Can anyone tell me anything and everything about smart finance and money tips for a teenager?
I'm a pretty big spender, also. I want to learn all about financing, investment, banks, and money related topics. A book title would help too.
Public Comments
- The Total Money Makeover by Dave Ramsey. This book changed my life, changed how I looked at my income and changed how I spend my money. I so wish someone told me about this process when I was a teen. Props to you for wanting to learn now.
- Do not get sucked into credit cards!! When I was old enough to get a credit card, I did, and then I had 9. I also filed bankruptcy at the ripe old age of 25 and now I cant even get a cell phone contract. If anything get one card at a like $300 limit and a possible car payment. Thats enough to build your credit on without drowning yourself. Other then that, debit card, debit card, debit card!! If you cant afford you wont buy it.
- Money tip #1 - stop being a big spender until you are earning the big bucks to pay for it. Do not carry credit card debt ever. Go to college for finance.
- If I knew as a teenager what I know now at 26, I would have a lot more money already. I have a lot more to learn, but I am obsessive about reading, studying, and learning about financial matters. I have a degree in accounting and have passed the CPA exam and I feel that this background has helped me to better understand other financial matters that I study on my own time. This is what I would personally do right now with my money if I was to turn back the clock to be a teenager. I would work 15 or 20 hours a week in the highest paying part-time job I could find, even if only $8 or $9/hour. I would not buy anything on a credit card (I did not have one anyway). I would do everything possible to avoid student loan debt for college. Get a scholarship, go to a closer school that is still reputable, or maybe get mom/dad/grandma to pay for it. Make sure you get a degree that will make you money...Those are things to be thinking about but what I would do with my money as a teenager...Buy clothes out of season and/or ONLY clothes on sale. Do not impulse spend on anything expensive, you don't need it. You can dress nice for cheap. With all the money made from the job and the frugal spending habits, I would invest in quality stock mutual funds. Mutual funds provide the benefits of 1. Diversification 2. Professional money management. The stock market goes up and down, but a diversified portfolio has historically averaged returning 10% per year. 10% per year will DOUBLE your money every seven years. When you put the math to it, it is mind boggling how much money you can make if you start early. For example, if you put $1000 in a mutual fund at age 18, at age 25 you could have $2000, at age 32 it could be $4000, at age 39 it could be $8,000 at 46 - $16,000 at 53 - $32,000 and well you get the picture. That was just a reasonable estimate of only $1,000 invested one time. Imagine the millions you could make if you kept adding to your investment every year. There are many good mutual funds. Here are three that I would invest in if I were your age. I would put 40% of my money in Dodge and Cox International Stock mutual fund, 40% of my money in Dodge and Cox Stock fund (not international), and 20% in CGM Focus mutual fund. CGM focus is a high-risk fund, but has had phenomenal returns since it's exception 10 years ago. These investments will unfortunately make your tax returns more complicated UNLESS you open a ROTH IRA. This would mean that you open the funds within a retirement account. You would not be able to touch the funds until your 60 unless you wanted to pay a penalty. But believe me if you start now you will be loaded at 60. Retirement accounts seem boring I know, but the benefit of the Roth retirement account is HUGE- You don't pay taxes on your earnings! This will make several hundred thousand dollars difference over your lifetime. But since you probably want money for shorter term as well, consider doing this: Put only half in a Roth IRA retirement account and half in a non-retirement account. 1. Go to Dodgeandcox.com, fill out forms and mail in a $1,000K check to open a Roth IRA. 2. Save up $2,500 more dollars and put in a non-retirement account mail in a check for Dodge and Cox regular stock. 3. Save up $1,000, and open a Roth IRA with CGM Focus. The above amounts are the minimum requirements to open up each type of fund. After they are all three opened, incrementally add like $100 at a time until you reach the percentages I specified earlier (40/40/20). I know I probably gave you more than you asked for, but I tried to give you very specific advice. This seems like a lot, but if you do this, 10 years down the road when you are STILL young, you will be SO glad you did. My secret is that I LIKE this stuff. Building wealth is fun to me. So when I don't purchase that big ticket item, I don't care because it is more fun for me to turn that money into more money. Good luck to ya.
