The Life-Changing Money Decision I Made During High School
For me, it was a no-brainer. What will it be for you?
The lack of financial education these days makes me want to yak.
If I wasn’t such a weirdo, I’m not sure I ever would’ve stumbled upon the wonderful world of money.
They certainly didn’t show it to me in school.
Oh, wait!
They did…
Never take financial advice from your high school
I’m afraid it’s bound to fail you.
All they ever said to me was “pay attention.”
I’m glad I didn’t.
Had I done so, the only thing I’d be ‘paying’ would be money — to someone else — because I didn’t know how to manage my own.
By all means, if you want to learn what NASDAQ stands for, keep your eyes on the whiteboard.
If you want to learn the real way to accumulate wealth, keep your eyes on the screen.
The financial advice you SHOULD take from your high school
You’ll get a kick out of this one. Allow me to preface:
The course name said it all. Somehow, I was still dumb enough to take it.
Common Sense Finance, Room 305… 10:00–11:20
It taught riveting concepts:
- Invest your money
- Budget wisely
- How to get a credit card (this one kills me)
- Spend less than you earn
Duh!
I guess it was common sense, I don’t know what I expected.
Oh, how could I forget? We also tracked a random stock of our choosing for the entire three-month duration.
I understand that finance is foreign to most high school goers, but c’mon. Spend less than you earn? Obviously!
What’s the point of the class if it’s already common sense?
With that said, here’s the advice you should take from your high school:
— Become a self-directed investor —
No, they most likely won’t tell you that.
To figure this out in real time, you’ll have to be smart enough to read between the lines. I have full faith in you.
Self-directed investing might sound like a lot of work. It happens to be stupidly simple. Otherwise, I never would’ve figured it out.
The life-changing money decision I made during high school
As I struggled to learn what I longed for in the classroom, I was forced to find it somewhere else. I turned to books and never looked back.
The first one I read was called “The Simple Path to Wealth” by J.L. Collins.
This single piece of literature inspired me to focus on my finances. A few weeks later, I made the decision.
I opened a Roth IRA.
For those of you who do not know, a Roth IRA is an individual retirement account with the benefit of being funded with post-tax money.
This means you deposit money that has already been taxed. Because of this, Uncle Sam will cut you a break when it becomes time to access your hard-earned cash at the age of 59 1/2 or later.
Since the benefits are so great, the maximum yearly deposit is currently $6,000.
Guess what I did. I maxed that baby out like there was no tomorrow (ironic considering I was saving for many, many more tomorrow’s).
This proved to be my first step on the stairway to financial enlightenment.
I automated the account so it worked on autopilot while I could go out and earn more money.
The main goal is to wait for compound interest to do its thing. In my opinion, the easiest way to understand it is the rolling snowball analogy.
As time goes by, the ball — whether it be snow or money — gradually becomes bigger. Eventually, additions are no longer necessary. This can provide a life-changing opportunity.
What I would do differently
Years have now passed and I have acquired more wisdom. There is a lot to learn about money and sometimes that realization can cost you.
There are a few things I’d do differently but I regret nothing. If I didn’t learn then, I’m sure the future price I would pay is way higher (just like my stocks)!
If I had to do it again I wouldn’t go all in so fast. I was so consumed by the fact that I had to max out the account every year that it left me scrimping and saving anything else I had.
My cherished hobby back in the day was running to my computer and punching in the search bar:
Compound interest calculator
My favorite one was called moneychimp. Compound interest was the best thing for me since sliced bread and I was obsessed.
Go play around with one of those calculators and I’m sure it will hook you too.
I would spend all day plugging in all my stats to see when I’d have my million. It was fun. Maybe a tad bit greedy.
Don’t get me wrong, I’m sure I will thank myself later.
Takeaway
Pay attention in school, but keep an open mind.
I chose to take everything with a grain of salt and it’s paying off.
Financial education is extremely important and it can affect multiple facets of our lives.
Planning for the future is vital. Unfortunately, the greatest opportunity comes at a time when all we want to do is mess around and have fun. At the end of the day, time is our greatest asset.
If schools taught any ounce of legitimate financial education, I would want it to be that.
Time is our greatest asset.
Financial planning can be so simple. You don’t need to give all of your hard-earned dough to someone else to manage it for you.
That’s what that teacher’s pet everyone can remember is doing right now.
And nobody likes a teacher’s pet.
Now go out there and get self-directed! You’ll thank me later…
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