What Ever Happened to Growing Up?

Back in the 1800’s kids grew up early – really early – because they had to.  Five and six-year olds were out, working on the farm.  They might be gathering beans or picking up sticks.  By the time they were sixteen they might very well be off starting their own farm or even starting their own family.   Jack Daniels, who started the now-famous Jack Daniel’s distillery in Lynchburg, Tennessee in the mid 1800’s, started his operations when he was about 20.  Laura Ingalls Wilder started teaching school at the age of 16.

It seems like children have always been eager to grow up and strike out on their own.  Teenagers can’t wait until the day they can drive.  Then the day they have their own place.  The day they get their first job.  Many can’t wait to get out of high school and start their real lives.  It is the parents that watch helplessly as their children grow older despite their wishes that they stay 2, or 6, or 10, or 12 a little longer.

Today I heard Avril Lavigne’s new song, Here’s to Never Growing Up, on the radio.  It got me thinking about the attitude of some people in the newest generation.  While there are many who have struck out on their own and are starting their adult lives, there are more than ever before who have taken up a lifestyle of a perpetual teenager.  They are still living at home.  Still working little or just working minimal jobs to pay for alcohol and gas money.  Perhaps the attitude has changes from wanting to grow up and “be one’s own man” to staying a child as long as possible.  Before you send in a nasty comment, ask yourself, are you still on your parents’ cell phone plan?

The trouble with not growing up is that eventually you hit a wall and wonder what happened.  You wake up at 32, still living at home, and still working lousy jobs.  You want a house of your own, but have no ability to make the payment, let alone qualify for a loan.  Some of your friends have moved up and are starting to do things like start families, but you are still in the same place, kind of like the episode of Friends where Monica discovers the guy she liked in high school was still living like he was in high school.  She had moved on in her life, but he hadn’t.

Even for those on their own, there seems to have always been this attitude of eternal youth that keeps people from saving enough for retirement.  As one 29-year old blogger wrote recently, she “did not believe in retirement.”  Believe or not, in about 35-40 years she will find that it is difficult to work anymore and want to retire.  With no planning, however, she’ll find this very difficult to do.

The thing that’s really a shame about retirement is that it is so easy to plan and save for since you have so long.  Ten to fifteen percent of your pay each year into a set of mutual funds is all that is needed.  If people would put a 10% contribution for their 401k when they were filling out their employment paperwork the first time they would be set (provided they also didn’t touch their 401k balance as it grew).  If you could invest your Social Security contributions in mutual funds, you would be taken care of as well ( if you get to 70, get nothing or next to nothing from Social Security, remember this moment and how you didn’t write to your Congressman to change things, then quit whining).  Many people put this off, however, for one reason or another.  They then try to save like crazy in their fifties and sixties when it is much more difficult.

There is no reason you need to grow up mentally.  As they say, you are only as old as you feel.  (Although your body will feel a lot more when you’re fifty than when you’re twenty.  As an older friend of mine says, growing old isn’t for the weak.)  There are reasons, however, to grow up financially as soon as you can.  Start looking for jobs you can do around the house and around the neighborhood at 12.  Maybe take a summer job when you’re 16 and start saving up for college.  Start investing as well when you’re 16 or younger, sending in money from birthday presents and odd jobs when you can.

Take a summer internship when you are in high school or in college with someone who can teach you about business, perhaps a family friend or a businessman or businesswoman in town you admire.  Instead of watching YouTube videos, seek out some financial calculators and see how much money you could have if you save and invest, or how much that dinner will cost you over 10 years on a credit card.  Sign up for a stock picking contest or just pick some stocks on your own and see how you do.

Read, read, read and give yourself the financial education that you will never get from high school or college.  Read Rich Dad, Poor Dad.  Read The Total Money Make-over.  Read A Random Walk Down Wall Street.  Read the Berkshire Hathaway annual reports.  Read The Wall Street Journal and Money Magazine.

Take responsibility for your financial future, because no one else will care as much as you do.  Avril Lavigne may sing about not growing up, but she has her royalties to fall back upon.  What do you have?

Please contact me via vtsioriginal@yahoo.com or leave a comment.

Follow me on Twitter to get news about new articles and find out what I’m investing in.  @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.


  1. There is a lot of fun to be had if you “never grow up” and a lot of the population who thinks this way has parents that enable this type of behavior. I mean, what would I rather be doing: working 14 hour days 5 days a week or living at the beach surfing and drinking every day? A lot of people I know, have parents who are wealthy enough that they can basically be beach bums for life, and when their parents/grandparents pass away they will still live off their inheritance or even live in their home at that point. Add in that many are also on government assistance as well as parental assistance and I can guarantee that many of them live far better lives than myself.

    However, while this type of life seems great and I’m sure will be a lot more stress-free than your typical workday, at the end of your life it will come down to: 1) your family’s wealth is now less because of your lifestyle. 2) your children may not have the option of the easy life you lived because you spent all your family’s money! 3) no personal retirement funds means reliance on govt assistance in retirement. The govt will always tax the crap out of you, so if you’re living off of someone else you’re only guaranteeing that you’ll never accumulate any wealth as you see it get spent and taxed away.

    The more I think about this post, the more people I think of who are 30ish with their parents paying for phone, cars, even HOUSES. I honestly cannot blame them though, if my parents had the resources and were willing to provide those things for me, I can’t say that I would not have fallen into the same trap. I’d like to think I wouldn’t, but it would be so easy to do so. You get comfortable not having to work hard but still getting everything you want.

    Another reason for this is, as you mentioned, celebrity influence. Celebrities in the USA live lives of college students except without the studying. They’re constantly partying and throwing money around like its nothing… because to them, it isn’t. However, they make a million on a single movie or a concert tour and actual college students don’t.

    SO ANYWAY, lets talk about retirement account goals. Everywhere you read, no one really gives anyone reasonable goals for retirement: they don’t list when you need to start or how much you should have by when, and sometimes you’ll see the 5-15% range of contributions thrown around. I spoke with a financial adviser recently who seemed to think everyone should max out their 401k from the beginning of employment. This is an interesting strategy, but for my personal situation it wouldn’t make sense unfortunately. There is definitely such a thing as over-contributing IF and ONLY IF you have a lot of high interest debt that you need to pay off such as student loans or credit card debt. For everyone else, its a deduction on your taxes and less chance for you to do something stupid with the money as well as a necessary boost to your retirement during the crucial initial years of contributions. But then when do you cut back? The $1M retirement gets thrown around a lot so lets look at that. Here are my cliff-note 401(k) tips.

    2) Pay off any higher interest debts (student loan, credit card) before increasing contributions
    3) Aim for $100k in the 401k at age 30*

    *If you can do this, chances are you’ll have well over $1M at 60 even if you stop all contributions. This gives you a near-term goal you can use to gauge your progress and anyone can figure out what percentage they need to contribute to reach this goal. After 30, or 40, or 50 it is MUCH as hard to save.

    • I really see paying off debt and saving for retirement as like goals. If the debt is something like credit card debt, you will never make as high a return investing as you will pay on that debt, so paying it off makes sense. Things like student loan debt and home debt are at lower rates, so perhaps a split between paying off that debt and saving for retirement makes sense. Delaying buying a home until you have paid off your student debt would also be a good idea, as would bumping up your retirement savings with your new cashflow when the debt is paid.

      On where you should be, The Millionaire Next Door offers the criteria for being a significant wealth grower (one who will become rich) as having your age times your salary divided by 10 in net worth (including home equity, retirement accounts, and everything). For example, if you are 30 and make $50,000 per year, the goal would be to have at least 30 x $50,000/10 = $150,000 in net worth. I’m not sure about this formula since it doesn’t work when you start working and haven’t had time to accumulate wealth and may be a bit low near retirement (60 x 100,000/10 only equals $600,000).

      Instead, I would target having 20 times your salary when you retire. This would allow you to withdraw 5% a year and still make enough interest and capital gains in the account to keep up with inflation.

      Thanks for the great comments!

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