Author Topic: Advice for a young Family Please help me answer the question.  (Read 5245 times)

Captain and Mrs Slow

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Advice for a young Family Please help me answer the question.
« on: December 10, 2012, 12:35:22 PM »
Got an email from my nephew and I'd like your thoughts on how best to answer

Quote
Hey Uncle Rob!

I am wondering - If I wanted to learn about stocks, where would I start? I know there are a bunch of sites out there, but when it comes to numbers, I try and read only what I need to…. if you know what I mean. When it comes to abstract ideas and formulas, I am by no means focused enough to strain the information in my colander. (if that makes sense)

I would like to be set up for the future, and I want to get out of debt faster than what we are. We are on an incredibly tight budget as well.

I currently have only one source of passive income that doesn't have high returns, but some. (as in $166 in the last 4 months) and wouldn't mind investing or something to make extra.

Ideas on sites? Ideas on this situation?
Josh

I bought him a copy of Millionaire Teacher 9 rules of wealth I should have learned in school by Andrew Hallam. It's a great book that really focuses young people just starting out in life. For investing he says stick to ETFs keep it simple.

While the book is a great start I'd prefer to sit down and talk with them. In our family we have both the skin flint (his Dad and Grandfather) and the former spendthrift, us. Problem is his Dad and Granddad is in far worse financial shape than we ever were!!!

My thinking is that frugality shouldn't be an end in itself but a means to an end FI.

What advice do you wish you had been given when you were first married?

Thanks

tooqk4u22

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Re: Advice for a young Family Please help me answer the question.
« Reply #1 on: December 10, 2012, 12:50:52 PM »
The best thing we ever did was to decide live on one income and never have debt (non-mortgage) - I wish it was because we were thinking about FIRE but that was not the motivation and allowed for lifestyle inflation.  We did it because we never wanted to be dependant on our jobs (i.e. while we weren't FIRE, if one of us wanted to change we could) and by doing so we saved and invested money along the way and when it came time for DW to stay home it was a non-factor (well from an needed income sense, it delayed FIRE though - figures once we started thinking about it).

To your nephews comments two things stand out that need to be discussed  - not really willing to learn (could be fine but then simple index investing is the ONLY way) and he wants to get out of debt (mortgage is one thing but if there are other kinds that needs to be taken care of).

And clearly point him to MMM to be sure he is living on an incredibly tight budget.

Erica/NWEdible

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Re: Advice for a young Family Please help me answer the question.
« Reply #2 on: December 10, 2012, 01:00:40 PM »
Sorry to be a smart ass, but quite honestly I'd send him here: http://www.mrmoneymustache.com/all-the-posts-since-the-beginning-of-time/

gecko10x

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Re: Advice for a young Family Please help me answer the question.
« Reply #3 on: December 10, 2012, 01:03:52 PM »
Assuming you're asking for general financial advice (not stock investing advice), here's what I wish someone would have hammered into me/us:

Avoid all consumer debt. If I had heeded that advice, we'd have a nice stash right now (8yrs into marriage and out of college) instead of digging ourselves out of debt. Out of college we budgeted and generally managed money pretty well (mostly stayed out of CC debt), but absolutely shot ourselves in the feet with cars and lifestyle inflation. We basically went from one old, paid off car in college to $40k of debt sitting in the driveway.

Having said that, I probably would have ignored the advice if it weren't given with a very clear example of the consequences. 

Also, point him to a list of blogs to read, including MMM.

Captain and Mrs Slow

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Re: Advice for a young Family Please help me answer the question.
« Reply #4 on: December 10, 2012, 01:09:08 PM »
Thanks everyone

Just a quick note, they asked because they want to learn and don't have any good examples to follow.

Also the book is a Christmas present for this year, should have mention that. 

I like the idea of focusing on living on one income, I was thinking of telling them to invest time in learning about frugality, ideas that work LED bulbs vs regular ones and ones that don't unplugging your iPhone (uses so little almost not worth unplugging)For example

Also lifestyle inflation,good point the wife and I are guilty of that one

 note I don't know what phone they own.

Russ

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Re: Advice for a young Family Please help me answer the question.
« Reply #5 on: December 10, 2012, 01:54:57 PM »
Sorry to be a smart ass, but quite honestly I'd send him here: http://www.mrmoneymustache.com/all-the-posts-since-the-beginning-of-time/

+1
Not too many hard numbers here, until you want them at which point they're easy to find in the forums. MMM is also very engaging for someone who lacks the focus to "strain the information in his colander" and the face-punchiness would be good for what sounds like a possible debt emergency (!!!)

shadowmoss

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Re: Advice for a young Family Please help me answer the question.
« Reply #6 on: December 10, 2012, 02:43:45 PM »
The old standby of Your Money or Your Life by Dominguez(sp?) and, I think, Robbins?  It's been a while.  However the philosophy written there is the basis of most of what I've tried to do for the past 8-10 years since I read it.  It gives a good groundwork to start out and gives a baseline to discuss the changes since the book was written.  My .02.

Done by Forty

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Captain and Mrs Slow

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Re: Advice for a young Family Please help me answer the question.
« Reply #9 on: December 11, 2012, 02:03:59 AM »
First off thanks to everyone who took the time to answer, we're all thinking along the same lines, the willingness to be open and a desire to learn more. I can't tell you how much reading blogs like this have totally changed my life for the better.

My thoughts/suggestions will be two fold.

1. Spend time on blogs like this, yes life is busy but take a bit of time each day as well as some recommended books.

2. Investing, that's a tougher one, as I wrote in my hardly ever updated blog, My Dad lived in similer times. The investing information overload is almost overwehlming. How is the average Joe to sort through all of this. It's no wonder people are so suspicious of the stock market and in Canada anyways tend to stick the bank or real estate. like one lady who complained that her investment advisors got rich off off her.

Finally to encourage them, that they are young and being is part of life on one income and kids, and with some effort and a bit of luck they can do well.

As well I need to listen more and talk les, but that's a story for another day.

Rob




Captain and Mrs Slow

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Re: Advice for a young Family Please help me answer the question.
« Reply #10 on: December 11, 2012, 02:04:48 AM »
Sorry to be a smart ass, but quite honestly I'd send him here: http://www.mrmoneymustache.com/all-the-posts-since-the-beginning-of-time/

BTW I agree totally that was going to be one of my suggestions

Russ

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Re: Advice for a young Family Please help me answer the question.
« Reply #11 on: December 11, 2012, 01:04:08 PM »
One other thing... I would try and stick with only or or maybe two books or blog recommendations to start. You mentioned in your post today how, since there is so much available, it is easy to get bogged down with too much information and too many decisions. Much better IMO to pick one thing to recommed at first - say, Mustachianism - wait for that part of your nephew's life to be on autopilot, and then maybe recommend a different book on a different personal-finance related topic, rather than giving him seven different recommendations at once.