Let’s start with definitions.
“Investing” will mean a)buying stocks or bonds, b) starting a business using money you have saved or, if absolutely necessary, borrowed, or c) getting educated.
“Young people” will mean anyone with spare cash and desire for more of same, without necessarily, um, you know, working, and under the age of oh, say, 40.
“Educated” will mean actually learning something, as opposed to what some call “seat time” in a classroom setting, which we call “schooled.”
We oppose borrowing of any kind EXCEPT for capital investment purposes. This is where many women get in trouble. They correctly fear debt, but don’t realize that borrowing for business purposes, if done with proper advice, can be the difference between success and failure. Men, OTOH, often borrow with abandon and fail often.
Failure, BTW, is not necessarily a bad thing, if you figure out how and why you failed. You won’t make THAT mistake again!
Okay, so where do you get spare cash? To IFO’s generation this is a laughable question. Answer: you save money from earnings! If you are living at home, save 90% of what you earn. If you are single, set a goal to save 50% or more of what you earn.
Where do you get earnings? Again, a laughable question for earlier generations, not so funny now. Government regulations prohibit young people under 16, or maybe soon, 26, from working.
We have actually read highly disapproving articles about young people who work and attend school, especially High School (!), at the same time. Where is their time for parties, sports, just hanging out? It didn’t occur to the disapprover that the kids a) loved their job, b) needed their job or c) just wanted to get out of the house!
Besides, hanging out is boring, parties are scary or dangerous (drinking? drugs? sex?) and sports are expensive and time-consuming. Sports, however, can lead to a satisfying life with tons of spare cash if done properly
All of IFO’s advice about investing can be equally applied to engaging in sports. Her only caveat – you must love the sport.
Actually, you can think of investing as a sport. Both require experience, desire for success/excellence, commitment, good coaching and mentoring, and lots and lots of practice.
Back to the topic of a “job.” In school, you may have learned that working on a job can be soul-crushing, boring, exhausting, just generally unrewarding. Anyway, you must go to college first. In the UK, that attitude is not universal. The article accompanying the illustration above, has a good discussion of job training.
Besides, it’s impossible to get a job without a college degree, isn’t it? You are also told you have to have work experience to get a job, but if you can’t get a job, how can you get work experience? So, go the depressing, and incorrect memes.
Anyway, the story goes, you’ll be missing out on all that “fun.” These days are the best days of your lives – enjoy them! Bull feathers! The best is yet to come! Even today, with all the regulations and parental and pedagogical anti-job commentary, anybody can either get a job or make one for him/herself.
For many young people, their first job is their first real learning experience. They learn about the industry they are in and the managers/business owners they work for. They get coaching about how to do their job, then they are handed the responsibility to actually do that job.
Getting and taking responsibility can be a real eye-opener. And this is true whether they love or hate the work. Ask your grandparents about their first job and be prepared for lots of stories and lessons, usually told with a lot of laughing.
So endeth Part One or our promised series on Investing for Young People. Tune in tomorrow for Part Two – Get a job? Or make one?