There was a tread earlier about starting to invest for retirement early. Seems like even someone showed an article or graph about the difference immediate start verses waiting a few years. My daughter and son in law are wanting to figure this thing out early. He started his job about 2 months ago and she graduates in May with a bsn and plans to start the doctorate program pretty quick. I don’t want them to have to struggle when they get my age. I always knew I would be poor, teacher, and that’s fine with me. I’m just a highly educated redneck, and I’m good with the simple life. But they have bigger hopes and dreams. Any suggestions, articles or info links anyone is willing to share, I’ll pass along to them. Thanks

HH,
That's a controversial subject around here! A guy named Dave Ramsey has saving/investment/debt advice for all levels. My opinion, it is very sound advice about how to manage money. You may not agree with everything he says but his method for accumulation of wealth over the long term is indisputable. There is a lot of argument for his philosophy of individual investment choices but, overall, it's based on factual data. It's no a get-rich-quick scheme and is not for a high-risk investor. It is a strategy for using minimal debt with post- and pre-tax investing for long-term appreciation of net worth.
I can attest to the approach.

X2 on Dave Ramsey.

It’s a stupid simple approach to handling money but it works.
I drank the koolaid for a while and I’m much better off financially than if I had I not followed his plan.

This falls under general financial advise/common sense . Don't dig yourself in a hole of debt when you're young and starting out. Take care of your $ when you're young and let it take care of you when you're old.

Diversified and don’t over think it.
Stay away from single company stocks completely or if they’re going to do single company stocks, make it a small percentage.
Stay away from investment advisors, the vast majority underperform the market over the long term and take way way way too much.

Instead of buying a run of the mill first house, I would look for something that has a dedicated space for a renter.
House with walk out basement, duplex, house with guest house etc.
An extra $500-1,000 per month is a game changer.
Rinse and repeat this a few times and suddenly they could have multiple rental properties over 10yrs or so.

Start a Roth IRA with Fidelity and buy FZROX. They could put $6,500 each into their 2023 Roth IRA until 4/15/24.
For 2024 Roth IRAs that number is going up to $7,000.
Each spouse can put $7,000 to work.

For their 401K, at bare minimum capture the company match but ideally max it out, going up to $23,000 for 2024.

For their cash, hold it in Ally(well respected online bank) and capture 4.5%.

Have a modest wedding, dropping $50,000+ on an overhyped one day look at me party is foolish.
Take an amazing honeymoon with credit card points for flights/hotels.

Oh ya, unless you’re completely utterly terrible with money, you probably don’t need Dave Ramsey.
Most people are terrible with money thus he’s enjoyed tremendous success.
If you make $65,000 per year but are wanting to buy a $90,000 F350, yes you need Dave Ramsey.

If they’re above average with money/competent with math, they should be more interested in aspects of the FIRE community

This. Though I disagree with financial advisors above. I use one and yes they take their cut but I’m up pretty good for the year with mines help. I don’t do anything but let them take the money out. I work two jobs and know enough to be dangerous but not to be very good though I try to soak up any and all financial advice.

For them to start.

1)Max out Roth IRA unless they make too much and do a backdoor Roth.
2)match any and all 401ks at the least, max if able
3)get a health savings account and max that if you can
4) invest in a diversified portfolio with mutual funds/index funds

5-6) look into passive income options such as real estate/land etc when financially able to

Save more money than you spend.

Dave is good for getting out of debt, but he doesn’t do well with using good debt to make you more total wealth. Not all debt is bad.

Agree on staying away from single stocks. Those are for retirement years and only hold ones that pay dividends.

The best advice is to put money away now, don't wait. Don't try to time the market either. There are about 17 days a year the market really does something spectacular, and if you are sitting on the sidelines, you miss it.

My retirement account has done nothing under Biden, as far as grow, but it's reibested dividends and capital gains, but which bought me a lot of shares. When it does take off, as in when Trump or someone much better than Biden gets in office, then it will be up bigly.

Tell your son in law to screen shot and you post his 401K fund options.
For example; I’ve got mine set to 25% Fidelity Small Cap, 25% Fidelity Mid Cap and 50% Fidelity Large Cap.

Great advice here

Typically, buying single stocks for a portfolio takes 27-35 individual companies for a diversified US portion. To make that cost effective about $100k is a good starting point if you hire a broker. If you just cover large caps with individuals you can get by with about $50k. But, the overall portfolio needs to be diversified so that would be about 60- 70% at most in a 100% equity portfolio. And outside of the rising interest envirnonment weve been in most need at least some fixed income allocations.

That is one reason why ETFs or managed mutual funds make sense for most people. They are easy to diversify with smaller accounts. Other reasons are that your average broker/person almost always will get liwer than market returns. Individual stock portfolios make sense in non-qualified accounts much more than in qualified (tax deferred) for controlling taxes.

Unlike many I would suggest getting both term (large) and a permanent (smaller) life policies. Never know what the future brings. What people forget is that term policies are that cheap because they typically dont pay out. Plus, there are a bunch of benefits (only because of laws) that make some insurance products very benefitial to higher income earners.

IMHO the investment side is easy. Use index funds.

It's having the discipline and learning the personal finance side that is the most important.

I like to put everything in percentages.

If you are a Christian give a percentage.

Get the emergency fund in place. Put a percentage in retirement.

If you can't pay cash for the toy then don't play with it.

As your net worth grows you have two choices. Learn about personal finance or get a financial advisor (not a investment advisor).

It's lifestyle creep that gets most young people, especially after getting the first good job.

Agree with everything said here. Would second the Dave Ramsey stuff, I’d steer clear of him if i ever wanted to do very well and not just get by. I’d also encourage the book “A Simple Path to Wealth”. Also agree with staying away from financial advisors/gurus and invest only in low cost ETF’s like Fidelity or Vanguard. Max out the Roth IRA’s. Invest in real estate in some capacity. And live under your means….if you can’t do that it will never matter how much money you make. My wife and i also skipped the expensive wedding and took a badass trip to New Zealand for 2 weeks and might’ve spent $15k on the entire trip. Best wishes!

I'm 65 and have a "Wealth Management/Stock Broker" in Montgomery that handles my investments. But he was highly recommended by the Accounting Firm here in Auburn whom handles my Taxes.....and they are the LARGEST/Family Owned Accounting Firm in Lee County. For the past 8 years He has turned a solid 8% Average Return AFTER he gets his Cut. I have another Account with Charles Schwab that I manage. I use his knowledge in the stocks he buys for me.....in turn to buy with my Schwab Account. It takes a LOT for Young Folks to live comfortably these days especially with Kids. With them just starting Out: If he is mechanically inclined perform your Vehicle Services/Repairs yourself......Take care of vehicles and drive them until they are not dependable.....Go out to eat once a week and look at it as a Treat......MAX. your 401K as much as possible......Be a good/safe Driver and only pay for Liability Vehicle Insurance unless you are making Payments.

Lots of good advice already, but I’ll add something a little more hands on. Since you are a teacher, teach them about the power of compounding interest. Look up a retirement calculator, Ramsey’s website has one, and run some numbers to simulate starting earlier vs later. It will be easy for them to see the benefit of starting early, even if it’s with a modest amount. I’ve done this with my oldest son, who is 23, and it was easy for him to see why he shouldn’t wait. I wish someone had taught me that early on.

Since you didn't say what field he will be going in I would suggest that if possible he look at a state or federal job. Young people don't think about retirement but taking a state or federal job with a retirement when they could be making more in the private sector sure is more appealing the closer you get to getting your time in. My wife and I have lived this and it sure is nice getting paid to not work.

best advice. Stay married

As CD said, pull up a compound interest calculator and show what it can do over 40 years. My 17 yo daughter just got educated last week. She has her first real after school job and I helped her set up her 401k and I set up a Roth IRA through Fidelity through her work.
I’m 49 and didn’t start investing until I was 31 when I took my first job with my graduate degree. It’s easy to say, but hard to do…..live below your means and max out those 401ks.

"The Millionare Next Door" is an excellent stocking stuffer (I bought the ones I gave my children on Ebay, cheap.)