Advice for 18 year old

[colinhopkins]

I'm 18 years old and I want to set myself up for the future. I've already invested $1400 in ETF's, I'm on track to save 12 months of expenses for when I move out, and I'll be attending a university to study Finance. I'd like to continue to save and invest for the future so that I'll be financially free as soon as possible. My ultimate goal is to have a million dollars in assets by age 30. I need advice on what I can do now and how I can meet my goals. Any life or financial advice would be much appreciated!

[Phoenix_Fire]

Here's a thread I started almost exactly a year ago that had some good info in it.  I would reference that for starters.

https://forum.mrmoneymustache.com/ask-a-mustachian/what-would-you-teach-someone-just-starting-out-or-wish-you-had-known/msg1898804/#msg1898804

Can't go wrong with the basics from JL Collins:
 http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/

What kind of Finance do you plan on doing with your degree?  Are you trying to get into Wall Street finance?  Budgeting FP&A? Will you be taking on many student loans?

I would recommend that you work as much as possible while going to school, and try to max out a ROTH IRA each year if you can.  Stick to Index funds for investing.

The fact that you're asking now is great!  Just being aware and having goals will help.  The more you can invest now, the sooner you will be FI, and then can RE or do whatever you want.  Don't ever think that you have it all figured out on your own.  This forum is a great resource, even if you don't post much here, just follow along and it can help keep you on the right path.

[colinhopkins]

I'd like to become a Personal Financial Advisor or be an advisor for a business. I have a full scholarship to the university I'm going to, so I won't need any student loans.

[Tyson]

For me, this quote from the "Zero to Hero" blog post on MMM really gelled it for me:

What happens when you can save more of your income? As it turns out, spending much less money than you bring in is the way to get rich. The ONLY way.

Save, save, save.  Remember that you have control over your income (somewhat) and your spending.  Controlling your spending is a lot easier than increasing your income.  ALWAYS spend less than you earn and invest the surplus.  Rinse/repeat and you're virtually guaranteed success.

[Phoenix_Fire]

Something to consider with being a personal adviser, are you going to be comfortable steering people to investments that will charge them more because you will get a larger commission?  I'm sure there is more to it than just picking accounts, but if you are working for a company doing this, you will probably have goals that do not align with the best interests of your customers.  I don't know exactly how that field works, as the only time I have purchased any investments through an agent was with my home/auto insurance rep, who steered me into American Funds with a front load of 5.75% on top of large expense ratios. 

My GF is an FP&A manager for a company.  She loves doing budgeting and planning, and working on acquisitions occasionally.  The pay for finance is much better than for accounting (I mention this because a lot of people confuse the two fields since they work closely together). 

Something else I would recommend for you while in school is networking.  Get to know a lot of people, try to cultivate those relationships.  You never know which one of your friends might end up having a connection that can help you out.

You have plenty of time to decide your career path.  Finance is definitely a solid choice, one I wish I had gone into actually.  Congrats on the full ride!  Make sure you keep it! 

[maginvizIZ]

Finance major here.

S&P 500 average P/E ratio = 15.74
S&P 500 P/E ratio today = 21.74

Overall, things are overpriced.

Not discouraging you to invest... Depending whether your scholarship will let you take more classes... I'd rather slam 18+ credit hour semesters fall & spring then get a full time summer job to get enough cash to live off for the next year (summer sales job, potentially? A financial advisor is a glorified salesmen, so it could be beneficial to test it out one summer), then going to school at a slower pace, but make more money at a $10-15 an hour job.

Once you plow through your first 2 years of classes, then I'd probably slow down the pace and really figure out exactly what you want to do in finance/business. NETWORK. NETWORK. NETWORK.


To make $1M in 12 years, you'll have to invest $50k per year, making 10%.  Again, not trying to discourage you; major props if you become a millionaire at 30.  I don't think MMM himself was a millionaire at 30.


Great to hear on the scholarship!

If you want to make money in finance, Investment banking is the way to go.  Financial advising will make great, ONCE you get enough clients.

I'm currently chilling in corporate finance making $66k at 27 (5 years work xp).  Good luck sir!

[colinhopkins]

Thank you to everyone for the advice so far! Networking is a great idea and it's something I will focus on more.

My goal to have a million dollars in assets by 30 is a large goal that certainly might be unattainable, but it's mostly just a goal I've set to drive me and guide my focus. If I'm not at 1M by 30, I will not be terribly disappointed with myself as long as I know I worked hard to be where I'm at by that time.

Right now, I'm trying to save 80% of my income. I limit my spending, but still allow myself to have fun. I try to work 4-5 nights a week and I make $15-20 an hour based on tips.

As for the personal advisor position, nothing is concrete yet. I plan on interning over the summers that I'm going to college, but if it turns out that I'm not helping people like I wish to, then plans will change.

Once I'm moved out, is there a way to be smart with housing and spend less, or will I have to stick to renting an apartment? Rent will be my largest expense at $400-600 a month and it would be nice to save that money instead. 

[Freedomin5]

Can you get a roommate? I spent around $250/month in rent in LA because I had three roommates in a two bedroom.

[maginvizIZ]

Can you get a roommate? I spent around $250/month in rent in LA because I had three roommates in a two bedroom.

$250 in LA?  You're a god damn hero. Major props man.


Yeah with the living situation, rent with roommates.  Especially since you are in college, it's not werid to have roommates.

You could potentially buy a duplex with an FHA loan, rent out the other side, and get a roommate on your side to turn the $400-600 a month in expenses into $400-$600 a month in positive cash flow... You'd have to take a hard look in the area, and at yourself whether you'd like to be a landlord.  If you did go the duplex route, I'd buy one thinking you'd keep it long term.  Once you graduate and move out, then rent out the other unit.