Get part time job at McDonalds while in high school.
Go full time after graduation.
Live at home if possible.
Work and save for two years.
Use savings ($40,000) to pay for trade school.
No college, no debt, no wasted four years.
You're welcome.
You know it is interesting that you raise this because you are absolutely correct.
In fact, he doesn't even NEED to do anything more than keep his job at McDonalds if he can, obtain the odd increase in wages etc.
I used to be very passionate about investing. It was my hobby and what I constantly thought about. I'd pore over companies released financials every key statement.
So, I obtained a job in financial advising. There was a young guy who entered the bank to open a bank account, he was 18 or 19. He seemed like a nice kid, we shot the breeze a bit and I decided to provide some important wisdom.
He had a job as McDonalds, seemed ashamed of it and said he had been there three years full time. He didn't finish high school, he had saved up perhaps 4 or 5k, was living at home taking care of his mom who was on disability and paid the rent.
There was a handy investment program we had and I would delve into it for my own personal interest. Anyway, it allowed one to input monthly investment, lay a percentage of return and the timeframe.
I showed him how easily he could become a millionaire well before retirement age if he just committed to a monthly investment program into a high percentage savings account. Literally zero risk since it was insured.
The guys eyes lit up. A simple $100 a month and he could have X amount of dollars at the going rate in 20 years. I gave him the 101 on higher risk/higher reward and I used the U.S Exchange Funds as the best example of that. There is more risk but he is young and he is investing on the exchange, not an individual stock.
Anyways, he agreed to $100 a month. He was probably getting 4% of something in a high interest account with his 4-5k
He comes in two months later and asks to speak to me. We sit down, he asks if he can bump it up to $500 a month. Indeed you can sir and I make the changes for him (he probably could have done it himself online but I forget).
I always wondered if he kept it up all of these years.
As an example to illustrate my point, using his scenario and only for 20 years, he would be 38 at the time of maturity, check this out.
If he had kept up the program at 4% a year, $500 a month contributed, compounded annually. This would be how much he was have by age 38:
Almost and that's just using 4% and a modest monthly amount.
As Warren Buffett said, the secret to investing is the compound. Let's say he went with a slightly higher risk at 6%. Same monthly $500, which is $6k a year invested:
$50k more at the end of 20 years, with a McDonalds job!
Now, let's say he maintained a U.S Exchange Fund, the S&P average over the last 40 years is 9.83%. Let's round it down to 9% Check this out, at only $500 a month for 20 young years:
Start young. Keep expenses low. If he can contribute more than do so. $1000, 1500 a month, whatever he can give, just live a modest lifestyle.
Oh my I inputted the information wrong, I thought it seemed very high. I altered the graphs above.
