We are living in 21-century but most of the old money laws still apply. So, what “old” laws I would like to tell to my kids or relatives who are soon turning 18? What are the money problems or challenges of today’s youth?
Here is a list of things which come to my mind. Let’s say, I would be today a very rich man if someone had told these things to me 25 years ago.
Many of today’s millennial’s don’t have any common understanding of money. It is frustrating that they don’t teach any personal finance skills in school and it’s even more frustrating if the youngster does not get this very important education from home.
They have never make any budget what comes to money. They just spend without knowing do they have money to buy stuff or not. This will lead to problems mainly because the interest rates in credit card loans are beneficial for lender not for you!
No goals or destination
It is common that they spend every penny they have. They don’t have any investment plans or goals. For example, they will have 50k$ in stocks when they turn 40 or they 50% left of mortgage.
They think time is on their side and they can start saving a little bit later. Unfortunately, it is another way round due to compounding. Start saving today and invest this money, by doing this you will have much more in the future.
Lack of Knowledge
They will invest into very risky businesses and lose their money. It is true that risk and profit goes hand in hand. So, please remember the diversification. It’s your free lunch.
So, let’s take care of our youngsters. Please try to teach them the money management ABC’s. I know, it will be hard and painful, but hopefully they will thank us later. 🙂