Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Friday, December 30, 2011

Suggested Resolution

Source: Capital Pixel
Resolve to start or bolster your investment program.

If you are young:  congratulations!  One of the first principles of personal finance is to start investing early to take advantage of compounding.

Decision makers understand that taking no action is in fact a decision.  You can wait until you are 65 years old and then, after blowing out the birthday candles, figure out how you are going to produce an income to live on.  You can live on the financial edge. You can believe that things always work out.  You can procrastinate.  Know, though, that there are always things in the modern economy to sop up 100% of disposable income.  The best and the the brightest among us are working 24/7 to produce goods and services you'll want to spend your income on.  It is the way our economy works.  Too many procrastinate for 45 years.

There are plenty of seniors out there who would caution against this approach.  Many "have been there done that!"  Talk to them.  A wave of baby boomers are now retiring, and a goodly percentage will struggle financially.  They have definite thoughts on what they would have done differently both in terms of how much they saved and invested but also in how they invested.

As an aside, if feasible, ask your company human resources department to arrange a seminar featuring company retirees.  Ask the retirees to talk about retirement - how it was, what they expected, and some of the surprises, what they would do differently, and what they planned for correctly.  It can be an eyeopener and very helpful for all company employees.  Feed the retirees a nice lunch.  They will enjoy talking about their experience.

Many younger workers argue that they plan to work way past the accepted 65-year-old standard retirement age.  Good luck - the data shows that people don't work as long as they expect.  They get laid off/outsourced.  Medical problems come up.  And, yes, people burn out.  Then many  turn to Social Security and maybe take a part-time minimum wage gig.  The third leg of the stool - the so-called "nest egg" - has to take up the slack, and only 4% of that can safely be spent, according to a widely-used rule-of-thumb.

Another course is to take action now.  You can resolve to understand your company benefits.  You can resolve to read at least one good book on personal finance this year.  You can resolve to start thinking about what you need to do to have choices in the future and to support yourself and your family in the event you can't work.


Tuesday, December 27, 2011

Get Me Into the Market

Source: Capital Pixel
One of the questions I have potential clients answer is why they are seeking the services of RW investment Strategies.  This, of course, points me, as an advisor, in a particular direction and tells me a lot about whether I can help them.  A frequent answer is that they need help getting into the market.

This, in fact, is one of the best reasons to seek the help of an advisor. Often, I'll find that potential clients have poorly timed the market by buying in after the market has gone up.  They then wring their hands and stress out as they watch their portfolio drop, only to sell out at the wrong time.  After selling out, they have to watch from the sidelines as  the market rises.  This, of course, is the emotional roller coaster investors ( I use the term loosely) needlessly ride.  And - it is costly!

2011 has been a case in point.  I find investors have pulled their hair out as they've witnessed and reacted to 400-point swings in the market by capitulating at the wrong time and seeing now that market indices are  positive for the year.

This is the point where they show up on my doorstep.

Some appreciate the advice I give them by acting on it in timely fashion.  Others, despite my best attempt, don't.  They will walk away and, if the market moves 15% higher, jump in.  Basically they will continue the behavior that has been harmful in the past.  This, of course, is a phenomema that is not confined just to the financial arena.

Get Into The Market

I'm a proponent of indexing.  This makes getting into the market easy.  If you have a brokerage account and we meet at 9:30 a.m., I'll have you in the market by 10:30 a.m. at the latest.  We won't try to pick stocks or sectors.  We won't discuss macroeconomic developments.  We won't even try to guess what China and Europe have up their sleeves.  What we will do is buy the whole market.  If you are with Schwab, we'll buy SCHB.  If you are with Vanguard, we'll buy VTI.  With others, we may buy IWV. These are all low-cost, broad market exchange traded funds.

The bond portion is just as straight forward.  We use low-cost exchange traded funds that are indexed to broad portions of the fixed income market.

How much will we buy?  How much in stocks and bonds?  This takes a bit of time and collaboration.  It is why we might need until 10:30 to get you invested.  We'll talk about your goals and take into account answers to other questions on the questionnaire.  We'll determine an appropriate asset allocation model that targets a given percentage in stocks and fixed income.

If the appropriate model is 70% stocks but you are very leery of the market, we might start with 60% stocks.

A number of factors come into play, but the bottom line is you'll be in the market.

12-Months Experience

Some people are wondering what the big deal is.  Over the past 12 months ended 12/23, the "Moderately Conservative Benchmark" specified by Schwab returned 3.13%.  This benchmark is comprised of 60% bonds and cash and 40% stocks.

In comparison, your money fund probably returned on the order of 0.1%.  Even if you had money in a certificate of deposit, you likely earned only slightly above 1%.  Thus, the opportunity cost of not being in the market and riding out the craziness that has taken place over the past 12 months has been meaningful.  In fact, although the benchmark return at 3.13% is below the rate of consumer inflation over the past 12 months ,it is at least close to tracking it.  Money fund performance, in contrast, has been hammered by inflation.  This is a risk many fail to appreciate.

As a point of reference, markets over the past 12 months have bordered on the insane with a government that was totally inept, a Europe that has struggled all year with the possibility of a breakdown, China slowing, and a stubbornly high rate of unemployment in the U.S.  All of these scary factors and excuses have kept investors on the sidelines and have been costly.

2012 will very likely be just as wild.  Should you be in the market?

Disclosure:  This post is for educational purposes only.  Market returns are unpredictable.  Individuals should do their own research or consult a professional before making investment decisions.

Monday, December 26, 2011

Market Predictions

This is the season of predictions and forecasts.  Pundits are getting a lot of air time and magazine space trotting out all kinds of charts and esoteric facts to support highly specific predictions on where markets are headed.

If you are like a lot of investors, you will be impressed.  In fact, crystal ball seers in the market are usually introduced by citing a time in the past when they made accurate predictions. 

What should you make of them?  Sometimes potential clients reel off well-known pundits' names and their forecasts.  They say so-and-so says the market is headed higher/lower or gold is going to $ _____/oz. etc.  They want to know what I think.

I patiently explain that I can get super smart, very articulate people to give well-reasoned, highly-believable arguments on both sides.  Jeremy Siegal (author of Stocks For the Long Run), for example, will argue forcefully that stocks are headed higher while Bob Shiller (author of Irrational Exuberance) will take the opposite side and say that now is not a good time to buy. 

What you don't see are all those in the gutter because their predictions turned out horribly wrong.  You won't see Miller, Paulson, Berkowitz, et al.  Sometimes this gets through; often times it doesn't.  After all, some people have their whole view of investing grounded in predicting which stocks and which sectors will do best.

If I thought forecasting was useful, I'd probably go with the most recent presenter given that they are so persuasive.  But I don't think it is useful.  In fact, it is harmful, IMHO, because many times investors use these forecasts as a  substitute for thinking; and when forecasts start to go awry, emotions come into play and the investor is set up for a stressful period that typically ends badly.

Larry Swedroe is the director of research of Buckingham Asset Management, LLC and a well-known proponent of index investing.  Here is his response when asked to make a forecast of macroeconomic events:
 From interview of  Larry Swedroe by "Seeking Alpha":

SA: Global Macro considerations dominated the headlines in 2011. Do you see 2012 unfolding differently? If so, how?
LS: Yes, it is always different, but my crystal ball is always cloudy. So I don’t make forecasts. Investors should learn what Warren Buffett knows: A market forecast tells you nothing about where the market is going but a lot about the person doing the forecast.
       There are good studies on the ability to forecast and the only thing that correlates with accuracy is fame, and the correlation is negative:  The more famous the forecaster, the less accurate the forecast.

Friday, December 23, 2011

Why Are Interest Rates So Low? (Part 8)

In this final, 4-minute Khan Academy video on currencies, "China Keeps Peg But Diversifies Holdings," Sal notes that China's holdings of U.S. Treasuries are decreasing as they diversify their holdings but other countries holdings of Treasuries are increasing.  In fact, globally the rest of the world has to do something with the excess of the amount we buy from them versus what they buy from us, i.e. our trade deficit.  They buy Treasury issues because they are liquid and safe and can be bought in very large amounts.

So, the end result is that China buys Treasuries to peg their currency below the market rate which results in a humongous demand for Treasuries, driving Treasury prices higher and rates lower.  This is a major factor holding U.S. rates low and expanding the U.S. trade deficit.  It holds Treasury rates lower than they would be otherwise as well as the rates on other issues. B y doing this, China is able to build their manufacturing base.  Eventually they should reach the point where they create a middle class to buy the goods they produce.

To me, the Khan Academy videos are a treasure.  For those interested in understanding how the economy works and financial markets, I suggest visiting the site on a regular basis and viewing the videos systematically.  To keep up-to-date on events, check out the new videos he is constantly producing.  Eventually your understanding of markets will become much more sophisticated.  I actually believe that many big-time money managers didn't fully appreciate the impact on rates described by Sal in the videos we have viewed this week.

Thursday, December 22, 2011

Why Are Interest Rates So Low? (Part 7)

In today's Khan Academy video, "Debt Loops Rationale and Effects," Sal looks at the positives and negatives--for both China and the U.S.--of the on-going pegging of the Yuan on global markets.  He discusses the likely outcome once the process is halted and the result when it is reversed.  Very simply, it has held interest rates low and enabled the U.S. to finance its massive debt at historically low interest rates.  Understanding this whole dynamic is crucial, IMHO, for the DIY investor going forward because it will be a driving force.  In fact, it could be the driving force of the next big crisis - banks hold Treasuries!  Central banks around the world hold the dollar as a reserve currency in the form of Treasuries.

Wednesday, December 21, 2011

Why Are Interest Rates So Low? (Part 6)

In this Khan Academy video, "American - Chinese Debt Loop," Sal explains the effect of China pegging the Yuan, lending the U.S. funds via the buying of Treasury securities, and thereby contributing in a major way to low U.S. interest rates.  U.S. Treasury rates affect other U.S. rates as well, along with global interest rates.  Furthermore, low interest rates push global investors out on the risk spectrum - after all, individual investors, pension funds, insurance companies, et al. aren't satisfied with miniscule rates on the least risky assets being affected by this process.

Understanding the process leads naturally to the questions of how it gets unwound and what happens if and when the Chinese get tired of holding U.S. assets.  Not long ago, Fed Chairman Greenspan wondered why long-term Treasury note yields didn't rise as the Federal Reserve raised rates from the 1% level in the latter part of 2004.  His so-called "conundrum" is partially explained by the process explained here by Sal.

Enjoy the video:

Tuesday, December 20, 2011

Why Are Interest Rates So Low? (Part 5)

In this 16-minute video, Sal of Khan Academy takes us real close to understanding an important dynamic taking place in the global capital market that has held interest rates down and has been a bit underappreciated.  Here he shows how the Chinese Central Bank needs to constantly print Yuan and use that Yuan to buy U.S. dollars to maintain the peg between the Yuan and the U.S. dollar.  They do this to produce an ongoing trade surplus with the U.S. - i.e., to sell more goods to the U.S. than it buys from us to support its industries.

The key is what they do with the dollars bought with the Yuan they print.  As Sal points out, they need to put this massive accumulation in something that is safe and liquid, i.e. U.S. Treasuries.

Just this morning there is a report that Japan wants to increase the amount it can intervene with in currency markets to prevent the Yen from rising further.  So this whole process is not just unique to China.  Countries have an incentive to keep their currencies from appreciating versus the world's reserve currency!

Enjoy the video:

Monday, December 19, 2011

Why Are Interest Rates So Low? (Part 4)

The previous 3 posts presented short videos from the Khan Academy that covered some basics of international trade.  They showed a simple example of how a trade imbalance is resolved in a market of freely floating exchange rates.  They showed how currencies and prices adjusted.

Today's 7-minute video presentation, "Pegging the Yuan," takes us closer to the real world.  It begins to look at what happens if China wants to keep the currency at a level where demand for its goods stays high.  How does it do this?  What is the effect on U.S. interest rates?

This is especially interesting today because, as most market observers know, investment professionals expected Treasury yields to rise this year; and they actually fell.  It seems that, while everyone was focused on a Fed that was undertaking unprecedented monetary stimulus, less attention was directed to what the Chinese were doing in the currency markets.

Sunday, December 18, 2011

Why Are Interest Rates So Low? (Part 3)

The last two posts have looked at how a trade imbalance gets worked out in a freely floating exchange rate environment as explained by Sal Khan.  Today's 10-minute video,  "Currency Effect on Trade Review" brings it all together and shows how the quantity demanded for dolls and cola adjust, along with prices, to result in balanced trade.

This sets the stage for what is happening in the real world with China controlling its currency and the role of U.S. Treasuries, which will be taken up next.

Saturday, December 17, 2011

Why Are Interest Rates So Low (Part 2)

Yesterday we looked at the first short video of 7 that explains why interest rates are so low.  The effect comes from the global currency markets and, in my vie,  is an effect that hasn't been fully appreciated by investors - even very sophisticated investors.

Today's Khan Academy 14-minute video shows, in very basic terms, how freely varying exchange rates eliminate trade imbalances.  Notice especially, at the end, how prices in the countries change.

Again, this is leading to a fairly sophisticated understanding of the impact of controlling exchange rates and demonstrates that the economics investors need to understand can be presented without esoteric mathematics.

Friday, December 16, 2011

Why Are Interest Rates So Low?

I have previously touted the Khan Academy videos produced by Sal Khan. They are a revolution in education produced by a gifted teacher.  Bill Gates, in fact, has called Sal Khan his favorite teacher.
This is the first of 7 videos that takes the viewer into the world of currency exchange and shows how China's controlling its currency has an important influence on U.S. interest rates.  The videos are approximately 12 minutes in length.  Although most readers won't appreciate it, the typical way this information is presented is by using esoteric mind-numbing mathematics which, in the end, detracts from the fundamental principles presented.  Watching the 7 videos over the next several days will contribute to making DIY investors considerably more sophisticated.

In this first video, Sal takes us through the dynamics of an imbalance in the demand for U.S. $s versus the Chinese Yuan.

Tuesday, December 13, 2011

Socially Responsible Investing - Thoughts

Source: Capital Pixel
Last week I met with a client who held the Calvert Enhanced Equity Fund (CMICX).  This is a socially responsible fund.  It carefully screens stocks and selects only those that fit strict criteria in terms of their lines of business.  For example, many socially responsible funds would avoid tobacco stocks, military oriented stocks, etc.

My investment approach runs into a fundamental hurdle with these types of funds - they are typically very expensive.  For example, Morningstar reports that CMICX has expenses of 2.23%, a load of 1%, and turnover of 111%!  Yikes!

Not surprisingly, Mornningstar reports that CMICX achieved a return of 0.75% over the past 10 years versus 2.84% on the S&P 500 index.,- a huge give-up over this time frame.

In keeping with the "creative juices" theme of the past couple of posts, I suggested the client think of directly buying the stocks of the fund.  This client, by the way, has the time to do this--which is, obviously, an important consideration.  Partial duplication keeps the client in a values-investing mode and hopefully leads to better long-term performance by avoiding the high expenses.

To carry out this approach, the client was directed to Yahoo! Finance.  There they can put in the ticker symbol (CMICX) and on the right side click "more fund holdings." This would get them to:

Source: Yahoo Finance
CLICK IMAGE TO ENLARGE. The suggestion would be to create a 10-stock portfolio with 10% invested in each issue.  This represents 35%, approximately, of the total portfolio.  The client would have to check back quarterly to readjust on the basis of an updated listing.  These may be substantial, given the reported turnover!  In effect, this is a "poor man's index."

There obviously will be some difference between returns of the fund and the constructed portfolio  a type of basis risk), but it will satisfy the socially responsible criteria and avoid some heavy long-run expenses.

In fairness to Calvert, they do work hard to manage these funds, screen the stocks on the basis of strict criteria, and have some that perform well over the long term.  My perspective is to give my clients the best possible shot at a successful retirement.

As a final point, this approach can be used for any high-priced fund by those willing and able to take on the risks mentioned.

Disclosure:  I do not own the funds mentioned here but do own some of the stocks listed.  This post is for educational purposes only.

Monday, December 12, 2011

Trading Bonds (Part II)

Source: Capital Pixel
Yesterday we looked at the idea of bond trading on the basis of yield spreads.  Underlying this idea is that there is so-called "reversion to the mean" when it comes to yield spreads.

We looked at a set of data showing that, on average, selling IEF (a 7 - 10 Treasury ETF) and buying HYG ( a high yield ETF) resulted in a take out of $10.42.

Today HYG is $87.26 and IEF is $104.43 for a take out of $17.17! In other words, HYG is much cheaper relative to IEF than it has been on average.

This can also be expressed in terms of yield.  At $87.26, HYG is yielding 7.97%; and, at $104.43, IEF is yielding 2.69%.  The pickup in yield by moving IEF to HYG is, therefore, 5.28% (7.97 - 2.69).

Hopefully, this gives some insights into how bond traders shift among sectors of the bond market.  My plan is to revisit this trade in a couple of months to see how it works out!

Disclosure:  The information here is for educational purposes.  I hold HYG and IEF in client accounts.

Saturday, December 10, 2011

Trading Bonds

Source: Capital Pixel
This post is for the active DIY investor who would like an approach  for  the fixed income portion of the portfolio.  It is presented solely as an idea to get the creative juices flowing.  In fact, in the end, the best approach for most DIY investors is to just buy the market, via AGG or BND which tracks the Barclay's Aggregate Index, i.e. the overall bond market, and forget it.

There are others who take investing as a challenge.  They like to try to "beat the  market" - at least for a portion of their assets.  They have a lot of time to study the market.  They spend considerable time researching stocks but are stymied when it comes to the bond portion of their assets.

Should I Try to Predict Interest Rates?
Serious investors understand that bond yields and bond prices move in opposite directions.  This, then, suggests that predicting interest rates is the natural way to outperform the bond market.

Sadly, as most professional bond managers will tell you, predicting interest rates is like predicting stock prices - it is a losers game.  2011 has been an excellent example of this.  When yields had been considerably higher than where they are today, most pros predicted yet higher rates.  Instead they dropped sharply; and, as a result, some of the most high-profile bond managers underperformed the bond market significantly.  So much for predicting rates.

Trade the Spread
Instead, many pros will tell you it is considerably easier dealing with spreads.  This is what I want to look at here.

A simple under-appreciated fact, IMHO, is that bonds are fundamentally different from stocks in that we know the future price of a bond.  For example, if we buy a 5-year Verizon bond, we know that at the maturity date the price of the bond will be $100 (for $100 in principal).  Obviously, if we buy Verizon stock, we have no idea where the price will be 5 years from now.

This gives special meaning to the much discussed "reversion to the mean" concept.  Think about it like this:  the price of a Verizon bond, for example, can wander all over the place depending on how investors feel about risk; but, in the end, it has to track closer to Treasury yields as it gets closer to maturity.  This is true in spades when a portfolio of bonds is considered.

I find it interesting that professionals spend a lot of time studying and trading on the basis of yield spreads and yet, despite all of the investment information on line, yield graphs are not easy to find!  In fact, I had to create my own data for this simple exercise to illustrate this idea of investing on the basis of yield spreads.

In thinking about what we are trying to do, first consider two bonds:  a corporate bond and a government bond.  Assume the Treasury bond yields 5% and the corporate bond yields 7%, i.e. the spread is 2%. Then, if the spread goes to 1.5%, it means that the price of the corporate bond has risen (or decreased less) relative to the price of the government bond - remember:  bond prices rise when bond yields drop. The idea then boils down to this:  buy corporate bonds when yield spreads are wide and you are getting paid to take on risk, and sell and go into Treasuries when the reward-to-risk is not so appealing. Professional bond traders spend a lot of time doing exactly this - studying yield spread graphs in their search for value.

Data Analysis
So, to begin I first found some historical yields.

I collected monthly yields on Moody's Baa rated bonds (Baa is actually the bottom of the investment grade category) and the 5-year constant maturity Treasury note going back to November 2005.  I then took the difference in the monthly yields and calculated the average.  At the end of November, the Baa yield was 5.14%, the Treasury note yield was 0.91%, and so the spread was 4.23%.  The average over the whole period for this spread was 3.58%.  So, as a first cut, a bond trader would say the Baa corporate "has value."

On the other hand, if the spread was less than the average of 3.58%, bond traders would typically prefer the Treasury.  In other words, they would say an investor is not getting paid enough to take on the risk of the corporate issue.

2011-04 6.02 2.17 3.85
2011-05 5.78 1.84 3.94
2011-06 5.75 1.58 4.17
2011-07 5.76 1.54 4.22
2011-08 5.36 1.02 4.34
2011-09 5.27 0.9 4.37
2011-10 5.37 1.06 4.31
2011-11 5.14 0.91 4.23

AVG. 3.58
 Again, the above is a partial listing of the data.  The column headed by 6.02 is the Baa yield, the next column is the Treasury note yield, and the final column is the "spread," i.e. the difference.  The average is for the whole period going back to the of 2005.

Hopefully you get the idea at this point - the adept trader who sold corporates on 4/2011 at a spread of 3.95% could buy them back considerably cheaper on 11/2011 at a spread of 4.23%.

Let's go a step further and think about the best way for a DIY investor to exploit spreads.  For this purpose, I collected price data, back to 4/2007,  on HYG (high yield bond ETF) and IEF (7 - 10-year Treasury note ETF).  A significant positive here is that these are low-cost, highly-diversified investment instruments appropriate for the DIY investor.  HYG is a good choice for up to 5% of a portfolio for the fixed income portion of most DIY portfolios.  The question is when is a good time to buy?

Below is a partial listing of my data.  The difference here is that we are looking at prices.  The prices of the funds go up when bond prices rise, i.e. yields fall.  If yields on high yield corporates fall more than yields on Treasury notes, then HYG will rise more than IEF will and vice versa.  The spread reflects confidence in the economic recovery, etc.  When the spread is large (on an absolute basis), it means you have to pay a lot (example:  10/2010 at -12.52) for the safety of Treasuries - this is the time to buy HYG! As you can see, by early 2011, HYG had appreciated in price (from 83.04 to 86.93) and IEF had actually declined!  If you go to the earlier chart and collect the yield data, you'll find that the spread over the same period dropped from 4.59% to 3.92%! 

Hopefully this gives you a bit of an idea how spread information can help position the fixed portion of the portfolio.  There are, of course, other areas of the market, including mortgage-backeds, single-A corporates, etc., where this approach can be used profitably.  Keep in mind that the yield advantage of sectors relative to Treasuries brings time into the process.  This post is intended for educational purposes. Individuals should consult with a professional and do their own research.  I hold ETFs mentioned above.

2010-10 83.04 95.56 -12.52
2010-11 81.99 94.7 -12.71
2010-12 84.26 91.45 -7.19
2011-01 85.67 91.43 -5.76
2011-02 86.9 91.24 -4.34
2011-03 86.93 91.1 -4.17
2011-04 88.32 92.78 -4.46
2011-05 88.44 95.1 -6.66
2011-06 87.93 94.62 -6.69
2011-07 88.25 97.62 -9.37
2011-08 85.84 102.16 -16.32
2011-09 81.29 104.45 -23.16
2011-10 88.19 103.1 -14.91
2011-11 86.05 103.7 -17.65

AVERAGE -10.42

Wednesday, December 7, 2011

2012 Dividend Aristocrats

Dividend aristocrats are S&P 500 companies that have increased dividends for 25 years in a row.  There are 50 companies on the list.  A listing, including number of years dividends have increased for each company, has been produced by Dividend Growth Investor.  Note that near the bottom of the post is a listing for so-called "Dividend Champions."  This is a broader listing with less stringent capitalization requirements.

These lists are excellent starting points for those building a portfolio to create a specific income stream as well as those just looking to pick up a little yield.

Saturday, December 3, 2011

Heroes Breakfast Speech

 Worth watching and reflecting on. Found on Biz of Life site.

Paul Tudor Jones II- 2011 Heroes Breakfast from Robin Hood on Vimeo.

Friday, December 2, 2011

Great Holiday Gifts!

The joy of the holidays brings the stress of choosing gifts.  Some of us will participate in that sanity-testing tradition of "Secret Santa" and draw the name of the least liked or least known person in the office or even (yikes!) the boss. Others stress over getting something for someone in a different age bracket with tastes they can't relate to.  Still others dread meandering in crowds of rude shoppers trying to get a feel for what's out there.

Here's a couple of suggestions.  Just about everyone at a certain stage in life can profitably read the following two books.  They are especially well suited for the person or couple who are in their first few years following college . This is a period where people are making financial decisions that will significantly impact their lifetime well-being.

Book #1 is Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School by Andrew Hallam.  A very quick read, even for the financial novice, this book yields insights that provide value over a lifetime.  I would suggest that a couple read it together and discuss it.  To get an idea of Andrew Hallam's writings, visit his blog.

Book #2 is I Will Teach You To Be Rich by Ramit Sethi.  Again, this is a book that young people will find invaluable.  To get an idea of Ramit Sethi's writing,s visit his blog.

Both books are available as paperbacks and are life-changing and inspirational.