/) was just posted today and it's a great example of what happens when a person becomes absolutely obsessed with their money.

You're 17. Go out and drink beers (when you're 21, of course). Go on spring break with friends. Take your SO out on nice dates. Don't go crazy with any of this, but don't let life pass you by because you don't want to be a "wage slave."

In other words, I'm not saying "YOLO MAN SPEND ALL YOUR MONEY." Find some balance. Focus on the big things. Don't get into credit card debt. Keep education debt to an absolute minimum. Pick a smart major. Don't buy expensive cars. Don't go crazy buying your first home. Criticize all recurring expenses and ask whether you really need them. Use tax advantaged accounts as much as you can.

But also create an established budget (mine is about 10% of income) to allow you to enjoy life.

In sum, it's silly for you to already think that having a job = being a wage slave. It's not like that for everyone. Do the big things right, don't sweat the small things too often, and find some balance and enjoy life.
« Last Edit: May 12, 2016, 03:07:32 PM by ReadySetMillionaire »

runningthroughFIRE

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Re: How can a 17 Y/O start his journey to FI?
« Reply #29 on: May 12, 2016, 03:44:58 PM »
You've already gotten some amazing advice from people here (I took some notes for myself, too; thanks everyone!), but here's a few thoughts of mine I don't think I've seen yet:

-You seem pretty ambitious, but be careful about biting off more than you can chew in your first year of college.  It's really easy to do.

-Meet tons of new people, dive headfirst into your classes, and have fun, but for God's sake GET LOTS OF SLEEP.  You can't sieze today if you're still drowsy from yesterday's adventures.

-Assuming you're going into business, take classes from other areas that interest you as long as it doesn't jeopardize your main program.  IS and finance/accounting go particularly well together.

-No matter what degree you shoot for, have fun with your extracurriculars and don't worry if they aren't always directly related to your field.  I was an accounting major, and took a black hole astronomy class just because it sounded interesting.  Interviewers thought so too, and I ended up getting an award for it.

-People here often cite STEM jobs as being the best high paying options, but that's not always true.  Engineers usually make good money, but there's plenty of business, legal, medical, and good old fashioned trades people on these forums making high salaries/wages too.

-GPA is often a filter in the interview process for business students.  Some of the best employers won't even consider you if you don't have a 3.0 or higher.

-Start looking for internships really early.  Interviews took place for the summer/winter as early as September the year beforehand at my alma mater.  Some companies will hire the particularly sharp kids in degree-revant internship positions as early as after their sophomore year, and it the experience is hard to beat.

dess1313

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Re: How can a 17 Y/O start his journey to FI?
« Reply #30 on: May 12, 2016, 06:00:52 PM »
Greetings Mustachians,

I found this website after an afternoon of googling future careers, index funds, etc. I found this website and was hooked. A couple days of binge reading later, I've gone through about 80% of the posts and want to know how I could apply this to my situation.

Like the title says, what can someone that is just starting their financial career do it in a way that leads to FI? I'll be getting my first physical job (I've freelance wrote articles on the internet for 2 years, didn't save any of it)in a month or so moving boxes for a moving company part time at a starting rate of $12- $14, as well as starting an IRA through Betterment/Wealthfront and be putting at least 70% of each paycheck into there.

I'm not in any debt, I just don't want to work as a wage slave for 40 years.

EDIT due to replies commenting about college: I won't have to pay a cent for college (or at least, very little) due to my academics. I'm blessed with a 31 on the ACT, which should get me a meal plan, tuition, boarding, at Jacksonville State University, where I plan to attend. My parents will be covering what minimal expenses I do have, and giving me the funds that they had saved up for my college expesnse, but won't be needing. I estimated this to be around $40,000 - $50,000 as they will not give me a an exact number.

Am I too early to be concerned about early retirement? What should I know? Any pieces of advice?

Any and all feedback is appreciated.

Its fun, enjoy it but keep your marks up!!! and keep damn good track of your time, exam dates, assignment dates etc.  its easy to loose track and no one in university will be your watcher.  its your job to keep yourself on track here.  welcome to adult world

Make sure you're educating yourself for a job, and not getting a useless degree in something random. 
Check out the job markets, availability of jobs, as well as wages for your field you may be entering, make sure it will be worth your time
i saw lots of people get degrees, some with good marks, some without good marks, and end up working desk jobs pushing pencils because their degree is useless or in a field over run with people already

precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #31 on: May 12, 2016, 06:26:25 PM »
If you want automatic balancing use a target date fund. https://investor.vanguard.com/mutual-funds/list?assetclass=bal&WT.srch=1&reset=true#/mutual-funds/asset-class/month-end-returns

They rebalance as you get closer to retirement.

I don't want the asset allocation percentages to change to more conservative as I get closer to retirement, rather I want the asset allocation to stay THE SAME. I know  different assets will perform better/worse than others so that they'll slowly drift away from their target percentages. The act of selling the gains and buying losses in the weaker assets to me seems like a headache.

betterment is just gonna take extra money and put it in something similar to VTSAX

go read JLcollins stocks series it will help you.  there is no need to pay betterment you can setup all that auto stuff with vangaurd as well.

Link? My main concern is balancing the portfolio; would betterments automatic rebalancing prove to big enough of a profit to justify the costs?

the only benefit betterment provides is tax lost harvesting.  which isnt really beneficial until you get into taxable accounts and even then its not really too useful until you are retired.  Rebalancing isnt a big deal and at your age i'd be 100% VTSAX anyways you dont need any money earning sub 1% in a bond.




http://jlcollinsnh.com/stock-series/

Gotcha. So Vanguard it is. What do you guys think of WiseBanyan, that free roboadvisor?

betterment is just gonna take extra money and put it in something similar to VTSAX

go read JLcollins stocks series it will help you.  there is no need to pay betterment you can setup all that auto stuff with vangaurd as well.

Link? My main concern is balancing the portfolio; would betterments automatic rebalancing prove to big enough of a profit to justify the costs?

the only benefit betterment provides is tax lost harvesting.  which isnt really beneficial until you get into taxable accounts and even then its not really too useful until you are retired.  Rebalancing isnt a big deal and at your age i'd be 100% VTSAX anyways you dont need any money earning sub 1% in a bond.




http://jlcollinsnh.com/stock-series/

Agreed with boarder.  Betterment is pretty cool, but I think only when you're a very high tax bracket and have significant taxable gains.  Much better for you to just put your head down and invest for 5 or 10 years first.  Who knows where things will be by the time you're in your late 20s like a lot of the folks on this thread, maybe there will be an improvement over betterment or a rewrite of the 1986 tax code.

That be awesome. And wow, didn't know we've been using the same tax code for 40 years now... You learn something new everyday.

Here is a calculator that will help you calculate the impact of fees on your investments.

https://www.calcxml.com/do/inv12

This is a simple one that only does the initial investment scenario, think about how even the 35 basis points (.35% betterment fees) will have a compounding effect not just of net fees but also opportunity costs.  The additional fees lower the compounding effect of your initial investment.

At your age, maturity, and financial acumen I would open up two or three no fee credit cards.  This will help build your credit record, even though you probably won't need it.  Valid or not credit scores are being used for more than just mortgages and  loans.  They are being done for lease and employment background checks.  Keeping two or three cards open for a long time will help with your credit score.  You can then use other cards to churn for travel hacking, but keep the two or three forever to increase the average age of your opened accounts.

You are on a great path and having goals are good.  I know everyone here means well, but even i'm getting overwhelmed with all the life advice.  Just don't forget to pause and smell the roses from time to time.

The calculator really opened my eyes. While I knew compound interest was a powerful force, I forgot that compounded fees would be just as powerful. I'll have to discuss with my parents opening A credit card, let alone 2 or 3. It took me YEARS to get my own debit card. What are some credit cards that you suggest?

OP: I think it's great that you are looking to get a head start and already seem to have a great head on your shoulders. That said, I'm going to play devil's advocate here a little bit.

You are 17 and already look at the idea of having a job as being a "wage slave." That's a terrible outlook to have before you've even selected (let alone started) your career.

FYI, a lot of people--maybe not a majority, but a healthy minority--enjoy working. I'm an attorney, and while it's stressful at times, I genuinely get a lot of satisfaction from my job. Just today I got an arbitration award in favor of my client, who is also a close family friend, and I'm on top of the moon about it. I used my education, skills, and knowledge to help my family friend avoid having to pay $50,000 and actually get an award of almost $20,000. And I got paid to do it!

Now I'm not saying I want to do this forever. I certainly don't. But the more I practice law, the more I think I'm at least going to do this part time until my late 50s, early 60s--despite the fact that I intend to be FIRE by 42.

Ultimately, I'd encourage you to have some balance and levity. Early retirement and financial independence is a great goal to have, but you can't let it consume your entire life.

If you get too addicted to FIRE, you become a "net worth slave" instead of a "wage slave," and both are equally terrible. Subscribe to r/financialindependence and r/personalfinance on Reddit and you'll see tons of stories of people in their 30s who let their entire lives go by them because they were a slave to their net worth. This thread (https://www.reddit.com/r/personalfinance/comments/4ivjh3/a_somewhat_different_question_how_do_you_develop/) was just posted today and it's a great example of what happens when a person becomes absolutely obsessed with their money.

You're 17. Go out and drink beers (when you're 21, of course). Go on spring break with friends. Take your SO out on nice dates. Don't go crazy with any of this, but don't let life pass you by because you don't want to be a "wage slave."

In other words, I'm not saying "YOLO MAN SPEND ALL YOUR MONEY." Find some balance. Focus on the big things. Don't get into credit card debt. Keep education debt to an absolute minimum. Pick a smart major. Don't buy expensive cars. Don't go crazy buying your first home. Criticize all recurring expenses and ask whether you really need them. Use tax advantaged accounts as much as you can.

But also create an established budget (mine is about 10% of income) to allow you to enjoy life.

In sum, it's silly for you to already think that having a job = being a wage slave. It's not like that for everyone. Do the big things right, don't sweat the small things too often, and find some balance and enjoy life.

Thanks, Satan ;)

But I think you misunderstood me when I said wage slave. I imagine myself being part of that healthy minority that enjoys working, I just have to be interested in the task at hand. The freedom that FI will buy me will allow me to work what I want, and how much/how little of said work as I want. I don't want to live the life where I have to time paying my bills the day after I get my paycheck, and saving the meager scraps that is left for 40 years. Does that clear things up?

And yes, this is probably something I'm going to have to balance, but not the extreme where I will starve myself. I like to eat, and to eat well. I've been practicing the "do I really need this?" mentality now, and feel comfortable in my ability to judge purchases or not. I will not stress however, on inevitable expenses. Thanks for the heads-up though.

Again yes, I will make sure to do that. Paying for the girls bill on your first date, buying drinks for the gang, it's all a balancing act. It'll take some work to get the balance just right, but I'll get there eventually.

You've already gotten some amazing advice from people here (I took some notes for myself, too; thanks everyone!), but here's a few thoughts of mine I don't think I've seen yet:

-You seem pretty ambitious, but be careful about biting off more than you can chew in your first year of college.  It's really easy to do.

-Meet tons of new people, dive headfirst into your classes, and have fun, but for God's sake GET LOTS OF SLEEP.  You can't sieze today if you're still drowsy from yesterday's adventures.

-Assuming you're going into business, take classes from other areas that interest you as long as it doesn't jeopardize your main program.  IS and finance/accounting go particularly well together.

-No matter what degree you shoot for, have fun with your extracurriculars and don't worry if they aren't always directly related to your field.  I was an accounting major, and took a black hole astronomy class just because it sounded interesting.  Interviewers thought so too, and I ended up getting an award for it.

-People here often cite STEM jobs as being the best high paying options, but that's not always true.  Engineers usually make good money, but there's plenty of business, legal, medical, and good old fashioned trades people on these forums making high salaries/wages too.

-GPA is often a filter in the interview process for business students.  Some of the best employers won't even consider you if you don't have a 3.0 or higher.

-Start looking for internships really early.  Interviews took place for the summer/winter as early as September the year beforehand at my alma mater.  Some companies will hire the particularly sharp kids in degree-revant internship positions as early as after their sophomore year, and it the experience is hard to beat.

 I'm pretty known for overextending, or stretching myself too thinly. I'm getting better at not doing that, but sometimes I refuse things I KNOW I could do, in fear of not being able to complete it. Experience will refine my intuition I think.

IT IS IMPOSSIBLE to get adequate sleep as a high school teenager. Especially this year, with the suicidal amounts of AP classes and Honors classes I've taken. Thankfully junior year ends in 14 days (including weekends) so the pain will be over soon. Next year I took it back SEVERAL notches, only taking one AP class (it's one that is known to be really easy too) and all regular. Hopefully I'll get some good sleep, and sock in some cash to start a nest egg; my goal is to put away around $20k before senior year graduation.  I've got the meeting people and diving headfirst into classes part down though :)

I'll make sure to keep that in mind. I've already got a major amount, if not all of, freshman college year done through online college, so I've already accumulated quite a bit of credits. I think I can afford doing some sampling, and really figuring out what it is that gets me going.

I have NEVER taking extracurriculars thinking "hmmm, this'll go good with my major" in hand. I take them because I'm interested. Good to know this can be beneficial :)

STEM I think is cited due to its high growth, which some would equate to as job availability. My parents both have engineering degrees, but I'm not sure if I was called to the that line of work. I think you can make any career path work if you really want it too, so it's just finding somewhere that aligns with my work values.

It's a good thing my weighted GPA is a 3.9 then.

Grades are only good to a certain point, experience is probably even more important so then academics. I'll be on a rage-induced mission to find internships, preferably paid. But I'll take what I can get.

Greetings Mustachians,

I found this website after an afternoon of googling future careers, index funds, etc. I found this website and was hooked. A couple days of binge reading later, I've gone through about 80% of the posts and want to know how I could apply this to my situation.

Like the title says, what can someone that is just starting their financial career do it in a way that leads to FI? I'll be getting my first physical job (I've freelance wrote articles on the internet for 2 years, didn't save any of it)in a month or so moving boxes for a moving company part time at a starting rate of $12- $14, as well as starting an IRA through Betterment/Wealthfront and be putting at least 70% of each paycheck into there.

I'm not in any debt, I just don't want to work as a wage slave for 40 years.

EDIT due to replies commenting about college: I won't have to pay a cent for college (or at least, very little) due to my academics. I'm blessed with a 31 on the ACT, which should get me a meal plan, tuition, boarding, at Jacksonville State University, where I plan to attend. My parents will be covering what minimal expenses I do have, and giving me the funds that they had saved up for my college expesnse, but won't be needing. I estimated this to be around $40,000 - $50,000 as they will not give me a an exact number.

Am I too early to be concerned about early retirement? What should I know? Any pieces of advice?

Any and all feedback is appreciated.

Its fun, enjoy it but keep your marks up!!! and keep damn good track of your time, exam dates, assignment dates etc.  its easy to loose track and no one in university will be your watcher.  its your job to keep yourself on track here.  welcome to adult world

Make sure you're educating yourself for a job, and not getting a useless degree in something random. 
Check out the job markets, availability of jobs, as well as wages for your field you may be entering, make sure it will be worth your time
i saw lots of people get degrees, some with good marks, some without good marks, and end up working desk jobs pushing pencils because their degree is useless or in a field over run with people already

Yeah that was my first concern also. Thankfully, management seems to be a growing career, faster than average too. With everything going towards handling data, I think I'll be okay. I'm not dead-set on business though, so I've got plenty of time to switch if I'd like too.

mxt0133

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Re: How can a 17 Y/O start his journey to FI?
« Reply #32 on: May 12, 2016, 10:06:11 PM »
With regards to the securing a credit card, unfortunately for the fiscally responsible, the law changed where the days when college freshmen were getting free swag to get a credit card are over.  Now if you are 21 and under you need a co-signer or show proof that you can pay your bills. 

The easiest way to get a a credit card to build your credit history is to have your parents co-sign a new card so their credit will boost yours.  I recommend a new account because you can ask for a lower credit limit that what you parents might normally qualify for.  Make sure it is one with no annual fees and preferably no international fees since you say you like and want to travel.  Since it will be your first card I wouldn't be too picky.

My first credit card was a Discover card with a $500 limit with no fees, basically there were the only ones willing to give a 19 year old a credit card making $5 an hour part-time.

http://www.creditcards.com/credit-card-news/help/10-ways-students-get-good-credit-6000.php

Ethernet

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Re: How can a 17 Y/O start his journey to FI?
« Reply #33 on: May 12, 2016, 11:07:03 PM »
With regards to the securing a credit card, unfortunately for the fiscally responsible, the law changed where the days when college freshmen were getting free swag to get a credit card are over.  Now if you are 21 and under you need a co-signer or show proof that you can pay your bills. 

19 year old here. This is correct. If I read correctly OP is making $12-14 dollars an hour, which is probably more than enough to qualify for a student card (they seem to like $10,000 yearly income). Unfortunately most creditors won't even look at you until you're 18, so welcome to counting down the days until your birthday.

I recommend trying the Discover IT student card. Since you're taking AP classes, you should probably be in the system for a college somewhere near you, giving you an .edu email address. Proof of income, along with a PDF file containing my class schedule was all that I needed to get a card with a $1000 limit, no fees, shiny flashing, etc.

Of course, do your own research on sites like nerdwallet. YMMV.

You are 17 and already look at the idea of having a job as being a "wage slave." That's a terrible outlook to have before you've even selected (let alone started) your career.
...
In sum, it's silly for you to already think that having a job = being a wage slave. It's not like that for everyone. Do the big things right, don't sweat the small things too often, and find some balance and enjoy life.

OP, if you take nothing else from this thread, please listen to this. I'm two years ahead of you but I've already burnt out once. Looking at every day as a day of servitude will give you such a DRIVE to make the best out of your situation and continue going after bigger and better things. It'll get you dream jobs, but it'll also make you hate them three months in because you're already wanting to be promoted to a higher income bracket without the experience to justify it. It's quite the paradox, and it can make your life a living hell if you obsess over it like I did.

I won't tell you how to have fun, but, consider a hobby, and don't be afraid to spend $50 on a date or a night out with friends because your savings rate will go down from 62%  to 57%. We quite literally have our whole working lives ahead of us, and aside from student loan debt, there's a lot of room to play around with before we start reaching a PONR.

Best of luck to you.

tibberous

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Re: How can a 17 Y/O start his journey to FI?
« Reply #34 on: May 12, 2016, 11:32:11 PM »
Late 20s here:

-Lift with your legs. Don't hurt yourself too early in your life.


LOL - I unloaded 2 uhauls today, cracked up when I read that. It's really good advice, my legs hurt like hell.

boarder42

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Re: How can a 17 Y/O start his journey to FI?
« Reply #35 on: May 13, 2016, 04:28:44 AM »
Alot of people in management at least where I work. Had technical degrees and were just natural at managing.  If your goal is to FIRE quickly ID strongly consider something other than a business degree. They are a dime a dozen IMO and seem to be what most people who are just going to college bc its the next step in life get.

Just my experience. Maybe there are some people on here with business degrees who can give you better advice on how to maximize your earnings out of school.

ShoulderThingThatGoesUp

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Re: How can a 17 Y/O start his journey to FI?
« Reply #36 on: May 13, 2016, 05:57:21 AM »
Here we GO:

Don't have children until you're at least 25.

Objection! My daughter was born when I was 23 into a stable marriage and a household income of nearly six figures. It is entirely possible to be prepared to have a child well before 25.

(Now, I think you were just saying "don't have kids when you don't have your shit together" which is absolutely right, but especially if you're applying yourself at 17 you can be ready in your early 20s.)

MsRichLife

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Re: How can a 17 Y/O start his journey to FI?
« Reply #37 on: May 13, 2016, 06:06:34 AM »

Am I too early to be concerned about early retirement?

No...not too early. I decided at 22 that I wanted to retire early. But even before that I had started working and saving at 12 and I began investing at 16.

The earlier you start the easier it will be in the longer term. I'm retiring at 39 and it has never really felt like a sacrifice for me because I've been frugal all my life.

runningthroughFIRE

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Re: How can a 17 Y/O start his journey to FI?
« Reply #38 on: May 13, 2016, 10:27:52 AM »
I'm pretty known for overextending, or stretching myself too thinly. I'm getting better at not doing that, but sometimes I refuse things I KNOW I could do, in fear of not being able to complete it. Experience will refine my intuition I think.

IT IS IMPOSSIBLE to get adequate sleep as a high school teenager. Especially this year, with the suicidal amounts of AP classes and Honors classes I've taken. Thankfully junior year ends in 14 days (including weekends) so the pain will be over soon. Next year I took it back SEVERAL notches, only taking one AP class (it's one that is known to be really easy too) and all regular. Hopefully I'll get some good sleep, and sock in some cash to start a nest egg; my goal is to put away around $20k before senior year graduation.  I've got the meeting people and diving headfirst into classes part down though :)

I'll make sure to keep that in mind. I've already got a major amount, if not all of, freshman college year done through online college, so I've already accumulated quite a bit of credits. I think I can afford doing some sampling, and really figuring out what it is that gets me going.

I have NEVER taking extracurriculars thinking "hmmm, this'll go good with my major" in hand. I take them because I'm interested. Good to know this can be beneficial :)

STEM I think is cited due to its high growth, which some would equate to as job availability. My parents both have engineering degrees, but I'm not sure if I was called to the that line of work. I think you can make any career path work if you really want it too, so it's just finding somewhere that aligns with my work values.

It's a good thing my weighted GPA is a 3.9 then.

Grades are only good to a certain point, experience is probably even more important so then academics. I'll be on a rage-induced mission to find internships, preferably paid. But I'll take what I can get.
You sound a lot like me 5 years ago.  I scored a 31 on the ACT as well, came into college one class shy of being a sophomore, and took bonus classes over the recommended amount when I did get there.  I almost got knocked out of my program for a dropping GPA by overextending myself.  If I could tell my younger freshman self just one thing, it would be to make sleep a priority, not a "try to get what you can" kind of thing.

Also, all internship offers should be paid (at least for finance), or I would stay away from that company.

elaine amj

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Re: How can a 17 Y/O start his journey to FI?
« Reply #39 on: May 13, 2016, 11:28:20 AM »
Interesting work helps the days go by quicker. That said, as someone who has worked a fair bit with summer students - always remember that EVERY job has its sucky parts. And there's "make work" projects in just about everything, especially when you are just starting out and they need to see just what they can trust you with.

I used to manage a small team of front-line staff. One time, I hired a student I knew well (smart, capable, great work ethic) and she confessed to me how BORED she would get sometimes. She hated that part of the job. And how incredibly long it took for anything to change. I finally just told her to "suck it up, cupcake". After that, I warned every new hire about the potential for dead time and that it would be an essential skill for them to learn to manage it without going out of their minds.

little_brown_dog

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Re: How can a 17 Y/O start his journey to FI?
« Reply #40 on: May 13, 2016, 02:08:59 PM »
Late 20s as well…

The fact that you won’t have to take out loans for your degree is amazing. My main advice was to avoid student debt if possible. We would be a lot further along if we weren’t paying off large amounts of debt.

Even more important than your investment strategy is the avoidance of lifestyle inflation wherever reasonable. When you are young it is so easy to think “oh I have money, I’ll get a nicer [insert item: car, apartment, wardrobe, etc]." But lifestyle inflation is the main reason many middle class people miss out on FIRE. I can’t tell you the number of people we know in their late 20s/early 30s who are now regretting their big car payments, expensive houses, etc because those things have drastically limited other opportunities in their lives. It is so hard to save a sinking financial ship, so it is better not to run it aground in the first place.

Live small and humbly…and find yourself a partner who also values saving/frugal living. Don’t hitch yourself to a horse with no legs and expect to get very far.

JLee

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Re: How can a 17 Y/O start his journey to FI?
« Reply #41 on: May 13, 2016, 05:36:35 PM »
Late 20s as well…

The fact that you won’t have to take out loans for your degree is amazing. My main advice was to avoid student debt if possible. We would be a lot further along if we weren’t paying off large amounts of debt.

Even more important than your investment strategy is the avoidance of lifestyle inflation wherever reasonable. When you are young it is so easy to think “oh I have money, I’ll get a nicer [insert item: car, apartment, wardrobe, etc]." But lifestyle inflation is the main reason many middle class people miss out on FIRE. I can’t tell you the number of people we know in their late 20s/early 30s who are now regretting their big car payments, expensive houses, etc because those things have drastically limited other opportunities in their lives. It is so hard to save a sinking financial ship, so it is better not to run it aground in the first place.

Live small and humbly…and find yourself a partner who also values saving/frugal living. Don’t hitch yourself to a horse with no legs and expect to get very far.
I couldn't agree more.

precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #42 on: May 13, 2016, 07:53:45 PM »
With regards to the securing a credit card, unfortunately for the fiscally responsible, the law changed where the days when college freshmen were getting free swag to get a credit card are over.  Now if you are 21 and under you need a co-signer or show proof that you can pay your bills. 

The easiest way to get a a credit card to build your credit history is to have your parents co-sign a new card so their credit will boost yours.  I recommend a new account because you can ask for a lower credit limit that what you parents might normally qualify for.  Make sure it is one with no annual fees and preferably no international fees since you say you like and want to travel.  Since it will be your first card I wouldn't be too picky.

My first credit card was a Discover card with a $500 limit with no fees, basically there were the only ones willing to give a 19 year old a credit card making $5 an hour part-time.

http://www.creditcards.com/credit-card-news/help/10-ways-students-get-good-credit-6000.php

Sad to hear that. And thanks for the suggestion.

With regards to the securing a credit card, unfortunately for the fiscally responsible, the law changed where the days when college freshmen were getting free swag to get a credit card are over.  Now if you are 21 and under you need a co-signer or show proof that you can pay your bills. 

19 year old here. This is correct. If I read correctly OP is making $12-14 dollars an hour, which is probably more than enough to qualify for a student card (they seem to like $10,000 yearly income). Unfortunately most creditors won't even look at you until you're 18, so welcome to counting down the days until your birthday.

I recommend trying the Discover IT student card. Since you're taking AP classes, you should probably be in the system for a college somewhere near you, giving you an .edu email address. Proof of income, along with a PDF file containing my class schedule was all that I needed to get a card with a $1000 limit, no fees, shiny flashing, etc.

Of course, do your own research on sites like nerdwallet. YMMV.

You are 17 and already look at the idea of having a job as being a "wage slave." That's a terrible outlook to have before you've even selected (let alone started) your career.
...
In sum, it's silly for you to already think that having a job = being a wage slave. It's not like that for everyone. Do the big things right, don't sweat the small things too often, and find some balance and enjoy life.

OP, if you take nothing else from this thread, please listen to this. I'm two years ahead of you but I've already burnt out once. Looking at every day as a day of servitude will give you such a DRIVE to make the best out of your situation and continue going after bigger and better things. It'll get you dream jobs, but it'll also make you hate them three months in because you're already wanting to be promoted to a higher income bracket without the experience to justify it. It's quite the paradox, and it can make your life a living hell if you obsess over it like I did.

I won't tell you how to have fun, but, consider a hobby, and don't be afraid to spend $50 on a date or a night out with friends because your savings rate will go down from 62%  to 57%. We quite literally have our whole working lives ahead of us, and aside from student loan debt, there's a lot of room to play around with before we start reaching a PONR.

Best of luck to you.

Gotcha. Don't have to tell me twice to have a hobby(s)! Thanks for the kind words.

Late 20s here:

-Lift with your legs. Don't hurt yourself too early in your life.


LOL - I unloaded 2 uhauls today, cracked up when I read that. It's really good advice, my legs hurt like hell.

Used to my legs killing me. From leg day in the gym to biking 15 miles regularly for exercise, leg pain is normal :)

Alot of people in management at least where I work. Had technical degrees and were just natural at managing.  If your goal is to FIRE quickly ID strongly consider something other than a business degree. They are a dime a dozen IMO and seem to be what most people who are just going to college bc its the next step in life get.

Just my experience. Maybe there are some people on here with business degrees who can give you better advice on how to maximize your earnings out of school.

Business seems to be experiencing a healthy outlook for the next decade, with reportedly higher growth than average according to that bureau of career or whatever that I read... Thanks for the words regardless. Will be on the lookout.

Here we GO:

Don't have children until you're at least 25.

Objection! My daughter was born when I was 23 into a stable marriage and a household income of nearly six figures. It is entirely possible to be prepared to have a child well before 25.

(Now, I think you were just saying "don't have kids when you don't have your shit together" which is absolutely right, but especially if you're applying yourself at 17 you can be ready in your early 20s.)

I think that's what he meant too. But usually more age equals more wisdom. I myself want to be financially independent before having a child, so it'll most likely be early 30's before I even consider a kid.

I'm pretty known for overextending, or stretching myself too thinly. I'm getting better at not doing that, but sometimes I refuse things I KNOW I could do, in fear of not being able to complete it. Experience will refine my intuition I think.

IT IS IMPOSSIBLE to get adequate sleep as a high school teenager. Especially this year, with the suicidal amounts of AP classes and Honors classes I've taken. Thankfully junior year ends in 14 days (including weekends) so the pain will be over soon. Next year I took it back SEVERAL notches, only taking one AP class (it's one that is known to be really easy too) and all regular. Hopefully I'll get some good sleep, and sock in some cash to start a nest egg; my goal is to put away around $20k before senior year graduation.  I've got the meeting people and diving headfirst into classes part down though :)

I'll make sure to keep that in mind. I've already got a major amount, if not all of, freshman college year done through online college, so I've already accumulated quite a bit of credits. I think I can afford doing some sampling, and really figuring out what it is that gets me going.

I have NEVER taking extracurriculars thinking "hmmm, this'll go good with my major" in hand. I take them because I'm interested. Good to know this can be beneficial :)

STEM I think is cited due to its high growth, which some would equate to as job availability. My parents both have engineering degrees, but I'm not sure if I was called to the that line of work. I think you can make any career path work if you really want it too, so it's just finding somewhere that aligns with my work values.

It's a good thing my weighted GPA is a 3.9 then.

Grades are only good to a certain point, experience is probably even more important so then academics. I'll be on a rage-induced mission to find internships, preferably paid. But I'll take what I can get.
You sound a lot like me 5 years ago.  I scored a 31 on the ACT as well, came into college one class shy of being a sophomore, and took bonus classes over the recommended amount when I did get there.  I almost got knocked out of my program for a dropping GPA by overextending myself.  If I could tell my younger freshman self just one thing, it would be to make sleep a priority, not a "try to get what you can" kind of thing.

Also, all internship offers should be paid (at least for finance), or I would stay away from that company.

Gotcha. Sleep is a priority. Will do. And I will take this advice to heart, so I should stay away from ALL unpaid internship? How can one decide if the experience is good enough that it'll be okay without pay? What are prime companies I should look into interning for? Small, startups? Big, established companies? What are some guidelines?

Interesting work helps the days go by quicker. That said, as someone who has worked a fair bit with summer students - always remember that EVERY job has its sucky parts. And there's "make work" projects in just about everything, especially when you are just starting out and they need to see just what they can trust you with.

I used to manage a small team of front-line staff. One time, I hired a student I knew well (smart, capable, great work ethic) and she confessed to me how BORED she would get sometimes. She hated that part of the job. And how incredibly long it took for anything to change. I finally just told her to "suck it up, cupcake". After that, I warned every new hire about the potential for dead time and that it would be an essential skill for them to learn to manage it without going out of their minds.

I don't expect a job to be 100% fun all the time. But I am able to bear through paperwork, and mindless boring stuff if I know the end goal, and it's something I'm passionate about. I wish this was required though! Everyone makes out their minimum wage job to be a blast, which is totally not true.

Late 20s as well…

The fact that you won’t have to take out loans for your degree is amazing. My main advice was to avoid student debt if possible. We would be a lot further along if we weren’t paying off large amounts of debt.

Even more important than your investment strategy is the avoidance of lifestyle inflation wherever reasonable. When you are young it is so easy to think “oh I have money, I’ll get a nicer [insert item: car, apartment, wardrobe, etc]." But lifestyle inflation is the main reason many middle class people miss out on FIRE. I can’t tell you the number of people we know in their late 20s/early 30s who are now regretting their big car payments, expensive houses, etc because those things have drastically limited other opportunities in their lives. It is so hard to save a sinking financial ship, so it is better not to run it aground in the first place.

Live small and humbly…and find yourself a partner who also values saving/frugal living. Don’t hitch yourself to a horse with no legs and expect to get very far.


Thanks. This will probably be a problem I could see occuring for me; I have an expensive taste in general. Road cycling is an expensive sport, and so is badminton. I like wearing nice suits, which would easily eat up a major portion of an income. Will have to keep this in check, for sure. Finding a partner that shares similar values would be even harder it seems; now that my eyes have been opened I see so much blatant consumerism around me. Its funny, I see a family driving in an Audi, or my friends parents who just got ANOTHER BMW, and I'm just shocked a little. MMMs blog was really eye-opening for me.

yuka

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Re: How can a 17 Y/O start his journey to FI?
« Reply #43 on: May 13, 2016, 11:19:10 PM »
College will potentially put you in contact with lots of people who can give you greatly extended reach. I recommend really knowing your shit so that when one of those opportunities comes along, you can reach out and grab those opportunities. Networking isn't required to get a job, but it can do pretty cool stuff. It doesn't all have to be productive, either. I met three of the five living presidents when I was in school. I arranged a 40 minute chat with Bush over coffee (because I thought it would make a good story) when I realized he was the son of a friend of a friend. And I'm a pretty shy guy...

obstinate

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Re: How can a 17 Y/O start his journey to FI?
« Reply #44 on: May 13, 2016, 11:25:22 PM »
Work hard in school. Your job right now is to get As and to do something at least moderately compelling in your non-academic time. (Sports, other extracurricular that you are passionate about. Really anything but videogames, reading, other masturbatory exercises. Not that you can't do those too, but there should be something else.)

After that, go to college someplace not that expensive, and pick a major that has a reasonable expected value without too much variance in outcomes (not law, in other words).

Over the next couple of years, pick up Mustachian skills. Learn to cook. Learn to work with your hands. Learn to work in general -- working fulltime over the summer can be great prep for understanding what real hard work is like, so you won't be shocked by the amount of work when you get to college. College would be a cakewalk for almost anyone if they treated it like an eight hour job.

Learn to want only things that will truly make you happy.

If you do these things, you'll be well on your way. Investing and stuff really only matters once you have an income. Right now the goal is to make sure you're well-positioned at 22.

mxt0133

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Re: How can a 17 Y/O start his journey to FI?
« Reply #45 on: May 14, 2016, 12:36:03 AM »
Read this thread about someone that FIRED at 28.  In summary, controlled lifestyle inflation, lived like a college student for years after finding full-time work and had a 70% savings rate until FIRE.

http://forum.mrmoneymustache.com/post-fire/i-retired!-but-now-i-am-anxious-about-what-to-do/msg1085680/#msg1085680

JLee

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Re: How can a 17 Y/O start his journey to FI?
« Reply #46 on: May 14, 2016, 04:31:54 AM »
Thanks. This will probably be a problem I could see occuring for me; I have an expensive taste in general. Road cycling is an expensive sport, and so is badminton. I like wearing nice suits, which would easily eat up a major portion of an income. Will have to keep this in check, for sure. Finding a partner that shares similar values would be even harder it seems; now that my eyes have been opened I see so much blatant consumerism around me. Its funny, I see a family driving in an Audi, or my friends parents who just got ANOTHER BMW, and I'm just shocked a little. MMMs blog was really eye-opening for me.
Be aware of how much you spend - if you're going to have expensive hobbies, make sure you are aware of the costs and decide whether or not it's worth it to you.

My personal pitfall is cars. To help mitigate the costs, I do my own maintenance (including a complete engine rebuild on my '91 Toyota MR2 two years ago). Instead of leasing a new BMW every three years, I put money into something that I love instead of a status symbol (which so many other people in society tend to do).

It may be worth it to you to have an expensive suit - if you've done the cost/benefit analysis and it's something that you will use.  The mindset that I get from MMM is not necessarily to spend as little as possible. It's to be mindful of your spending and to use money the least wasteful/most beneficial manner.

MMMWannaBe

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Re: How can a 17 Y/O start his journey to FI?
« Reply #47 on: May 14, 2016, 05:13:31 AM »
What an amazing thread....to be 17 and have your maturity and forethought.

My degree was finance.  What I discovered was that businesses wanted Accounting degrees.  So I leveraged my little bit of Accounting to get a job.  I am not in NYC where perhaps Finance degrees are in higher demand.  Accounting I discovered to be very deadline oriented.  Could never miss work the first week of the month.  Could never miss work when forecasts, updates to forecasts and other financial packages were being completed.  I do not want to make an attribution error and assume my reality is everybody's reality, but I am mentioning it.  If I had a do-over I would have become a business analyst and merged accounting with systems.  In the end that was what I did - process improvements through implementing new accounting systems or streamlining existing accounting systems.  But I never fully escaped the deadlines until I left.

As far as waiting to have kids that is such a mixed bag.  We did have kids in our later 30's (although my vision was having kids when I was young - but we had fertility issues).  And yes, we are now financially secure.  But I worry whether I will live long enough to see my grandchildren.  And having kids when you are younger is easier.  And then they leave the nest and you get to travel again independently while you are young. 

Until the last year or two I had not heard of financial independence or even been aware of the early retirement movement.  At 45 I realized that we were financially independent.  You may be striving for earlier than that.  You have to realize that I was not over the top frugal....travelled extensively and pretty much spent money on whatever I wanted. Financial Independence just happened. Here is what we did - maxed out our 401K and IRA.  Compounding took care of the rest. 

I fear I am repeating what others have said.  VTSAX all the way.  No question.  Indexing is how we got where we are.  Also, go to the JL Collins stock series and read it all.  http://jlcollinsnh.com/stock-series/

Best Wishes - I love all of the stellar advice you have received and I think you have big things in store for you.
« Last Edit: May 14, 2016, 05:27:02 AM by MMMWannaBe »

Jags4186

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Re: How can a 17 Y/O start his journey to FI?
« Reply #48 on: May 14, 2016, 06:14:11 AM »
I didn't read every response but at 17 here are the most important things:

Study.  Study real hard.  Go to the best college you can go to (without taking on mountains of debt) and study some more.   Treat college like a job--study and do school work from 9-5 M-F and you should get a 4.0.

Get an internship in the field you want to go into every year in the summer.  Hopefully you can get a paid one.

Get a good paying job when you graduate.

Roth IRA, 401k, SWR, all meaningless at this stage. You want to focus on getting the highest paying job possible so you are put in a position where you can save a boat load of money and can retire.  If it takes you 30k/yr to live, think of how much more quickly you'll FIRE if you have a starting salary of 70k vs 40k.


precrime3

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Re: How can a 17 Y/O start his journey to FI?
« Reply #49 on: May 14, 2016, 12:07:28 PM »
College will potentially put you in contact with lots of people who can give you greatly extended reach. I recommend really knowing your shit so that when one of those opportunities comes along, you can reach out and grab those opportunities. Networking isn't required to get a job, but it can do pretty cool stuff. It doesn't all have to be productive, either. I met three of the five living presidents when I was in school. I arranged a 40 minute chat with Bush over coffee (because I thought it would make a good story) when I realized he was the son of a friend of a friend. And I'm a pretty shy guy...

That's pretty awesome. I'm more of an outgoing guy myself, so I don't find networking that difficult. I'll get my business cards ready ;)

Work hard in school. Your job right now is to get As and to do something at least moderately compelling in your non-academic time. (Sports, other extracurricular that you are passionate about. Really anything but videogames, reading, other masturbatory exercises. Not that you can't do those too, but there should be something else.)

After that, go to college someplace not that expensive, and pick a major that has a reasonable expected value without too much variance in outcomes (not law, in other words).

Over the next couple of years, pick up Mustachian skills. Learn to cook. Learn to work with your hands. Learn to work in general -- working fulltime over the summer can be great prep for understanding what real hard work is like, so you won't be shocked by the amount of work when you get to college. College would be a cakewalk for almost anyone if they treated it like an eight hour job.

Learn to want only things that will truly make you happy.

If you do these things, you'll be well on your way. Investing and stuff really only matters once you have an income. Right now the goal is to make sure you're well-positioned at 22.

Got it, while I do have a long-term goal, I need some shorter term goals as well to ensure that I'm on the right track. I have an okay hand with cooking, it's really all about following instructions for me. I still need someone or some course to teach me a valuable skill to work with my hands, parents have huge bias against blue-collar so it won't be easy acquiring that particular skill. And I'm looking for a job, with nothing really panning out. The job I thought I had backed out on me last minute, so back to square one.

College will be free for me, and the business curriculum they have their is internationally credited and is the same standard as ivy-league schools, so I should be good to go in that department.

This is a skill everyone you should know in general,  and the more I practice asking myself "will this really make me happy?" the better I seem to get at it. This alone will save me so much money in the long run :)

Read this thread about someone that FIRED at 28.  In summary, controlled lifestyle inflation, lived like a college student for years after finding full-time work and had a 70% savings rate until FIRE.

http://forum.mrmoneymustache.com/post-fire/i-retired!-but-now-i-am-anxious-about-what-to-do/msg1085680/#msg1085680

I skimmed through it, and yeah wow! 28! I would be feeling the same she does, essentially having a desire to leave some grand legacy behind. But I can't imagine the look on someone's face when you turn in your 2-week notice because you're financially independent!

BTW: I understand what FI means, but what does FIRE mean?

Thanks. This will probably be a problem I could see occuring for me; I have an expensive taste in general. Road cycling is an expensive sport, and so is badminton. I like wearing nice suits, which would easily eat up a major portion of an income. Will have to keep this in check, for sure. Finding a partner that shares similar values would be even harder it seems; now that my eyes have been opened I see so much blatant consumerism around me. Its funny, I see a family driving in an Audi, or my friends parents who just got ANOTHER BMW, and I'm just shocked a little. MMMs blog was really eye-opening for me.
Be aware of how much you spend - if you're going to have expensive hobbies, make sure you are aware of the costs and decide whether or not it's worth it to you.

My personal pitfall is cars. To help mitigate the costs, I do my own maintenance (including a complete engine rebuild on my '91 Toyota MR2 two years ago). Instead of leasing a new BMW every three years, I put money into something that I love instead of a status symbol (which so many other people in society tend to do).

It may be worth it to you to have an expensive suit - if you've done the cost/benefit analysis and it's something that you will use.  The mindset that I get from MMM is not necessarily to spend as little as possible. It's to be mindful of your spending and to use money the least wasteful/most beneficial manner.

Oh yeah definitely. Thankfully, expensive suits will have some of the cost justified due to the work environment I presumably will be working in... and same thing with bikes, buying a steel-frame bike from like Surly where I can comfortably hitch a trailer to it will save so much money in terms of gas. I will just have to conduct cost/benefit analysis for sure.

What an amazing thread....to be 17 and have your maturity and forethought.

My degree was finance.  What I discovered was that businesses wanted Accounting degrees.  So I leveraged my little bit of Accounting to get a job.  I am not in NYC where perhaps Finance degrees are in higher demand.  Accounting I discovered to be very deadline oriented.  Could never miss work the first week of the month.  Could never miss work when forecasts, updates to forecasts and other financial packages were being completed.  I do not want to make an attribution error and assume my reality is everybody's reality, but I am mentioning it.  If I had a do-over I would have become a business analyst and merged accounting with systems.  In the end that was what I did - process improvements through implementing new accounting systems or streamlining existing accounting systems.  But I never fully escaped the deadlines until I left.

As far as waiting to have kids that is such a mixed bag.  We did have kids in our later 30's (although my vision was having kids when I was young - but we had fertility issues).  And yes, we are now financially secure.  But I worry whether I will live long enough to see my grandchildren.  And having kids when you are younger is easier.  And then they leave the nest and you get to travel again independently while you are young. 

Until the last year or two I had not heard of financial independence or even been aware of the early retirement movement.  At 45 I realized that we were financially independent.  You may be striving for earlier than that.  You have to realize that I was not over the top frugal....travelled extensively and pretty much spent money on whatever I wanted. Financial Independence just happened. Here is what we did - maxed out our 401K and IRA.  Compounding took care of the rest. 

I fear I am repeating what others have said.  VTSAX all the way.  No question.  Indexing is how we got where we are.  Also, go to the JL Collins stock series and read it all.  http://jlcollinsnh.com/stock-series/

Best Wishes - I love all of the stellar advice you have received and I think you have big things in store for you.


Thanks for the kind words, I'll try not to let it get to my head:). And Business is such a vague subject, I still feel that there are certain disciplines that are still  very lucrative (marketing and management for example) and still have high-growth, and will continue to have high-growth as we become more data-centric and social media becomes a larger thing businesses have to deal with. I hope to take a couple more career aptitude tests from now and until college, just to really see if business will be a good fit for me.

And 100% VTSAX? IS this just a rule of thumb or a good idea for someone my age? Don't you want some international exposure as well? Perhaps these are questions to ask over at investor alley/ a financial advisor. I'll add it to the list of investor questions I have, and will perhaps start a new thread over in investor alley. I have begun reading the stock series as well, and get back to you with my impressions once I have finished.

Me too! I really appreciate everyone helping me out :). I'll make sure to credit this thread when/if I start a journal!

I didn't read every response but at 17 here are the most important things:

Study.  Study real hard.  Go to the best college you can go to (without taking on mountains of debt) and study some more.   Treat college like a job--study and do school work from 9-5 M-F and you should get a 4.0.

Get an internship in the field you want to go into every year in the summer.  Hopefully you can get a paid one.

Get a good paying job when you graduate.

Roth IRA, 401k, SWR, all meaningless at this stage. You want to focus on getting the highest paying job possible so you are put in a position where you can save a boat load of money and can retire.  If it takes you 30k/yr to live, think of how much more quickly you'll FIRE if you have a starting salary of 70k vs 40k.



30K for a single person is quite lavish to be honest... but I get the point. I'm aiming for maybe a job that is 60K for right out of college, with ample opportunities to climb the ladder, with a peak salary near 100K. Certainly attainable in the field of work I'm planning to go into, but we will see what happens. It's hard enough to find an internship too, but I've expanded my hunt from strictly paying jobs to internships also, really looking for experience too. I do get the point that more money equals more saving, but savings percentage is just as important, if not more. Noted though.