|
Post by steelpony10 on Mar 17, 2023 14:59:44 GMT
richardsok , Investing has a psychological component also as you know. My experience is markets move in waves, tides come in and out plus troughs are of different widths and depths and speed is variable. I see no reliable solution to control that situation and values are out of my control. Sure plunges bother me but I don’t need values yet to have a great retirement. So a Plan B in our case if we ever need to spend down. I had a steady paycheck so I created another one for retirement, SS plus my own income to fill the gap. Paid on time each month no matter what markets do or values are. Easy to set up, manage as we age, with raises, pass on etc. Facts I can control. Addressing your concerns, we had 4 teenagers at once so I learned to ignore frustration for my own long term health. You’re correct income investments plunge in value at times like everything else but some cash always flows same as when values increase. That’s all I’m concerned with for now.
|
|
|
Post by Mustang on Mar 17, 2023 17:44:05 GMT
The best advice I could give is to create a budget and start saving as soon as possible even if it is small amounts. It is hard to save when someone is young and just starting out but getting in the habit of saving is important. If available companies 401Ks make it easy. And be sure to invest enough to get the company's matching. That's free money.
We started out with a savings account. When we had accumulated enough we bought a $500 CD. Then a few more. Eventually we had saved the $3,500 minimum required to invest in Vanguard Wellington. If I remember correctly we sent $25 per month to Vanguard. As we made more we saved more. When the kids were born I opened a Vanguard account for their education. After 18 years of small monthly contributions they had enough to graduate debt free.
Budgeting allows someone to separate investments as to purpose. We saved to get a down payment for a house but didn't touch long term savings. That was and still is separate. My wife calls our long term investment a black hole. Money goes in but doesn't come out. It will when needed but if spending is controlled it isn't needed except for unforeseen emergencies.
If college isn't planned go into the trades. There are many paths to success. I had a friend who was an electrician and overall handy man. He bought his first house at 17. He continue to buy rental property. Almost all needed to be refurbished. He worked a full time job and refurbished them at night. I don't think he will ever retire but he now owns 22 rental properties. One of my kid's friend started out in plumbing. He then started his own company, opened a couple of branches, sold the business and retired at 40.
College isn't necessary but a solid work ethic is. After I retired from the Air Force I often worked two jobs. This allowed me to put 25% of my pay in my 401K. After the kids moved out my wife did the same thing.
A budget helps someone focus on spending. Spending less than earned is necessary. When I was teaching AFROTC I counseled a cadet. His parents only lived a couple of blocks from the university but he was borrowing the max on student loans to live alone and have the "college experience." He was a sophomore. I helped him create an estimated budget that he would have after graduation if he continued borrowing the max. He was surprised at how large a portion payments on loans would be on his income. It left far less than he expected to live on. The next semester he moved back in with his parents.
There is an old saying, "If you find yourself in a hole the first thing you have to do is stop digging."
Only after a habit of budgeting and saving is developed can a discussion of what investments to chose begin. Otherwise, there will always be a deep hole to get out of.
|
|