"And that’s what separates the people that DO things from the people that just dream about them. YOU GOTTA ACT.” Steve Jobs
Astonishingly, many young people lack a solid understanding of finances, a knowledge that is crucial for their future. The urgency of financial education cannot be overstated.
Financial education is one of the pillars on the road to becoming a man's man. You can't feel safe about yourself and your family if you are not providing enough and not saving enough. However, if you are not investing enough, it will surely be a problem in the long run.
Historically, the probability of making money in the U.S. stock market is 50-50 in one-day periods, 68% in one-year periods, 88% in 10-year periods, and 100% in 20-year periods. That's why it's crucial to start investing money as early as possible. The earlier you start, the more your assets will grow exponentially. By the time you approach retirement, you could have, if not seven figures, but perhaps a high 6-figure amount. Thanks to regular investing and dividend reinvestment.
There are fewer than 5% of young men who are thinking about retirement years. Don't feel like saving money every month? $20? It's better to spend it on drinks, parties, and expensive toys/games, right? I hear you.
Or spend on bread? In this case, you need one more job (part-time is OK) for passive income.
Don't even think about the next 5 years? I can tell you one thing: the most competent individuals will start saving a few dollars (or other currencies) with the intention of investing. And guess what? They will be the ones who come with a million or more near retirement. Taking personal responsibility for your investments is not just a smart move; it's a source of pride and accomplishment.
Here are the questions I am getting on social media, where I share my experience:
Why is financial education essential for the younger generations?
Millennials often feel they’ve been dealt a tough hand financially. However, understanding and applying financial education can shift this narrative. It's about taking control and making changes before it’s too late.
What is your best piece of financial advice for the millennial generation?
Everyone will start from a different level of understanding and experience, but a good place to begin is learning about the role that money plays in each of our lives. Once you understand its purpose, you can manage it effectively through a budget and then grow it through investing.
That millennials don’t have to get financially screwed! We live in a time where it’s more accessible than ever before to invest and learn about finance. That gives us a huge advantage when building wealth that previous generations didn’t have. But it’s all about realizing that and taking action. Stop browsing your phone mindlessly and better start learning how to invest money. Buy a few books, try to find a mentor, subscribe to newsletters, and ask questions. Over time, your knowledge will increase, and you will be more comfortable with an investment choice.
Open a brokerage account and begin so-called "paper trading" by buying and selling assets (stocks, mutual funds, ETFs, CEFs, MLPs, REITs, BDCs, and preferred stocks) without spending actual money. Do not rush to invest immediately. Learn more, compare the results, write notes, and develop the investing rules. You will be glad you have followed my advice.
What is the top lesson in financial education?
While saving money is essential, it's not the key to wealth. In fact, keeping too much can lead to loss due to inflation. The absolute path to wealth is through investing, where your money can grow and work for you.
What is one thing about personal finance that you wish everyone knew?
Wealth isn’t about owning fancy cars or going on lavish vacations. True wealth is about financial freedom—being able to do what we want, whenever we want. At the end of the day, the greatest asset we have is time. Financial education gives you your time back, and economic freedom allows you to spend your time as you choose.
What makes trading challenging is that being average is not good enough. You can be an average teacher, store manager, or contractor, and still make a living. In trading, however, what is average is losing. If you consistently stay average, you'll consistently go broke or get miserable results (that is what I experienced for several years until I changed my approach to investing).
In performance activities, ordinary is not good enough. The ones who make a living from their performances are extraordinary. Generating enough income from your dividends so you can quit your job and live freely as you wish, enjoy your hobby, travel the world, help in your communities, teach others, and live your life fully!
Two factors define the ordinary trader:
1) Lack of innovation - The average trader looks at the duplicate headlines, the same charts, and the same information as other traders. One vendor of trading software shared online that, when they assisted customers via their support service, they found that the vast majority of traders never adjusted the indicators from their default values. Even fewer users utilized the software's customized features.
2) Lack of distinctive effort - Only in trading, keeping a journal would be considered diligent effort. The ordinary trader is not in an active mode of processing information, and that ensures that new and deep learning will not occur. When traders examine new information and combine it in novel ways, actively investigating fresh data, they exercise their creativity and capacity for effort. Over time, deep learning enables the internalization of meaningful patterns. You may or may not employ a power measure in your trading.
The point is that creating measures that make sense to you, tracking them daily and within the day, and observing their patterns establishes a depth of learning that is impossible for someone looking at the usual charts and canned indicators. Innovative trading begins with innovation in perception and effortful information processing. All of us take trips to the gym; the question is whether those trips provide us with the workouts that make us stronger.
I hope I didn't scare you, as my goal was to encourage you. I know you can do it!
The more time you spend on learning how to manage and invest money, the more positive changes in your life you will experience. Learn how to manage risk and avoid letting someone else manage your money, as only you will make investment decisions based on your learned concepts. Someone else will always have the first goal in mind -- his wealth, not yours.
Best in investing, man!
Your Admin
This article is meant to provide information to interested parties. Since I don't know the individual investor's circumstances, goals, and/or portfolio concentration or diversification, readers are expected to conduct their own due diligence before following any investment strategies or rules mentioned or recommended.