Author Topic: What would you teach someone just starting out? Or wish you had known?  (Read 4594 times)

Phoenix_Fire

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Some of you may have read my Case Study and will be somewhat familiar with this.  My brother is 22, attending college, and due to my parents financial situation has no idea about money.  None. Zippity do da.  He has about $600 in savings, and expects to get about $600-700 back from taxes.

So now I am working on educating him.  He is taking out student loans, has about a year left until he gets his bachelors degree, then will enter a program that should give him a masters a year later.  He wants to get into physical therapy.  Currently works in a restaurant PT, minimum wage, probably about 15 hours a week.  No credit card, only a checking account.  Parents currently pay his cell phone ($50) and car insurance (I would put it at about $70).  He does not own a vehicle and uses 1 of my parents' cars when needed.

If you were given the responsibility of educating someone in this position, or were in it yourself, what would you teach or what do you wish you had known?

Here is where I am at now.  We had an hour long talk today in between classes while I was at lunch.  Luckily my work and his school are close by, so we met up and talked on a bench outside. 

He would like to start building credit, so we will look at finding him a credit card this weekend.  I explained, and he kind of already knew that this is something that has to be paid off in full each month.  Until I had told him, he thought he would have to mail in a check each month to pay (this is what our parents do).  I explained that pretty much any account can be set up to be automatically paid each month.

His checking account is through Fidelity (and now I need to confirm with him if it's the Fidelity or some other one).  He currently pays $5 a month for paper statements.  Told him to turn that off, he can check online or download an app to his phone.

I asked him if he pays cash for anything now or uses his debit card.  Luckily, it's pretty much all on the card.  I told him to go through his last 3 months of spending and break everything out into categories for each month to get an idea on where his money is going. 

I explained that the lower he can keep his expenses, the more he can save, and he has to start paying himself.  He needs to get his savings built up. I'd also like to see him start investing in a Roth IRA.  That might be aggressive at this point, but I told him if he can get used to doing that now it will make things so much easier in the future.  I let fear of not knowing how to invest prevent me from doing it for a long time.  I explained that he doesn't need to pick individual stocks.

I emailed him a document I had created with some questions and information for him to think about.  I told him the first thing to do is read: http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/ as it gives a good generic path to follow. 

I told him that when creating a budget, to not just go with the numbers of what he has spent in the path, but to shoot lower and make it slightly uncomfortable.  I explained the cash in an envelope budget, and how that would be good if he found that he was having a hard time sticking to his outlined budget. 

We need to open an online savings account for him, probably Ally or Synchrony.

I need to find out more details on his student loans.  He's pretty clueless about them right now.  I'm afraid he's going to get buried with them.  Luckily he was able to have his first two years at community college paid for. 

He is looking to get an internship or an assistant position with a physical therapist, but there haven't been many openings.  Regardless, he needs to get a better paying job.  He's a smart kid, and has his head on straight other than not knowing anything about finances. 

I told him that he needs to figure out if he can work more while going to school.  I let him know playing video games and hanging out with friends is fun, but I wish I had done less of that in school and worked more.  He's got time on his side, and if he can get things started now he will be so much better off.

What would you recommend?  Focus on savings first?  Try to get a Roth IRA with even minimal investments to it?  What do you wish you had known?

nereo

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #1 on: February 14, 2018, 03:13:11 PM »
Quote
If you were given the responsibility of educating someone in this position, or were in it yourself, what would you teach or what do you wish you had known?
Quote
What would you recommend?  Focus on savings first?  Try to get a Roth IRA with even minimal investments to it?  What do you wish you had known?

it sounds like you are doing an amazing thing getting your brother on the right financial track. I was fortunate enough to have a father who actually cared about teaching me good finances when I was a teenager, so this is mostly the things he taught me that really stuck.
(these are in no particular order)

1) At 22 time is on your side, and compound interest is your best friend. Start saving now by the time you are in your early 40s most of your peers will never be able to catch you.

2) max out your IRA each year.  Do only this one thing and you will be able to retire before you hit "normal" retirement age.

3) Managing your money is not hard, and be skeptical of anyone who tries to make it so.  Spend less than you make, invest the difference and avoid touching your savings for anything but true emergencies. Do those three things and you'll be ahead of 90% of your peers.

4) there is always someone living on less than what you make and still enjoying life. Model your life around these people, and don't try to 'keep up with the Joneses' that make more and spend more than you.

5) Savings buys options, and ultimately the freedom to do what you like.

...those were the biggies for me.  The other thing that helped was my dad literally showed me a graph of how much money a person would have if they started saving 10% of their income at 18, 28 & 38. Even though the 18 year old was saving much less (lower income) there was no scenario where the 38 year old could catch him/her, even if the 18 year old stopped saving completely after 20 years.

Tester

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #2 on: February 14, 2018, 03:34:23 PM »
Quote
If you were given the responsibility of educating someone in this position, or were in it yourself, what would you teach or what do you wish you had known?
Quote
What would you recommend?  Focus on savings first?  Try to get a Roth IRA with even minimal investments to it?  What do you wish you had known?

it sounds like you are doing an amazing thing getting your brother on the right financial track. I was fortunate enough to have a father who actually cared about teaching me good finances when I was a teenager, so this is mostly the things he taught me that really stuck.
(these are in no particular order)

1) At 22 time is on your side, and compound interest is your best friend. Start saving now by the time you are in your early 40s most of your peers will never be able to catch you.


...those were the biggies for me.  The other thing that helped was my dad literally showed me a graph of how much money a person would have if they started saving 10% of their income at 18, 28 & 38. Even though the 18 year old was saving much less (lower income) there was no scenario where the 38 year old could catch him/her, even if the 18 year old stopped saving completely after 20 years.

As someone who just started saving at 37 I can only agree with this :).
I would also stress: spend less than you earn.
I spent almost all what I earned - which meant I used some money to build a house.
Would I have kept on that money I would be retired now (or almost, would be around 1.2 million net worth).

Not last: it is never too late - although I only started in 2015 I am closing to 200k net worth...

rubybeth

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #3 on: February 14, 2018, 03:50:23 PM »
I wrote out all my best financial advice at the end of 2017. For your brother, I would add that he should fully understand any student loan documents he signs. Don’t borrow for frivolous things; if possible, work to earn money for living expenses. Don’t work so much that you can’t study; find a balance of the two.

All my best financial advice:

Track all spending; use an app like Mint or use spreadsheets. Some people like using cash and envelopes. Balance your checkbook with debit card expenses. It’s difficult to do anything else with your money if you can’t easily see exactly where it’s going.

Make a spending plan (aka budget) in whatever way you can actually follow; give every dollar a purpose. Again, an app like Mint or spreadsheets are free. Services like You Need A Budget help, too.

Learn the difference between wants and needs; work to spend less on both.

Research purchases to make sure they are wise purchases. Use resources like reviews and Consumer Reports or other data to select items that will last. Make a lifetime purchase, not a frivolous one. Reduce or eliminate debt before buying anything that isn't a need.

Have some way to cover emergency expenses; cash savings is good, a credit card is an okay fallback if you can pay it of soon, or a HELoC.

Check to make sure all your subscription services are things you actually use and are cost effective; drop those that aren't and find free or cheaper alternatives (gyms, magazines/newspapers, streaming services, etc.). Use your public library access to eBooks, use free podcasts, etc.

If you have a car, minimize driving; combine use of your car into multi-trips and do errands on the way to other errands.

Use any savings offered to you via employer with a match and contribute enough for the match; increase your contributions annually or with any pay increases--you won't likely miss an extra $25 from each pay check, but it will add up over time.

Pay down or totally eliminate high interest debt (credit cards, auto loans, student loans).

Roll over any old workplace retirement plans (401k/403b) to an IRA with Vanguard or Fidelity, unless your plan fees are very low or you have excellent investment options. Do NOT roll over a 457b plan to an IRA without consulting with a tax professional or lawyer.

It's never too early to plan for retirement, and every day you wait, you are losing money, so start now.

Read JL Collins stock series: http://jlcollinsnh.com/stock-series/ If you don't want to read that whole stock series, I'll summarize: put just about everything you can into low fee index funds--with Vanguard, that's funds VTSMX/VTSAX and with Fidelity, it's funds FUSVX/FUSEX. For employer plans, choose the lowest fee index fund you can. If the employer plan doesn't offer one, ask for it!

Compare insurance options annually--health insurance, car insurance, etc.

Run the withholding calculator annually for your paychecks and determine if you should adjust to minimize your refund: https://www.irs.gov/individuals/irs-withholding-calculator If you like getting a large refund, try using direct deposit to have your paycheck put into separate savings and checking accounts automatically. A bank will pay you interest, the government will not!

Don't borrow money for things for which you should  save--cars, travel, entertainment, etc.

Use a credit card with rewards that you'll actually use--clothes horse? Store cards offer major discounts like the GAP card. Love travel? The Chase and Barclay travel rewards cards reimburse you for travel costs and don't lock you into one particular airline or hotel chain.

If you have a high-deductible health plan that is HSA-compatible, use an HSA. Again, even $25 per paycheck will add up to $600 or more with interest in a year. Many of these plans also allow you to invest unspent funds--if you have a healthy year, invest these funds, too.

If anyone relies on you for financial support, get term life insurance and for yourself, carry at least short term disability insurance (and long term, if you can afford both). Avoid "whole life" or "universal" life insurance products.

Avoid multi-level or direct marketing "home businesses." The Federal Trade Commission reports that 99% of people lose money in these pyramid schemes.

If you are able, donate money to causes and organizations you support. Research how the money will be spent to make sure it aligns with your ethics.

hadabeardonce

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #4 on: February 14, 2018, 05:40:26 PM »
I'd be incredibly impressed if you were able to convert someone so young into a finance enthusiast. I've tried, but don't feel like I've gotten through to any of the 20-somethings I've talked to. The best I've done is to get them to consider DIYing some of the luxuries that they partake in, like fancy sugar/coffee/milk concotions or salted cheese tea drinks that cost $4-5 each.

Best advice:
1) Be a good example, practice what you preach, and be a resource.
2) Sign them up for Mint. The earlier, the better.
3) If they have a stable income, automate their investments. They'll be more likely to follow through with what they don't have to think about. Start small, 5-10%.

Lady SA

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #5 on: February 14, 2018, 06:06:27 PM »
Your brother reminds me of myself. My family was horrendous about teaching me any financial knowledge whatsoever. A few college friends were astounded when they realized I didn't know what a credit card was. Not that I didn't understand how to use one, no, I mean I literally didn't know what credit cards WERE. Yep. They were pretty smart and turned me in the right direction.

As someone who is only a few years older than your brother, here's what I would suggest, in order of importance:

1. The ONLY way to get ahead is to spend a LOT less than you earn. As in, aim for spending only 50% of what you take in and save the other 50%. This number is mind-blowing to someone just starting out, but also life-changing. Use mint to track spending and set a budget. Learning to have a plan for every single dollar was very empowering, instead of always being unsure how much I had available for anything I needed to get.
edit: otherwise, depending on his loans, he can also include his loan payments and aim to use 50% of his income to increasing his net worth (by both reducing debts or increasing investments)

2. explain the different methods of "saving". To college me, "saving" meant socking away in a savings account earning 0.1% interest, which seemed pretty pointless, until my friends explained investing to me. There is saving in cash and there is saving/investing for your future, and there are different accounts for each of these purposes. If your brother is at the level I was, he won't understand the various savings vehicles/accounts and their purposes, and that is pretty overwhelming.

3. First order of business: establishing a mini emergency account of $1k to weather unexpected emergencies. This is a safety net for preventing him getting into cc debt. So you will want to set up a good checking and savings account.

4. open a small cc and use it for gas and groceries only. To a rookie cc user, having some strong guardrails when you start out is good, and use it only for purchases you would make anyway.

5. set up auto bill pay and auto transfers to savings accounts. That helps with inertia and forgetfulness. If your savings are on autopilot, there are no excuses.

6. set up a roth ira and set up routine contributions to it, and put in as much as possible.

7. explain the power of compounding, otherwise saving just doesn't seem worth it to financially illiterate people. The most powerful lesson I learned was the rule of 72: which means that invested savings will DOUBLE every 10 years. The more decades you have to double, the exponentially more money you will have. Doubling 3 times is better than doubling only twice or once. For example, if you save $50k and not put in another penny, you can end up with either $400k (in 30 years), or only $200k (in 20 years) by waiting to put in that $50k by just 10 years. That was mind-blowing for a not math-oriented person like me. Note that compounding like this only is for invested assets, not cash you have in savings.

8. Help him get over any fear of the stock market. One thing that set me at ease was learning that index funds existed (so I wouldn't have to do research or a lot of maintanence/supervising my accounts) that were both easier to manage and also relaxing in the sense that I was optimistic that the market as a whole would continue to rise and solve new problems, but I wasn't confident in putting my money in specific companies (if that makes sense) because on the micro scale, things can be unstable, but on the macro scale, things generally become more efficient and solve more and new problems. Another mind-blowing lesson was that downturns are not cause for panic, but instead causes for putting MORE money into investments at a discount!
« Last Edit: February 14, 2018, 06:26:05 PM by Lady SA »

beattie228

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #6 on: February 14, 2018, 06:26:57 PM »
Advice to you, the older sibling trying to instill financial wisdom (spoken from my experience):
     -You can chat about financial things until you're blue in the face, but they have to want to accept the knowledge you're handing out before it'll make an impact
     -Don't get discouraged if you have to have the same conversations a few times before they actually stick

Advice to your brother:
     -Don't get discouraged comparing yourself to others. Focus on the little achievements that put you far and away ahead of most Americans
     -When I first started out, I was always envious of the guys driving brand new BMWs and racking up huge bar tabs. I wondered how they could have everything figured out financially. Then through my financial journey, I began to laugh on the inside when I see a young guy in a BMW he can't afford, wearing clothes he doesn't own outright with credit card interest racking up monthly. Now I'm not jealous of these folks, I just feel bad for how skewed their priorities are.
     -Don't get bogged down in the minutiae. Stick to big picture goals
     -First things first, change your mindset so that $500 is your new $0 checking account balance. You can't get ahead if you're paying a bank overdraft fees
     -Open a Roth IRA and contribute small amounts to it on a consistent basis. This gets the ball rolling in terms of training yourself to tuck away money for later.

The one quote that has stuck with me throughout the years "Live now like most won't so you can live later like most can't".

GizmoTX

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #7 on: February 14, 2018, 08:34:11 PM »
We started DS on financial literacy @ 15; he’s now 24 & completely independent.

Lesson #1: No fees. Find a checking account with no fees & free checks. Some want a checking account with an auto savings deposit of $25 or so monthly; never mind that you can reverse this the next day. Schwab offers a free account, free checks, & no ATM fees, but doesn’t have locations, so this is best for mobile check deposit or direct deposit.

Then a no-fee credit card, preferably with a cash reward. NO DEBT — The statement balance must always be paid off in full every month & on time, preferably online to avoid snail mail delays. It is so much safer to pay gasoline & other expenses by CC rather than a debit card, plus it builds credit history & can earn a modest cash reward.

YNAB app (You Need A Budget) to give every dollar a job & track spending. If YNAB no longer gives a free access key to college students, check out the free version of the Every Dollar app that Dave Ramsey promotes.

DS found it very useful to initially walk through each new step with me, such as setting up accounts, running budget apps, going online to check bank balances & do transactions, & how to reconcile a checking account. He has had to file a federal tax return since 15, yet still asks me to look over his shoulder when he does them as his financial situation has changed greatly over the years. Again, no fees — it is totally possible to file for free. Has your brother been filing returns?

DS has always been a great saver, but initially had a great deal of trouble believing that an IRA was a good idea — he viewed retirement accounts as a sort of black hole that money disappeared into for decades. We had to work on convincing him of the value of compounding tax advantaged money, especially at a young age, & that in certain circumstances he could still access his money (although this should be considered the last resort). We matched his HS earnings into a Roth IRA. He’s maxed it himself since.

If you are not currently charging your brother rent, you should start now with an amount you know he can handle. If you want, you could deposit all or part of his rent payment into his Roth IRA. When he graduates, he should either move out or pay full market rent, & make his own 401k & Roth contribution.

Lmoot

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #8 on: February 15, 2018, 05:58:09 AM »
Be able to live on half your income (fixed and non fixed expenses). The earlier you start, the easier it will be. It might motivate you to earn more if you’re only living on 50%, and dissuade you from spending money on monthly services that don’t add much value.

I like to think of myself as two people. Present me, and future me. I’m a single income earner for “two people”, and we each get half of the earnings.

jpeizie

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #9 on: February 15, 2018, 06:35:37 AM »
Being young and not financially savvy, he is probably very tempted by all the consumerism he sees around him and may not be convinced of all the benefits that could come his way by being more mustachian. My advice would be to give him a copy of Your Money Or Your Life, or (one that worked for me around his age) I Will Teach You To Be Rich. All the other good advice only works if you have your basic mindset right. Without that, it all feels like self-deprivation, which won't stick.

Brother Esau

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #10 on: February 15, 2018, 07:00:09 AM »
Your Money Or Your Life

This book was a game changer for us.

Lots of good advice coming in here. Another little nugget....I think it was Einstein that said "Those who understand interest rates, earn it. Those who don't, pay it". It takes money to make money!

rubybeth

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #11 on: February 15, 2018, 07:26:20 AM »
Oh, one more thing. When my younger sister was just starting out on her own, she asked me for advice. She calls me her "financial adviser" and runs larger purchases by me. It's kind of like having an accountability partner since she didn't have an SO when she moved out on her own. She had me help with budgeting, look over her taxes, and make sure her car payments (to the bank of mom & dad) were reasonable. I don't necessarily tell her what to do, but I might ask questions, like "how are you going to still save? can you afford the car insurance on this vehicle? can you increase your retirement savings with your raise this year?" etc. She'll tell me when she comes to a conclusion sometimes, like "I put all of my raise into the 401k" and I give her a high five. A few years ago, I encouraged her to consider buying a place when her rent was getting out of control (like, another rent increase of $50 would have been unmanageable), and she hadn't even considered it until I mentioned it. She got a 15 year mortgage on her condo and she'll have it paid off in her 40s, and it costs much less than rent--she joined her condo board to have more influence, too. She's really pleased with her financial wins so far with pretty minimal involvement from me.

Phoenix_Fire

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #12 on: February 15, 2018, 08:09:58 AM »
There are a lot of great suggestions so far.  I am personally reading A Random Walk Down Wall Street right now, and Your Money or Your Life is next on my list.  I read Millionaire Next Door first.  From everything I've heard, he will be getting Your Money or Your Life once I am finished with it. 

I know that these will be ongoing talks with him.  He likes the idea of automation, so hopefully he will agree to setup at least 25%, if not 50% towards savings and investments.  I will need to show him some graphs and spreadsheets with the impact that time has. 

Given how little he has saved right now, what would your strategy be for immediate goals?  I would like to encourage him to open a Roth IRA with Vanguard after getting his refund, put $1,000 in for one of their target date funds (VTSMX requires $3k, VTSAX $10k).  Then contribute 25% of his pay automatically to the IRA, 25% to a savings account, and have the rest for his budget.  Right now, that would leave him $70 a week to spend.  I want him to mentally adjust to saving, and prioritizing it. 

Once he has some savings built up, decide what his next goals will be.  Does he want to get his own vehicle? He needs to start making more so he can afford moving out or paying rent when that time comes. 

Thanks for all the suggestions so far.  I look forward to seeing what else people have to offer and I'll keep coming back to this for ideas.  This will definitely be a process.  I'm glad that some of the stuff recommended I have done with already, and really glad that I asked, as there are some things I missed and some good ideas on how to frame the conversation.

nereo

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #13 on: February 15, 2018, 08:51:21 AM »
...

I know that these will be ongoing talks with him.  He likes the idea of automation, so hopefully he will agree to setup at least 25%, if not 50% towards savings and investments.  I will need to show him some graphs and spreadsheets with the impact that time has. 
...

Here's one you can show him which I quickly drafted up.
4 different scenarios
22yr = saving $5,500/year starting NOW (equal to maxing out your IRA).
32yr = saving $8,000/year starting in 10 years (at age 32)
42yr = saving $15,000/yr starting in 20 years (at age 42)
22yr - 20 years = assumes he ONLY saves $5,500/year for ONLY the next 20 years.

Total contributions:
22yr= $209,000 over 38 years
32yr = $224,000 over 28 years
42yr = $285,000 over 18 years
22yr for 20 years = $110,000 over 20 years.

Take home message - if you start now you'll have more money in retirement even if you save a LOT more per year and more overall.  Time is your friend.


wonkette

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #14 on: February 15, 2018, 09:18:57 AM »
Lots of good advice here. FWIW, I'm trying to do the same with my own younger brother who graduated from college last year. Even though he studied accounting and generally has his head on straight he quickly got overwhelmed with information. So I would focus on a short list of fundamentals and reinforce them over time, then add in more detailed information like on tax strategy as things come up. https://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-an-index-card-of-financial-tips-isnt-enough-this-book-is-there

Regarding the student loans, he can check all of his federal loans out at studentloans.gov using the same login he uses to fill out the FAFSA. There's a lot of good information there (though it can be hard to find) on repayment programs and various forgiveness options if he goes into teaching or other public service. In my peer group I've found a lot of anxiety and avoidance of student loans. Even if he just knows how to login and knows his approximate balances that will be a good start. He will have to take student loan exit counseling before graduation.

CestMoi

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #15 on: February 16, 2018, 12:42:43 PM »

1. When he gets an income, begin saving as much as possible right away. Open an IRA and try to max it out every year.
2. Always keep costs on two things low as possible (while still being happy with the situation, a delicate balance): Housing and cars. Doing this will help him save. Get a smaller apartment/house. When starting out, consider apartment/house mates. Buy a used car.
3. Make educating yourself on investing a regular activity.
4. When investing in mutual funds, always choose low cost funds.



StealthFundip

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #16 on: February 16, 2018, 02:33:37 PM »
Being young and not financially savvy, he is probably very tempted by all the consumerism he sees around him and may not be convinced of all the benefits that could come his way by being more mustachian. My advice would be to give him a copy of Your Money Or Your Life, or (one that worked for me around his age) I Will Teach You To Be Rich. All the other good advice only works if you have your basic mindset right. Without that, it all feels like self-deprivation, which won't stick.

Before I completely accepted that a Mustachian way of life is inherently the best way to live, "I Will Teach You to Be Rich" really opened my eyes.  I was already trying to start saving, but I didn't know how or what to do to get started.  Some parts really stuck with me, like automating all the constant expenses in life and how credit cards with a balance actually reduce the amount of money you have to spend/invest.  Other parts I vehemently opposed, like justifying the author's friend that spent 50K a year on eating out.  There is absolutely no reason to spend that much, and OP would do well to point this out to their brother if they suggest this book.
However, Ramit Sethi does an excellent job opening the rabbit hole of financial literacy, something a lot more young people could really use!  If your brother is opposing your Mustachian suggestions, maybe try the "better than most Americans" approach from this book and then try to build on the foundations.

As a 21 year old, I wasn't too interested in the writing style of "Your Money or Your Life", but that might also be because I really don't know what I want to do with myself besides start earning more than $10,000 a year.  Finding a purpose to your life is really important to life satisfaction, but for us kids still in college/looking for a career, it will probably take a back seat.  I do like the net worth graph idea and relatable stories within, however.

okits

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #17 on: February 17, 2018, 10:14:50 PM »
Lots of great advice mentioned, already.  Two pieces I didn't see, above:

For brother: pick the right life partner.  Passion needs to be paired with friendship, supportiveness, and shared values.  Your partner's financial practices can devastate your family's financial picture or super-charge it.  Divorce is not a wealth-builder.

For you: the first market meltdown where your brother freaks out and wants to go to cash, offer him this deal.  He stays invested.  In 10 years/20 years/whatever long-term timeframe, if he is still down from his initial investment you will cover all his losses.  If he is up, he pays you half the gains.  If he's a smart cookie he'll start to wonder why you're willing to make this seemingly-lopsided deal, and hopefully it keeps him from panic selling.

Your brother is lucky to have such a caring older sibling!  (That's quite the age gap between you two!)

Roadrunner53

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #18 on: February 18, 2018, 06:14:50 AM »
The one thing I would advocate is not getting sucked into consumerism. Don't always think you have to buy the highest end refrigerator that hooks to your smart phone. A Honda might be a better choice than a BMW or Mercedes. A smaller home can work out just fine. If you are mechanical, would it make more sense to get a trade rather than be crushed with college costs? A lot of trades require going to night school and working as an apprentice during the day. Tradespeople make GOOD money and always have employment if they are good at what they do. A lot of word of mouth if you are in business for yourself. I would also say if you go the trade route, work for a company with good bennies like 401K and contribute to it till it hurts. Work for a company that has a good benefit package, not some mom and pop company. Every raise you get, if possible, put that percentage into your 401K. Save money for a vacation. If you are saving diligently, you deserve a bit of fun too!

MrThatsDifferent

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Re: What would you teach someone just starting out? Or wish you had known?
« Reply #19 on: February 18, 2018, 06:52:10 AM »
Suggest h read every blog post of MMM, changed my life. Then check out the forums and ask questions. Best if he motivates himself.

Also, from one big bro to another: don’t press too hard. And don’t interpret how he goes about it as a reflection on you and your relationship. Failure and mistakes are ok. All you have to do is point him in the direction and tell him, this changed my life and I’m setting myself up well, wish I knew this at your age, I’m here for you if you have any questions, good luck, I believe in you and love you regardless. That’s it.