Today I called back a younger guy whom I have discipled in the past at a church I used to attend in Texas.  He asked, “Randy, what do you think about mutual funds?”  And that started off a long 109 minutes of conversation about finances.  A really, really good conversation that was full of his questions and my past mistakes.  You see I wanted to warn a younger person about the mistakes I’d made and give him the chance to be well grounded from the get-go.  The few things I want to communicate about include debt, investing with interest, and planning for the future.

Debt

I warned the young man about the dangers of debt and how debt steels your money from you in the future even if the present you gets something with instant gratification.  I also warned him that a good emergency fund could help reduce the chances of you needing to be in debt due to an emergency.  Debt being what it is he got the idea to ask me if he were to get married should they try to live on one income and save the other.  I told him that’s exactly the idea!  Save up money for the future needs you’ll have as well as the opportunities that you will to invest.

Investing with Interesting

We spent some time with him asking me about various investing opportunities and what the long term gain would be.  We started with the lower investment returns such as 5% so that he could see that even a lower return can build up over time.  Then we moved onto evaluating what higher interest rates would bring.  He was excited to think that even if he didn’t have huge amounts of money to put into things in the near term that long term his wealth could grow.

Planning for the Future

I suggested that he figure out what future goals he have and save up for a good house down payment, save up cash to buy (used) cars ahead of time.  By looking at the future and planning for it this young man can be way ahead of most of the people his age no matter their income.  He’ll be prepared.  Retirement won’t be a mystery, it’ll be a plan.  All of the elements that distract the indebted individual will just not be part of his life.
What would you warn younger people?

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This entry was posted on Sunday, September 16th, 2007 at 7:23 pm and is filed under Debt, Foundations, Retirement, Savings Opportunities, Tips'n'Tricks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. No tag for this post.