Many people put off getting started on investing because they don’t know what they are doing. That’s really a shame because every five years you wait cuts your net worth in half when you’re approaching retirement. It also makes it less and less likely that you’ll be able to reach financial independence by the time you’re forty or even fifty. Over the last couple of decades, many people who thought they would just work longer since they hadn’t saved up enough to retire have seen themselves laid off at fifty-five and unable to find a new job. If you are financially independent, that won’t matter because you’ll have plenty of assets, generating more income than your job, so you can retire at anytime. You could also start another business, for love and not money, do charity work, or do whatever you want to do. But it all requires that you start saving and investing when you’re twenty or twenty-five. Not when you’re forty or forty-five.
Your twenties, and even your late teens, is also when you make the bad financial that make it hard to even do normal things like buy a house or start a family, let alone put money away for investing. You get huge amounts of student loans by going to a college that is way out of your budget and taking too long to go through. You buy new cars because you can “afford the payments.” You go on vacation and come home with a timeshare you’ll never have time to use and will never be able to sell. You start going out to dinner every night or doing take-out because you never learned to cook. People often say that it was because they didn’t have a good financial education or because they were somehow tricked by the mortgage agent or the timeshare rep.
Providing that financial education is exactly the reason I wrote The SmallIvy Book of Investing, Book 1: Investing to Grow Wealthy. In chapter two I provide information on all of the different types of investments that matter to a small investor, with a focus on stocks since that is where most of your money should be invested. Chapter three gives the risks of all of the different types of investments – something you should know before investing your money. It also gives details on how to manage risk to maximize your returns while protecting yourself from life-changing losses.
But the book is more than that. The rest of the book provides the money management strategy that will help get you to financial independence. These are the steps that will give you a good chance of getting to a million dollars before you’re forty, and into multi-millions by the time your seventy. It gives the cash-flow plan of the wealthy and shows you how people who become rich manage their money. Again, it is much better to start managing your money the right way when you’re 18 – before you ever take on debts or get into a lifestyle you can’t afford – than it is to try to clean things up when you’re 35 and deep in debt.
Starting later today (I’m not sure of the exact time), the electronic version of the book, which you can buy for Kindle, iphones/iPads, etc… will go on sale for half-off the normal price. It will only cost $1.99 for the next few days, and then go up to $2.99 for a few days after that before returning to its normal price of $3.99. You can also buy the paperback version for only $9.99 (normally $12.99). Take advantage of this opportunity to start your financial education so that you can have a more secure, less stressful life.
Even if you don’t buy a copy of the book, I’m glad you’re reading The Small Investor, because that is also a great way to learn to invest and handle money. (You just need to search around more and organize the information for yourself.) I often hear about how people don’t get a good financial education in school, so I’m trying to do my part to give you those skills. Having people not manage their money well goes beyond you and your own family. It means that people don’t have the money for health care (leading to the creation of expensive government programs that cost much more and deliver poorer results than could be had if people simply saved up the money themselves) and it leads to society needing to take care of millions of retirees who haven’t saved enough because they were “living for the day.” While it’s true there are some people who aren’t able to take care of themselves because of physical or mental problems, and there are others who have some great tragedy befall their family that leaves them relying on charity or government programs for their needs, most people make well more than enough during their working lifetimes to pay for their children’s college, pay for their healthcare, and pay for their food and shelter in retirement. It is just a matter of proper money management that is needed. And how much better a society would we see if people did so?
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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.