T Nation

Financial Planning for the Youngins


I have been on these forums for a couple years but, just created a profile and I have noticed that there are a lot of knowledgeable people when it comes to finance. My family though good with budgeting money and staying debt free have never really been savvy when it comes to investing and retirement planning. I was hoping to get some advice for myself that others might find helpful as well.

I am 20 yrs old and finishing up a CTI-Program to become an Air Traffic Controller. At the moment I do not have a job but, have a small business where I can make 150-200 dollars a week. What would be some suggestions in regard to investing/saving for the future both short term and retirement wise for someone in my position?? Or at this point is it to little for anything?


Go the Personal Trainer route.

Good Money..great job, relatively easy to get credentials.


Put at least 10% of your income in a savings account that earns a reasonable rate.

Once you have decent egg, put that in a couple CD's, stagger maturity dates.

Once you have a 'real' job, tell them to put 10% of your weekly pay in your 401k, if or what they match is irrelevant. Put at least 10% of your fucking money in your 401k, and suck it up.


How do you stagger your maturity rates?


I'd say be a poker and black jack dealer.



So you get One 3 month, one 6 month, one 1 year, and one 5 year CD, etc...

That way you are always going to have some money coming available short term, and you're not locked into shitty long term rates, if the fed starts fucking with the rates.


Thanks, At this point my parents are still paying for everything even school. So at $800 maybe less, I really have no expenses would putting more than 10% in savings be better. What would you consider a good "egg" to start the investing?


Shit, right now rates suck balls. And I would stay out of the market (Unless you are already in) until next May or so.

So, you might be able to earn comparable rates in a Money Market Account than you would in teh CD. Most CD's have a minimum. Like $1,000 or 2,500, etc.


I'm always mystified why they don't teach anything about personal finance in HS. At least in my area, there wasn't a single course taught about the subject, expect for basic acct BS. Kudos to the OP for thinking about this kind of stuff at 20. All the titty bars back then somehow didn't put me on the green line Fidelity gives you.



How would you advise someone manage their money in ways that don't involve interest? Culturally, I can't deal in interest (or any "guaranteed" type thing, stocks are great but CDs aren't, naw mean?)

Any preferences in investments on that route?


I would add to bean's advice and say once the savings adds up to 4 to 6 months worth of expenses/emergency fund, then keep saving but target it for upcoming stuff like saving for a car and whatever you are anticipating will be needed, and then the next chunk gets saved and earmarked for something else until you have enough you can invest - once you amass $1,000-$5,000 - you can start putting away and won't need for at least 5 +years.

(There was probably a really short way to say that, right?)

Capn, I don't have the time, desire or knowledge to manage individual stocks. I own a few blue chips, but I invest mainly in index funds/mutual funds and let someone else manage it and I check in quarterly. Step one was pick a fund family I trust, select a balanced mix of asset classes. I know my risk tolerance, invest regularly (real old school, but future returns will be nothing like previous years I'm afraid) and years go by and slowly the nest egg just builds.

Do yourself a favor and spend at least as much time reading about finance investing as you do about training and you will become well-informed. Kiplinger's, Morningstar, Vanguard all have good basic investing articles online for free.


Can you buy insurance?


Technically, one shouldn't but in the current way the world is setup obviously certain insurances are necessary life insurance.





Mutual Funds? Private Companies

I don't know really. I would stay out of the market for awhile right now. The risk is really high.


There are Muslim investments that follow no interest principles. Instead of interest they buy the property outright and then sign "long term lease" with ownership for teh leasee at the end. You'll have to do some digging but you can do it.

You could also just invest in muttual funds that hold no notes of any kind but that only hold stocks etc.


Aye, works the same for mortgages (similarly, at least)

Thank you guys for the tips, I've got a couple years before investments become a priority lol, gotta start uni first.


No risk, no reward. You young pups have time on your side, so beans is right about waiting to get in. But when do you know it's time to get in? I would tend to accidentally buy high when things are looking good and sell when things looked bad and miss all those gains. So I stay in, rebalance, look for buying opportunities when things look bad but the basics are solid. Market timing is a tough prospect. I don't even try. I have a high tolerance for risk, rebalance from time to time, and read read read.

Oh, and never invest in something you don't understand!


I like training...if only because being the big black dude in the gym has all kinds of advantages.


I save my money when things are going good, and buy when things are doing horrible.