"Every 25-Year-Old In America Should See This Chart"

[dragoncar]

How come these articles always start at 25? If you go the high school to college and out in 4 years route shouldn't you start at 22. Or is that not as pretty of a number as 25...granted I did start actually saving at 25.

Heck, why not start at 18?  Probably because of the inevitable "what 22 year old can save $5000????" comments.

[MDM]

How come these articles always start at 25? If you go the high school to college and out in 4 years route shouldn't you start at 22. Or is that not as pretty of a number as 25...granted I did start actually saving at 25.

Don't know.  Could indeed be that 25 is just a "nice round number."  Also could be that age 25 is when a significant-enough fraction of the population would pay attention to the message.  Or, ____________ (insert your favorite idea here).

[astvilla]

well majority of students don't actually have savings. most are in debt and most don't actually have a decent paying job to think about saving. the job they have either is minimum wage (which is incredibly difficult to survive on, especially depending on area you're in) or not enough to support lifestyle they want, (which should be fixed). 25 is probably when they start actually thinking serious about life, especially when so many students are in graduate school of some kind. i think 25 is just an easy number that probably represents well the average age it takes to get a job that can become a career, not a minimum wage type of job.

[dll]

Why is this article only relevant to Americans?

[arebelspy]

Why is this article only relevant to Americans?

That was the title of the article, thus why it's in quotes for this thread title.

I'm assuming the target audience for the article was for mostly Americans. 

But yes, it applies to pretty much any young person.

[MrsCoolCat]

Darn, I'm starting a couple of years after the 25 mark but going going... I'm a bit saddened to say no to these lavish invites to vacations with a friend that's getting married, but I never took lavish vacations to begin with (just many of them), so perhaps I'm just daydreaming of being anti-Mustachian. :-D

[brooklynguy]

Joshua Kennon wrote about this article today:
http://www.joshuakennon.com/power-compounding-student-loan-debt-communism-stealth-wealth/

I have absolutely no idea who this guy is, but as I was perusing MMM last week, somehow when I woke up from a doze his blog was on my screen. Really great content, and this eclectic post in particular is so well thought out and written. A highly recommended read. Thanks for the link, Vegas!

I'll second that -- really great article.  But the passage at the beginning bemoaning the current state of affairs in internet forums reminds me how much I appreciate this place, which is an exception to the general rule that discussions inevitably devolve into a "race to the bottom as the loudest, rather than the most informed, opinions dominate."  This forum is pretty close to a perfect marketplace of ideas.

[boy_bye]

Hey guess what, have kids when you're financially prepared, not when you "feel ready."

If there is a single life decision that people are universally poor at making, when and how to have children has got to top the list. 

We're biologically wired to procreate.  It's deeper in our DNA than the desire for a fast car or a shiny new TV, much less a bulging IRA.  Asking people to show logical discretion when presented with the urge to have sex with each other is like telling a starving man he can taste but not swallow.  It's almost impossible to overcome the impulse, so I sort of understand why so many of them choose poorly.

Let's be clear -- we are biologically wired to want to have sex. I have never felt any biological urge to procreate. It's just that for the vast majority of human history, procreation was the inevitable result of doin' it.

But it's not now, and you kind of can't overstate the importance of this. There are still lots of people without access to contraception, and there are still people who don't think much about the future, but I expect this to continue to improve over time to the point where there are more parents who truly want to be parents, and fewer who accidentally ended up there.

In conclusion I think every young person should be taught what there is to know about human sexuality and reproduction and, most of all, contraception ... Then they can move on to the magic of compound interest.

[arebelspy]

Joshua Kennon wrote about this article today:
http://www.joshuakennon.com/power-compounding-student-loan-debt-communism-stealth-wealth/

I have absolutely no idea who this guy is, but as I was perusing MMM last week, somehow when I woke up from a doze his blog was on my screen. Really great content, and this eclectic post in particular is so well thought out and written. A highly recommended read. Thanks for the link, Vegas!

I'll second that -- really great article.  But the passage at the beginning bemoaning the current state of affairs in internet forums reminds me how much I appreciate this place, which is an exception to the general rule that discussions inevitably devolve into a "race to the bottom as the loudest, rather than the most informed, opinions dominate."  This forum is pretty close to a perfect marketplace of ideas.

Every forum thinks they're the exception.  ;)

[arebelspy]

Let's be clear -- we are biologically wired to want to have sex. I have never felt any biological urge to procreate. It's just that for the vast majority of human history, procreation was the inevitable result of doin' it.

But it's not now, and you kind of can't overstate the importance of this. There are still lots of people without access to contraception, and there are still people who don't think much about the future, but I expect this to continue to improve over time to the point where there are more parents who truly want to be parents, and fewer who accidentally ended up there.

If that's the case, why aren't all of the people who have access to contraceptives having sex and not procreating?  It seems like many of them are still choosing to procreate (biologically wired to or not).

Sol's blanket statement isn't true for everyone, sure.  You may not want to procreate, but just have sex. But your blanket statement has the same flaw, it's not true for everyone.  There are people who aren't biologically wired to have sex.

Overall I'd say most people are biologically wired to do both, even if there are some exceptions to both.

[boy_bye]

Let's be clear -- we are biologically wired to want to have sex. I have never felt any biological urge to procreate. It's just that for the vast majority of human history, procreation was the inevitable result of doin' it.

But it's not now, and you kind of can't overstate the importance of this. There are still lots of people without access to contraception, and there are still people who don't think much about the future, but I expect this to continue to improve over time to the point where there are more parents who truly want to be parents, and fewer who accidentally ended up there.

If that's the case, why aren't all of the people who have access to contraceptives having sex and not procreating?  It seems like many of them are still choosing to procreate (biologically wired to or not).

Sure. But it's a choice now -- women don't have to bear children they don't want anymore, regardless of how much sex they have. That was never the case before. A hundred years ago, a married woman like me who did not feel the urge to procreate but who did like having sex would very likely still have had some (possibly a lot of) children.

I was only trying to point out that not everyone feels the need to procreate, and for the first time in human history, this decision has a way of being honored. I agree with you that many people do still feel motivated to have both sex and children, and others have no sexual urges as well. The nice thing about living in this time is that all of those choices can actually be lived.

(Sorry for the foam)

[Spe]

This post shows why FILO (First in, last out) is an important strategy.

If you are going to invest in a s&p 500 index fund then you should invest in s&p 500 index fund type A for X amount of years and then stop investing in that fund and start investing in s&p 500 index fund type B.

And when you take start to take out money you should take it from index fund type B first because thats the fund you invested in the last period of time. That way index fund type A can benefit from the interest interst interest interest effect.

I am terrible at explaining this in english as it is not my first language, but do you guys know what im trying to explain?
This tactic works because you dont have to pay tax of the index fund until you are selling it.

[Gmullz]

How come these articles always start at 25? If you go the high school to college and out in 4 years route shouldn't you start at 22. Or is that not as pretty of a number as 25...granted I did start actually saving at 25.

We're at the point in modern society where I don't think anyone expects someone <25 to have their shit together.

I went to community college, so I started working full-time in IT at 19, two months before my 20th birthday. When I look at what my net worth was at 25 compared to my career earnings since 19, it's pretty sad. But still probably 15-20% of earnings, so just bad by comparison to what I've been doing since turning 25.

edit: Kinda of revived a dead thread. My bad.

[Dicey]

How come these articles always start at 25? If you go the high school to college and out in 4 years route shouldn't you start at 22. Or is that not as pretty of a number as 25...granted I did start actually saving at 25.

We're at the point in modern society where I don't think anyone expects someone <25 to have their shit together.

I went to community college, so I started working full-time in IT at 19, two months before my 20th birthday. When I look at what my net worth was at 25 compared to my career earnings since 19, it's pretty sad. But still probably 15-20% of earnings, so just bad by comparison to what I've been doing since turning 25.

edit: Kinda of revived a dead thread. My bad.

Gmulz, yours is  great message. The good news is that you will have to save even less to reach FI. This topic is so important that there is absolutely no "bad" about reviving it. Let's just say you gave it a healthy bounce.

[RapmasterD]

I expect that once you're 21 you have your shit together -- not ALL of it, but you should be on the path and making measurable progress. But hey, I kicked a soccer ball five miles to elementary school every morning through 20 feet of snow.

[Dicey]

I expect that once you're 21 you have your shit together -- not ALL of it, but you should be on the path and making measurable progress. But hey, I kicked a soccer ball five miles to elementary school every morning through 20 feet of snow.

Uphill both ways?

[lovesasa]

How come these articles always start at 25? If you go the high school to college and out in 4 years route shouldn't you start at 22. Or is that not as pretty of a number as 25...granted I did start actually saving at 25.

We're at the point in modern society where I don't think anyone expects someone <25 to have their shit together.

I went to community college, so I started working full-time in IT at 19, two months before my 20th birthday. When I look at what my net worth was at 25 compared to my career earnings since 19, it's pretty sad. But still probably 15-20% of earnings, so just bad by comparison to what I've been doing since turning 25.

Yeah, this... I started working as a soccer referee at 14 and raked in a few hundred dollars a weekend, then later got other jobs. When I was younger I knew it was important to save, but I didn't really understand why, so I would end up with a few thousand dollars and then blow it all on ultralight backpacking gear or some other crap I didn't really need. I worked all through high school and college and don't have much to show for it except for a fancy road bike and some nice furniture sitting in my mom's garage. Because... What else was I doing with the money? I understood the importance of saving but I didn't really know what to do after that. In hindsight, I should have saved that money and used it to pay for college instead of student loans. So yeah, I definitely didn't have my shit together before 25.

Now that I am 25, I've been making steady progress on paying down my student loans (about $10K left!) and am at a point where I realize the importance of saving for the long run. Still, most people around me are clueless so it's helpful to have reminders like this chart to kick back in why it is I'm doing what I'm doing. Even starting today, if I do nothing but max out my Roth IRA I'll be ok for a traditional retirement. I know and understand the math but it still blows my mind sometimes. These reminders help to build goals and instill a sense of urgency to realize how important this is, even if I -am- way ahead of my peers.

Now once my loans are paid off (this year!!) and my Roth IRA is maxed (also this year, most likely!) what to do next is the baffling thing. (I don't work in the US so no employer match or 401k.)

[Beric01]

What I find funny is that if I took what I will have by the end of this year (I turn 25 this year) and never invested another dime in my life, I would have enough money to retire when I hit 65. And I've only been working/saving real money for 2.5 years (nor do I make six figures). That's the power of compound interest.