4 answers
sas
Student
Florida City, Florida
2
Questions
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What is the best way to make money, save it, spend it, and build more off it while being in school full time and under sixteen, and what careers would be best for doing so?What is the best way to make money, save it, spend it, and build more off it while being in school full time and under sixteen, and what careers would be best for doing so?
What is the best way to make money, save it, spend it, and build more off it while being in school full time and under sixteen, and what careers would be best for doing so?
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4 answers
John Matesowicz
Chef
7
Answers
Fitchburg, Massachusetts
Updated
John’s Answer
This is a great question that I'm excited to answer! The advice I'm about to share is the same that I passed down to my daughters, and that my father passed down to me. The concept is straightforward. It's not about how you make your money, but rather, what you do with it once you have it. Many people work hard to earn their money, but the smart ones make their money work for them. So, here's a simple strategy: take half of your earnings, including gifts from events like birthdays and Christmas, and put it into savings and secure long-term investments. Use the remaining half to enjoy yourself and buy things you want.
At 15, your focus shouldn't be solely on planning a lifelong career, but rather on learning how to manage your money. Starting to invest at a young age, like I did and like my daughters did, will benefit you for the rest of your life. My daughters were able to buy their first homes at the age of 23, thanks to their savings and investments which helped them afford the down payment and manageable monthly mortgage payments.
Here's a step-by-step guide:
1. Open a bank account if you don't already have one. You'll need a checking account for your spending money and a savings account for the money you plan to save and invest.
2. Don't rush to invest your money. It's more important to understand the basics of reliable investments that grow over time. My father introduced me to dividend investing, which involves owning stocks that pay dividends. These dividends can be reinvested to buy more shares, a process known as a Dividend Reinvestment Program or DRIP fund.
3. Start by investing in companies you're familiar with. For example, McDonald's, Walmart, and Home Depot are all solid long-term investments.
4. When I was your age, I invested half of my savings into CMP stock, Central Maine Power. This investment grew over time and helped me buy my dream car, a 1967 Ford Mustang.
5. Remember to allocate your money wisely. Put 50% into savings, and invest 50% of that (25% of your total income).
6. Keep future expenses in mind. If you're planning on getting a car, for example, you'll need to budget for insurance, gas, and maintenance.
7. Try not to dip into your savings or investments unless absolutely necessary.
8. Learn about compounding interest rates and debt. These are crucial concepts to understand before you start dealing with loans and credit.
9. Don't chase after risky investments hoping to get rich quick. Your goal at this stage should be to build a diverse portfolio.
10. Follow the 80/20 rule: 80% of your money should go into safe, low return investments, and the remaining 20% can be put into higher risk, higher reward investments.
There's a wealth of information out there for young investors like yourself. I hope this advice gives you a good starting point for managing your money and setting yourself up for future success. Best of luck to you!
At 15, your focus shouldn't be solely on planning a lifelong career, but rather on learning how to manage your money. Starting to invest at a young age, like I did and like my daughters did, will benefit you for the rest of your life. My daughters were able to buy their first homes at the age of 23, thanks to their savings and investments which helped them afford the down payment and manageable monthly mortgage payments.
Here's a step-by-step guide:
1. Open a bank account if you don't already have one. You'll need a checking account for your spending money and a savings account for the money you plan to save and invest.
2. Don't rush to invest your money. It's more important to understand the basics of reliable investments that grow over time. My father introduced me to dividend investing, which involves owning stocks that pay dividends. These dividends can be reinvested to buy more shares, a process known as a Dividend Reinvestment Program or DRIP fund.
3. Start by investing in companies you're familiar with. For example, McDonald's, Walmart, and Home Depot are all solid long-term investments.
4. When I was your age, I invested half of my savings into CMP stock, Central Maine Power. This investment grew over time and helped me buy my dream car, a 1967 Ford Mustang.
5. Remember to allocate your money wisely. Put 50% into savings, and invest 50% of that (25% of your total income).
6. Keep future expenses in mind. If you're planning on getting a car, for example, you'll need to budget for insurance, gas, and maintenance.
7. Try not to dip into your savings or investments unless absolutely necessary.
8. Learn about compounding interest rates and debt. These are crucial concepts to understand before you start dealing with loans and credit.
9. Don't chase after risky investments hoping to get rich quick. Your goal at this stage should be to build a diverse portfolio.
10. Follow the 80/20 rule: 80% of your money should go into safe, low return investments, and the remaining 20% can be put into higher risk, higher reward investments.
There's a wealth of information out there for young investors like yourself. I hope this advice gives you a good starting point for managing your money and setting yourself up for future success. Best of luck to you!
Love this! I wish I would've had this advice at 16.
Nadia Minghettino
Mikel Anne Aldrich
Technical Trainer/Instructional Designer
6
Answers
Edmonds, Washington
Updated
Mikel Anne’s Answer
It's fantastic that you're considering saving money at this stage of your life. Developing such a habit early on is highly beneficial. Presently, banks are offering fairly good interest rates, which hasn't been the case for quite some time. Therefore, it's highly recommended to open at least a savings account, and possibly a checking account too. However, bear in mind that some banks may require you to reach a certain age or have a parent as a co-owner to open these accounts.
The ideal scenario would be to arrange for your paychecks to be directly deposited into these accounts. If you can also manage to automatically transfer a specific percentage or sum of money into your savings account, that's even more advantageous. It becomes slightly more challenging to spend this money when it's not readily visible in your checking account or as physical cash in your wallet.
Once you secure a job that provides a 401K plan, don't hesitate to seize this opportunity! Don't delay or assume that you're too young for it to matter. Starting your 401K as early as possible is the best course of action. This money will accumulate significantly over time!
The ideal scenario would be to arrange for your paychecks to be directly deposited into these accounts. If you can also manage to automatically transfer a specific percentage or sum of money into your savings account, that's even more advantageous. It becomes slightly more challenging to spend this money when it's not readily visible in your checking account or as physical cash in your wallet.
Once you secure a job that provides a 401K plan, don't hesitate to seize this opportunity! Don't delay or assume that you're too young for it to matter. Starting your 401K as early as possible is the best course of action. This money will accumulate significantly over time!
Prashanth Rao
Engineer
4
Answers
Bengaluru, Karnataka, India
Updated
Prashanth’s Answer
Learn how to make your money earn for you every day. This is done by investing it wisely and tracking its increase once every 2-3 weeks. Always develop habit of fiscal discipline early in life. Fiscal discipline is to save 50% of what you earn and spend only 50% of what is left. This discipline should be imbibed throughout your life irrespective of what you earn every month today or what your net worth is at the end.
Set short term and long-term terms goals when you save your money. Short term goals are what you need money for next 5 years or less (school fees, new car, vacation etc). Long term goals are what you need for 10 years and beyond (e.g. buying a new house, securing family expense, retirement savings etc)
Set a target amount that you want to achieve for every goal. Remember to add inflation to your target assuming 7% Year on Year. This means the target number that you set for your goal today should increase by 7% every year until the goal is met.
For every goal make sure you invest in safe instruments like savings, fixed funds, debt funds (60%) along with aggressive investment plans like stocks, equity, Mutual funds etc (40%). The percentage can change based on how your target goal amount is tracking in your weekly review.
Please remember, investment planning and being financially secure is a lifetime journey that should start very early in life and should continue throughout your life.
best of luck!
Set short term and long-term terms goals when you save your money. Short term goals are what you need money for next 5 years or less (school fees, new car, vacation etc). Long term goals are what you need for 10 years and beyond (e.g. buying a new house, securing family expense, retirement savings etc)
Set a target amount that you want to achieve for every goal. Remember to add inflation to your target assuming 7% Year on Year. This means the target number that you set for your goal today should increase by 7% every year until the goal is met.
For every goal make sure you invest in safe instruments like savings, fixed funds, debt funds (60%) along with aggressive investment plans like stocks, equity, Mutual funds etc (40%). The percentage can change based on how your target goal amount is tracking in your weekly review.
Please remember, investment planning and being financially secure is a lifetime journey that should start very early in life and should continue throughout your life.
best of luck!
Charly Rodriguez
DJ/producer
50
Answers
Miami, Florida
Updated
Charly’s Answer
Hi good morning! In my personal opinion the best and the right way to make money while you're in school i think is to have a job that don't remove you time for study and achieve future goals of what you want to do in your future. Sometimes we've to do what we need to do in the present in order to do what we love and want to do in the future. About saved and spend it: Set your actual priorities, invest in your future goals, but at the same time spend it in your priorities of life in your present (hold a balance) save money but don't be afraid to invest smartly in your future goal or spend it in your present priorities. Sometimes we've to sacrifice things in order to reach the goal. Make your plan and choose wisely in every aspect. Good luck!