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Jonathan Clements: Three Questions That Can Change Your Finances…And Your Life
Likely for yourself, too; but over the years the biggest challenge I have found with trying to get folks to put aside monies for investing was to change their spending habits.
One change that did help a lot was the, although slow, introduction of 401k plans into company plans. This addition made saving and investing easier.
I always tried to help with the understanding of compounding of investing profits. One of the most critical parts for growing monies, eh?
There remain too many I know who would comment about once a year over the past 30 years that; "I want to get together and talk about investing." I had one such comment 3 months ago and I recall the comment from the same person, starting 25 years ago. The couple has put aside some monies with an adviser (my understanding), but they have mostly lost the value of compounding time. Instead of investing earlier in their lives, they did things and purchased "stuff" that have little value today and these items did not greatly enhance their lives.
I know you fully understand all of this. Just some personal notes.
Preachin' to the choir here We started our kids in IRAs when they were in their early teens, 2K was the max. Now at age 37 and 32 they have 160K and 130K respectively all in Roths (converted from trad IRAs). It's kinda our annual 'gift' to them. Keeps money out of Washington, too. Their spouses, however, had no such plans established for them and so, even tho they have started plans now, they probably will never fully 'catch up' due to the early compounding. They're talking 401's and 403's to supplement. My biggest concern right now is getting our two kids to participate more in the selection of funds as there will come a day when we can no longer do it. Our daughter in particular does some reading, and I gave both of them charts showing values at various percents over time (both accumulation and deposit.) To their credit they seem to understand the M* 9-box matrix (imperfect as it is), they know to look at the ER and the risk ratings, to look for stock overlap, and they like the "committee" approach employed at D&C and Primecap, for example. Hey, maybe I didn't do such a bad job Anyway, it's been a fun 20-25 years. best, hawk
Americans aren't trained to Save, they are "conditioned" to Spend....In a lotta of ways that keeps the economy going and the 1%ers really happy ....and poor/middle class working for wages, we need them working...and a few (of us) will save and not work later.....sounds good to me
Delayed gratification (or saving for the future) is a foreign concept for many people. To many it is more important to have new cars and big houses, i.e. higher debts, and yet they have little to show for in their saving/retirement accounts. Catch hits the nail on the head on the power of compounding in investing - it is a long and discipline process in order to save enough.
Comments
Likely for yourself, too; but over the years the biggest challenge I have found with trying to get folks to put aside monies for investing was to change their spending habits.
One change that did help a lot was the, although slow, introduction of 401k plans into company plans. This addition made saving and investing easier.
I always tried to help with the understanding of compounding of investing profits. One of the most critical parts for growing monies, eh?
There remain too many I know who would comment about once a year over the past 30 years that; "I want to get together and talk about investing." I had one such comment 3 months ago and I recall the comment from the same person, starting 25 years ago. The couple has put aside some monies with an adviser (my understanding), but they have mostly lost the value of compounding time. Instead of investing earlier in their lives, they did things and purchased "stuff" that have little value today and these items did not greatly enhance their lives.
I know you fully understand all of this. Just some personal notes.
Take care,
Catch
Regards,
Ted
We started our kids in IRAs when they were in their early teens, 2K was the max. Now at age 37 and 32 they have 160K and 130K respectively all in Roths (converted from trad IRAs). It's kinda our annual 'gift' to them. Keeps money out of Washington, too.
Their spouses, however, had no such plans established for them and so, even tho they have started plans now, they probably will never fully 'catch up' due to the early compounding. They're talking 401's and 403's to supplement.
My biggest concern right now is getting our two kids to participate more in the selection of funds as there will come a day when we can no longer do it. Our daughter in particular does some reading, and I gave both of them charts showing values at various percents over time (both accumulation and deposit.) To their credit they seem to understand the M* 9-box matrix (imperfect as it is), they know to look at the ER and the risk ratings, to look for stock overlap, and they like the "committee" approach employed at D&C and Primecap, for example. Hey, maybe I didn't do such a bad job
Anyway, it's been a fun 20-25 years.
best, hawk