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 http://www.rwinvestmentstrategies.com. 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.
Saturday, May 4, 2013
A huge hurdle in teaching financial literacy to young people is that it isn't yet relevant. Taking the step to actually owning shares can be the necessary step towards relevance. It gives them "skin in the game."
An important teaching point is that this is an investment for 45 years into the future. This whole exercise will put a young person miles ahead of the typical new hire out of college struggling in his or her first human resources meeting, where some rep of a mutual fund provider is describing investment choices. I stress this because I constantly see smart young people who come to me and seek advice on how to invest their 401(k). They don't know whether they should max out on their 401(k) or fund an IRA, and they don't know what funds to choose and how to allocate the contributions.
Starting with a small initial investment early on could very well spark an interest in the process of investing appropriately for one's retirement and even managing family finances.
After taking the steps to getting invested at a young age, students should grasp the importance of starting early down the investment road. Here is a really good discussion-provoking post on the power of compounding by Joshua Kennon, "A Short Lesson On The Power Of Compounding." Pounding home the importance of investing young gives young people the means to have choices later in life and thereby to enable their family to enjoy life more - there are few gifts that can be more meaningful.