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Picking stocks is a horrible idea for most people, myself included. Most people will never, ever, be good at it.
Indeed this is true. What if you "picked" Bitcoin? What if you "picked" a great house in Seattle a few years ago? What if you "picked" an antique motorcycle that ended up being worth 100K?
Advice to my younger self: forget the bank savings accounts, cd's, bonds, etc. Put all your savings in stock market index funds and leave it there for thirty years.
If you could roll back the clock and start the personal finance part of your lives over again, what would you do differently?
I'd have gotten a van/rv, then sent 25% of my paychecks to a bank I couldn't access unless I drove 100 miles to it. Live out of the van till I married. Bought a house and increased it as kids came and sold it when they moved out...
I'd have gotten a job in the trades....Maybe electrician...Machinist...
For someone young just starting out, this is the best advice I have:
1) if married, buy a house. If single, rent until married to avoid owning 2 houses, having to sell or move right after buying. A good portion of my net worth has been due to house appreciation (and it serving as an automated savings vehicle)
2) automate as much savings as possible - a)401K up to employer match b) monthly contribution to Roth IRA up to yearly max 3) HSA
Note that a Roth IRA can double as an emergency fund, with the benefit of growing over time. I didn't realize this until later in life. So if you are building an emergency, anything above and beyond the first few thousand bucks should go towards the Roth IRA. You can pull the principal from it without penalty if need be.
If you automate the above savings before you solidify your lifestyle, you really can't go wrong.
I'd have saved up extra money rather than blowing it on dinners out, movies, etc. When my husband and I first got married, we had a budget... and we had $900 per month earmarked for "entertainment." If we had saved that, we'd have been soooo much better off when the time came to purchase our first home! But nope. We saw every movie as it came out, went away overnight all once per month, ate out constantly. So stupid.
Would not have gotten caught up with credit card debt. Also would not have gotten caught up in car payments. If we were budgeting responsibly, we could have purchased older used cars for cash (we did a couple of times, but more often, we had car payments). I'd have operated on a cash-only system.
Our first home was a great buy; we made about $80K on it, which was great. Our second home, however, was not so great. It was in a bad neighborhood, but we were so eager to buy that we didn't properly think it through. This was close to the peak of the housing bubble, so we paid a lot for a small house in a run-down neighborhood in 2005 and then ended up losing it in a short sale in 2009.
I guess we pulled ourselves together pretty well after that, but we still aren't investing the way we should be in our early 40s.
The used car market does fluctuate. Ie: it's at a high right now. Reliable & in-demand cars hold a lot of value. I found that out when I wanted to buy a Tacoma... basically pay $28k for a 5-year used one with 50-70k miles, or $34k for a new one with 0 miles. Even relatively crappy used cars with close to 100k miles are going for 20k if they are in-demand models like Subaru or an F150.
Under 10k gets you a 12-15 year old car at this point... nothing past 2008 or so for under $7500.
This will get worse because car prices will go up thanks to tariffs.
Five years ago this wasn't the case... used cars were quite cheap because no one could qualify for loans.
Ah yes, the notion of “what I’d do differently, if I had today’s wisdom, taken via time-machine back to advise my teenage/young-adult self”. It’s thrilling to speculate, because it’s convenient venue for summarizing what we’ve been observing for decades, and thus, hindsight.
But… just as it’s never entirely too late to make amends for past mistakes, neither is it at all guaranteed, that making clever and prescient decisions early in life, ensures good success thereafter. We’re too wont to believe, that steadfastly following some process or recipe, almost guarantees a reward… while being stupid and thoughtless, almost guarantees failure. Neither is entirely true.
One could strategically buy a house in a gentrifying neighborhood, having done the research, at an opportune time in the market-cycle… only to learn a decade later, that the foundation is unsound, and the house would need expert professional intervention, at a price that’s comparable to the market-price of the house! This erstwhile brilliant investment, suddenly fell to a value of essentially zero – despite nothing going awry with the mortgage, with the neighborhood or the market.
Or, one might do everything right in terms of education and career-progression, rising by middle-age to the corporate executive ranks. Then, one grows cynical, sloppy, disaffected… starts cutting corners, ignoring rules, getting seduced by shady propositions… and at age 60, goes down for multiple felonies (fraud, conspiracy, lying to federal officials, etc.).
One 18-year-old might make awfully stupid decisions, leading to broken health, penury, stunted career-prospects… then reforms himself at 35 or 40 or 45, going on to enviable success by 60. Another 18-year-old studies hard, gets scholarships, does the Harvard-Stanford thing, graduates without debt into a fast-track career, accumulates 7 or even 8 figures, and then goes the way of the above paragraph.
The upshot is this advice: be wary of set formulas, rubrics, rules. Be mentally elastic. Yes, by all means save money, and by all means avoid profligacy… but don’t rely on sober and sturdy decisions in one’s youth, to serve one reliably thenceforth.
Or, as a wise man once pronounced: “The race is not to the swift, nor the battle to the warriors, but time and chance overtake them all”.
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