The Workout of Investing

(Great Advice for Your Kids)

I was having a chat with one of my aunts the other week and the topic of investing came up.  We were talking about her oldest daughter graduating this May and spreading her wings into the “real” world.  She was saying how she wishes she got started earlier in the investment game, but no one ever told her about this stuff.

Now, I find this a very common conversation with almost everyone I meet.  They always wish they got a jump on things sooner than they had.  On the surface, I totally get it, and truthfully it is fairly accurate that the sooner you get started the better.  I’ve written many blogs about the difference a percent or two each year makes, and the power of time as it comes to compounding effect on your portfolio.

For today, let me talk about the muscle memory or psychological side of things.  Back to my conversation with my aunt for a minute.  What I had told her was: that look, you are in incredible shape, right?  Right!  And you work out every single day, right?  Right!   Why is that aunt?  Well, Andrew, it is a habit now and I simply make sure it is a priority each and every day.  If it is a busy day, I’ll work out before work.  If it is a light day, I’ll work out after work.  At this point I don’t even think about it, I simply just do it.

Ding, Ding, Ding!  See where I am going here, folks?  I want your kids starting out (or even younger) to make saving and investing a habit they simply do.  It is non-negotiable from jump street and what then happens is, it becomes built into their life routine.  They don’t think about it, they don’t moan about it like most of us do when going to the gym, they simply adopt it as part of their lifestyle.  Quite frankly, it ends up being a part of their overall health.  As working out every single day is a key component to one’s physical health, saving diligently from the start becomes a key component to one’s financial health.  And guess what?  Studies prove that both these things lead to a more well-balanced happier lifestyle.

The Tip – The Workout Of Investing

Now that you get the importance, what advice or tips do I have?  The best thing I can tell you, or your kids, is the same advice I gave both my younger brothers as they entered adulthood and got their first jobs.  Before you even get that first paycheck, sign up for your 401(k) and put a minimum of 10% away, if not 15%.  From there, increase every year as you make more money until you max it out (currently $19,500 if under 50).

That’s simply it.  Do that and your kids will surely thank me.  How do I know?  Besides the plethora of people I’ve seen it play out with, my own brothers now are in a substantially better position than they would be if they hadn’t taken that advice.  I can tell when a new client comes in, regardless of age, how their savings started at a young age, and to what degree.  It shows in their attitude, their knowledge, and honestly their balance sheet.

Rep 1

Now, any of you reading this not really start working out until later in life?  Possibly because you put on a few extra pounds?  Or maybe because your last doctor’s visit didn’t go so well?  If you can relate, you know how freaking hard it is to wake up each morning and drag your butt to do it.  You moan, complain, and lots of days don’t do it.

Now, look at my aunt.  Do you think she moans and complains when she goes to the gym?  Better yet what do you think upsets her more – a day she goes to the gym, or a day she actually had to miss for some reason?  Think we all know that answer, especially me as I’ve seen her rollerblading on the boardwalk more times than I can count.

Pump It Up – Continue Your Workout Of Investing

Alright, there you have it. Have your kids start right now pumping up those retirement savings and forcing them to live off the rest.  The sooner they start, the sooner they won’t give it a second thought.  Trust me, it is much harder to find expenses to cut than it is to never have those expenses in the first place.  Make sure you don’t stay complacent and pump up those savings as your income increases.

As always hope you enjoyed today’s blog and stay wealthy, healthy, and happy!