Thread: Do Young People Care about Saving for Retirement?

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  1. #1

    Default Do Young People Care about Saving for Retirement?

    “Two of the hardest things to do are save when you’re young and spend when you’re old.”

    — “Maxims of Wall Street”

    Last week, I spoke before a group of several hundred college students at the Orlando MoneyShow. The one-day seminar was called MoneyShow University.

    The speaker before me was a bright young lady representing Fidelity Investments, the Boston-based discount brokerage firm famous for selling mutual funds. She spent an hour trying to convince the youthful audience to start saving for retirement as soon as they graduate.
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    It thought it was a Quixotic quest, and I told the students so afterwards. I asked, “By a show of hands, how many of you really care about saving for retirement? Isn’t your top priority right now to find a good-paying job?” They all nodded in agreement.

    Afterwards, I came back to Chapman University and I asked my group of students to make a list of priorities from their perspective. Here was their list:

    1. Get a good paying job, or start their own business in order to become financially independent.
    2. Get out of debt: Pay off student loans and credit cards.
    3. Get good medical insurance.
    4. Go to graduate school to get an advanced degree, or an MBA.
    5. Save for retirement by creating a regular investment program (IRA or 401k plan).
    6. Buy a home (most preferred the freedom of renting an apartment; homes are too expensive, they said).
    7. Buy life insurance.
    8. Buy long-term care insurance (assisted living).
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    As much as it would be a good idea to start saving when you are young, the fact is that most students are more focused on short-term needs, that is, getting a job and making money.

    As the old saying goes, “Two of the hardest things to do are save when you’re young and spend when you’re old.” (Found in “The Maxims of Wall Street” — see below.)

    If you want to encourage a young person to start saving, the best thing you can do is open a brokerage account for them (preferably a Roth IRA), and let them make their own investment decisions. That way, they have skin in the game, and I guarantee they will start watching the stock market every day.
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    For the rich, there’s a Lexus automobile… They may live in Newport Beach, California… Eat out at Ruth Chris’s Steakhouse… stay at a Ritz Carlton Hotel… and physically go to the Super Bowl .

    For the middle class, they may drive a Toyota… live in Santa Fe Springs, California… Eat out at Olive Garden… stay at a local Hilton hotel… and go to a sports bar to watch the Super Bowl.

    The poor? They drive a Chevy… rent an apartment or small house… Eat out at McDonald’s… stay at Motel 6… and gather a bunch of friends around the apartment or house for a beer party to watch the Super Bowl on their wide HD television.

    Who’s having more fun?
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    It was good seeing so many subscribers at the Orlando MoneyShow last week. Response to my new 5th edition of ?Maxims of Wall Street? was overwhelming at the show? We sold over 200 copies, including 50 copies that Kim Githler bought for students at the MoneyShow University. She?s a big fan, saying it?s her favorite financial book.

    After my talk, more than 50 students lined up to get a free copy of the book. I hope they read it!

    At the end of the conference, when I was checking out of the hotel, an attendee, the CEO of a large real estate investment firm in San Antonio, came up and said that he re-reads my book every three months to keep current on the markets. He handed me $20 in cash and asked me to send him the new edition. ?Does it still have the green ribbon in the book?? I said it did. ?That?s how I keep track of where I am,? the CEO told me.

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