How I Became Interested in Investing
A lot of friends and colleagues, and a few younger relatives, know that I have had an interest in saving and investing for many years.
My maternal grandfather lectured me on the topic many a time, and piqued my interest by investing a few thousand bucks into a mutual fund on my behalf when I was twenty-three years old in 1994 as I started my first "real job."
I followed that fund, the Twentieth Century Giftrust, a subsidiary of American Century funds, for quite a few years before cashing it out and commencing my own decades of investing.
The fund was a total dog, and lost money despite years of the stock market rising while I was waiting for it to mature. I sent a nasty letter to the company due to the fund always lagging its benchmarks year after year, and told them never to solicit me again. I could not cash the fund out until I reached the age of 34, when I did it and used the funds to invest in Vanguard funds including my favorites, the Wellington Fund and Primecap funds.
A few years later, I began investing with T. Rowe Price, where I have my Roth IRA, one of my son's 529 accounts, a portion of my Rollover IRA from a previous employer (paid back late last year) and a taxable account that I recently took twenty grand out of and reinvested it into a Pay Upon Death account.
Because I talk about it and never preach to anybody about it, just telling them what I have invested in, a number of people have either sought out my advice or at least listened to me while I provided unsolicited advice.
Three Millennials
I now work with three Millennials, all three hired around the same time about three years ago. I will not name names, but I like and get along with one of the three. The other two, well...
One is a guy with a personality similar to a cardboard box. He is a nice enough guy, but when forced to communicate face to face, he struggles mightily. He has a computer-oriented position and I think that he will fare well so long as he deals with computers instead of people. As a guy who has had jobs dealing with people all day, every day for over twenty-five years, there are many times that I deeply envy those who do not have to deal with people.
The Millennial woman should get paid by the word. For the typical seven hours that I am in the office on a typical day, I can hear her voice for at least four of those hours. Laughing loudly about half the time. Despite being unmarried and in her thirties, she expounds on all topics as if she knows all there is to know about just about everything and does not abide by a song that we sang as very young grade school children at my elementary school:
She, too, is pretty nice and not difficult to get along with when communicating with her one-on-one.
However, I think that if we both worked there together until I pull the IMRF plug in December 2025, we still would not be friends. I certainly would not mind hearing her voice a little less, or at least not so loud.
Some may find this offensive, but she is quite overweight, obese if you will, and never passes up a treat or two when someone brings them in. Couple that with her loud, constant talking, and I do not foresee a husband in her future. If this offends you, feel free to find a more touchy-feely blog, perhaps something about meditation.
The third Millennial who I work with is the only one of the three who never went to college, and he is the one that I get along with best, by a lot. Like me, he is always looking for ways to make an extra buck or at least thinking and talking about it. He has an e-Bay store and has also recently launched his own Amazon-affiliated store.
He popped into my office a while ago and asked if I ever listen to Dave Ramsey on the radio. I admitted to him that I haven't, but that one of my few friends suggested that I do so about a year ago.
My wife and I have one couple that we get together with every few months, and the husband is a financial adviser with a major company. We talk finance exclusively while our wives chat about other things, and he often marvels at my depth of knowledge on the topic.
When I tell him that I regret not having become a financial adviser, like him, he encourages me to get into the field. I remind him that I have a quarter of a century worth of years contributing to a defined-benefit pension system that requires at least thirty years of service to qualify for a decent monthly payment, and he agrees it best that I continue sticking it out as long as possible. As a certified financial planner, I take that advice.
He mentioned listening to Dave Ramsey on the radio about a year ago. I said that I would listen, but have not yet. I did just subscribe to his electronic newsletter, so perhaps I will share some wisdom from Mr. Ramsey in the future.
I looked at his site including a list of podcasts and, honestly, it is the same canned advice that I have read a hundred or more times. Perhaps a thousand times.
I could probably summarize the entire field of financial advising as follows: (1) invest regularly and automatically so you do not miss the money; (2) assume less risk the older that you get; (3) invest in index funds; (4) spend less than you make; (5) stocks always outperform bonds in the long run; and (6) give something back.
There are more financial truisms than those, but those six come to mind right away when I think of the many financial-themes books, articles and blog posts that I have read in the past several years, going back to the first book that my grandfather gave me by his financial guru, Jack Bogle.
What My Millennial Friend Said
My much younger colleague, who is currently thirty-one years old, confided in me that he has carried a $10,000 credit card debt for years, and that he has not been able to chip away at it.
He told me that he had a few late and missed payments in years past, and that the interest rate is just over twenty percent, resulting in about $200 per month in interest costs.
He further told me that when I told him to "pay himself first" after he started at our place of business a few years ago, he began automatically sending $600 per month to an index fund. Although we do not talk a real lot, I was surprised at the amount and he had never told me that before.
Again, I am not a finance professional, but I have read about it and studied it enough to know that, while it is great that he invests $600 per month automatically, that it is counter-productive if he still has $10K in debt and just pays the $200 in interest every month.
I told him that $600 per month is an impressive amount for him to invest. I will not breach his confidence by naming him or his job title, but he makes in the low $50's and does not hold a professional title, as I do. $600 per month or $7,200 per year is a good amount of money for a guy who makes just over $50K to invest, in my book.
By the same token, when he told me that he has owed around ten grand on his credit card for the past three to four years, just making minimum payments, I told him that was bad. Very bad.
Here is what I advised.
I told him that it would be tough, but that he should set a date in mind to have the credit card debt paid off. Since we were talking in late March, I told him that there were nine more months to go this year, and obviously another twelve scheduled for 2019, giving him twenty-one more months until January of 2020.
I realized as I was telling him this, that paying off ten thousand in debt in nineteen months for a guy making fifty grand is no small feat. After paying taxes and insurance out of his paychecks, ten thousand would be between a fifth and a sixth of his take-home pay during that time span.
However, he owns a house and even rents out one of the rooms to a tenant, so he is already ahead of many of his Millennial peers on the real estate front. He is not married and does not have any children so, unlike myself, he does not have thousands to pay every month in support of others.
I am quick with math, and urged him to send five hundred per month to his credit card for the next twenty months, with some fudge factor in there. Maybe four hundred some months, maybe a thousand if he can a few times. I know that, with the interest included, that five hundred per month would not totally pay off the debt, but it would sure come close if he did not spend any more on credit.
Here's the crummy part: I told him that he should pare down his $600 automatic investing every month, but to resume that or even increase it after paying off the credit card debt.
He said and did what I would have in the same situation had my wise grandfather or uncle told me the same thing when I was his age. He cringed a bit, scratched his head, nodded while I was saying it and muttered "I know" and "you're right" several times.
My phone rang right at that juncture, and I had to excuse myself for a business call.
Later in the Day
After I had moved on to other things, including worrying about my own budget issues for the month, my friendly Millennial colleague popped into my office again near the end of the day.
He told me that he had thought about what I had said, considered it good advice, and was going to cut his automatic investment in half to $300 per month and send the "extra" $300 to his credit card in the hopes of paying it off by 2020, as I had suggested.
It made me extremely happy, even though it does not affect me directly. But my quick thinking and extensive reading on investing, saving and debt may have helped a younger colleague who actually took what I told him to heart.
I told him that I had listened to a little bit of a Dave Ramsey podcast after he suggested it, but it was not anything that I had not heard many times before, and I was cut off in the middle of it with another business-related call.
There you have it. It is not the first time that I have dispensed financial advice, but it was certainly the first time that someone took it so seriously and decided to heed my advice so quickly.
It was also the first time that I gave a Millennial money advice. I hope that it pays off for him.
A lot of friends and colleagues, and a few younger relatives, know that I have had an interest in saving and investing for many years.
My maternal grandfather lectured me on the topic many a time, and piqued my interest by investing a few thousand bucks into a mutual fund on my behalf when I was twenty-three years old in 1994 as I started my first "real job."
I followed that fund, the Twentieth Century Giftrust, a subsidiary of American Century funds, for quite a few years before cashing it out and commencing my own decades of investing.
The fund was a total dog, and lost money despite years of the stock market rising while I was waiting for it to mature. I sent a nasty letter to the company due to the fund always lagging its benchmarks year after year, and told them never to solicit me again. I could not cash the fund out until I reached the age of 34, when I did it and used the funds to invest in Vanguard funds including my favorites, the Wellington Fund and Primecap funds.
A few years later, I began investing with T. Rowe Price, where I have my Roth IRA, one of my son's 529 accounts, a portion of my Rollover IRA from a previous employer (paid back late last year) and a taxable account that I recently took twenty grand out of and reinvested it into a Pay Upon Death account.
Because I talk about it and never preach to anybody about it, just telling them what I have invested in, a number of people have either sought out my advice or at least listened to me while I provided unsolicited advice.
Three Millennials
 |
| Three cool-looking Millennials. Source: Wall Street Journal |
One is a guy with a personality similar to a cardboard box. He is a nice enough guy, but when forced to communicate face to face, he struggles mightily. He has a computer-oriented position and I think that he will fare well so long as he deals with computers instead of people. As a guy who has had jobs dealing with people all day, every day for over twenty-five years, there are many times that I deeply envy those who do not have to deal with people.
The Millennial woman should get paid by the word. For the typical seven hours that I am in the office on a typical day, I can hear her voice for at least four of those hours. Laughing loudly about half the time. Despite being unmarried and in her thirties, she expounds on all topics as if she knows all there is to know about just about everything and does not abide by a song that we sang as very young grade school children at my elementary school:
 |
| Source: www.rhymesonline.com |
However, I think that if we both worked there together until I pull the IMRF plug in December 2025, we still would not be friends. I certainly would not mind hearing her voice a little less, or at least not so loud.
Some may find this offensive, but she is quite overweight, obese if you will, and never passes up a treat or two when someone brings them in. Couple that with her loud, constant talking, and I do not foresee a husband in her future. If this offends you, feel free to find a more touchy-feely blog, perhaps something about meditation.
The third Millennial who I work with is the only one of the three who never went to college, and he is the one that I get along with best, by a lot. Like me, he is always looking for ways to make an extra buck or at least thinking and talking about it. He has an e-Bay store and has also recently launched his own Amazon-affiliated store.
He popped into my office a while ago and asked if I ever listen to Dave Ramsey on the radio. I admitted to him that I haven't, but that one of my few friends suggested that I do so about a year ago.
My wife and I have one couple that we get together with every few months, and the husband is a financial adviser with a major company. We talk finance exclusively while our wives chat about other things, and he often marvels at my depth of knowledge on the topic.
When I tell him that I regret not having become a financial adviser, like him, he encourages me to get into the field. I remind him that I have a quarter of a century worth of years contributing to a defined-benefit pension system that requires at least thirty years of service to qualify for a decent monthly payment, and he agrees it best that I continue sticking it out as long as possible. As a certified financial planner, I take that advice.
He mentioned listening to Dave Ramsey on the radio about a year ago. I said that I would listen, but have not yet. I did just subscribe to his electronic newsletter, so perhaps I will share some wisdom from Mr. Ramsey in the future.
|
|
I looked at his site including a list of podcasts and, honestly, it is the same canned advice that I have read a hundred or more times. Perhaps a thousand times.
I could probably summarize the entire field of financial advising as follows: (1) invest regularly and automatically so you do not miss the money; (2) assume less risk the older that you get; (3) invest in index funds; (4) spend less than you make; (5) stocks always outperform bonds in the long run; and (6) give something back.
There are more financial truisms than those, but those six come to mind right away when I think of the many financial-themes books, articles and blog posts that I have read in the past several years, going back to the first book that my grandfather gave me by his financial guru, Jack Bogle.
What My Millennial Friend Said
My much younger colleague, who is currently thirty-one years old, confided in me that he has carried a $10,000 credit card debt for years, and that he has not been able to chip away at it.
He told me that he had a few late and missed payments in years past, and that the interest rate is just over twenty percent, resulting in about $200 per month in interest costs.
He further told me that when I told him to "pay himself first" after he started at our place of business a few years ago, he began automatically sending $600 per month to an index fund. Although we do not talk a real lot, I was surprised at the amount and he had never told me that before.
Again, I am not a finance professional, but I have read about it and studied it enough to know that, while it is great that he invests $600 per month automatically, that it is counter-productive if he still has $10K in debt and just pays the $200 in interest every month.
I told him that $600 per month is an impressive amount for him to invest. I will not breach his confidence by naming him or his job title, but he makes in the low $50's and does not hold a professional title, as I do. $600 per month or $7,200 per year is a good amount of money for a guy who makes just over $50K to invest, in my book.
By the same token, when he told me that he has owed around ten grand on his credit card for the past three to four years, just making minimum payments, I told him that was bad. Very bad.
Here is what I advised.
I told him that it would be tough, but that he should set a date in mind to have the credit card debt paid off. Since we were talking in late March, I told him that there were nine more months to go this year, and obviously another twelve scheduled for 2019, giving him twenty-one more months until January of 2020.
I realized as I was telling him this, that paying off ten thousand in debt in nineteen months for a guy making fifty grand is no small feat. After paying taxes and insurance out of his paychecks, ten thousand would be between a fifth and a sixth of his take-home pay during that time span.
However, he owns a house and even rents out one of the rooms to a tenant, so he is already ahead of many of his Millennial peers on the real estate front. He is not married and does not have any children so, unlike myself, he does not have thousands to pay every month in support of others.
I am quick with math, and urged him to send five hundred per month to his credit card for the next twenty months, with some fudge factor in there. Maybe four hundred some months, maybe a thousand if he can a few times. I know that, with the interest included, that five hundred per month would not totally pay off the debt, but it would sure come close if he did not spend any more on credit.
Here's the crummy part: I told him that he should pare down his $600 automatic investing every month, but to resume that or even increase it after paying off the credit card debt.
He said and did what I would have in the same situation had my wise grandfather or uncle told me the same thing when I was his age. He cringed a bit, scratched his head, nodded while I was saying it and muttered "I know" and "you're right" several times.
My phone rang right at that juncture, and I had to excuse myself for a business call.
Later in the Day
After I had moved on to other things, including worrying about my own budget issues for the month, my friendly Millennial colleague popped into my office again near the end of the day.
He told me that he had thought about what I had said, considered it good advice, and was going to cut his automatic investment in half to $300 per month and send the "extra" $300 to his credit card in the hopes of paying it off by 2020, as I had suggested.
It made me extremely happy, even though it does not affect me directly. But my quick thinking and extensive reading on investing, saving and debt may have helped a younger colleague who actually took what I told him to heart.
I told him that I had listened to a little bit of a Dave Ramsey podcast after he suggested it, but it was not anything that I had not heard many times before, and I was cut off in the middle of it with another business-related call.
There you have it. It is not the first time that I have dispensed financial advice, but it was certainly the first time that someone took it so seriously and decided to heed my advice so quickly.
It was also the first time that I gave a Millennial money advice. I hope that it pays off for him.
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