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To Be Young Again

September 01, 2022

I was a dope in my 20s. I had no plan, let alone a retirement plan. Any money I made was spent before the thought of saving it ever crossed my mind. Then one day, I bought some books on money and investing, and what began as a curiosity ultimately turned into a career that now spans decades.

I often think about what life would be like today if I could go back and do it again armed with what I know now. But just as cars and computers have grown in intricacy over the years, so has investing. Extreme monetary policy, the impending extinction of pension funds, and increasingly complex financial markets have changed the game.

That’s why the advice I offer the younger generation today isn’t necessarily what I would have told a younger version of myself so long ago. The world has changed, so here are ten things anyone starting out in life can do to increase the odds of building wealth over time:

  1. Invest in stocks: Equities have delivered an average annual return of 10% over the last several decades. This is the ideal asset class for someone with a multi-decade time horizon who stands to benefit from the effects of compounding over time.
  2. Don’t hire me: Unless you just sold an app to Google, you don’t need comprehensive financial planning. Just buy a broad index fund, add to it over time, and no matter what is happening in the stock market, don’t sell it.
  3. Stay out of the way: Active management of a stock portfolio requires skill, education, and experience. You have none of these, and if you try you will be doing nothing more than speculating. Just keep buying more of that index fund.
  4. You aren’t the CEO: If you work at a publicly traded company, think twice about buying the stock. You may think that being an employee gives you an "edge," but it doesn't and never will unless your title begins with a "C" (CEO, CFO, etc.).
  5. Never turn down free money: Imagine your boss offering you extra cash with no requirement to work any longer. Sounds pretty cool, right? Well, that’s how employer matching on 401(k) contributions works. So, max that out and enjoy the free money.
  6. Set up a Roth IRA: Taxes are only going one direction, so set up a Roth IRA before your income exceeds the legal limit for these highly advantageous retirement accounts.
  7. Download these apps: Acorns for easy saving, and Mint or PocketGuard for budgeting, and what’s offered by your credit card(s). Check your spending weekly, and if you catch yourself squirming over the total amount, take a guess what you should do.
  8. Uninstall these apps: Any app that offers access to your brokerage accounts and/or allows you to trade stocks should be removed from your phone immediately. There is no conceivable reason to have that much access to the stock market.
  9. Learn how money works: Our educational system is utterly useless when it comes to teaching how money works. Buy books, take classes, and talk to people smarter than you. It may be painful to learn now, but it’s nothing compared to doing it later on in life.
  10. Think twice about fine arts: Speaking of education, college has become a six-figure investment into your future. Think long and hard about how you plan to get a return off of it before majoring in a degree that has zero market value.

Doctors go to school for years before stepping into surgery, and lawyers clerk for judges. But you don’t need a fancy degree and years of experience to build wealth. All it takes is discipline and learning from those who know a little something about the process.

Lastly, I have lost count to the number of extremely wealthy individuals I have met who live in fear every day of losing what they worked so hard to accumulate. Disciplined investing can build a nice nest egg, but true financial freedom only comes when you accumulate money without fear of losing it.


This material has been prepared for informational purposes only and should not be construed as a solicitation to effect, or attempt to effect, either transactions in securities or the rendering of personalized investment advice. This material is not intended to provide, and should not be relied on for tax, legal, investment, accounting, or other financial advice. You should consult your own tax, legal, financial, and accounting advisors before engaging in any transaction. Asset allocation and diversification do not guarantee a profit or protect against a loss. All references to potential future developments or outcomes are strictly the views and opinions of Richard W. Paul & Associates and in no way promise, guarantee, or seek to predict with any certainty what may or may not occur in various economies and investment markets. Past performance is not necessarily indicative of future performance.