Financial Opinions and advice wanted!?

Question

Hey, I'm a 16 year old beginning investor. I have a major goal in life, which is to become a millionare in my 30's or less. Right now I have nearly 8,000 in an S&P fund for long term, $1000 in market account avg. 5% a year, and 100 with me all the time. All money I get first goes into my wallet to make sure I have money with me, the rest will go into my $1000 market account to maintain 1000, and assuming those 2 priorities are taken care of, which they usually are, I put the rest into my long term account. I get $20 alowance each week, but I really want to make more money to ensure future wealth at a semi-early age. I really don't want to get a typical job, but if anyone has any good ideas that a 16 year old can do that arent illegal, please let me know. Even if theres not all that much money, as long as I make alittle bit, its worth it.

Answer 1

First of all, congratulations!

Doing what you've done so far is fantastic!

I'll give you a couple of sources, but there's no reason you can't get to your goal by your mid 30's, especially if the goal resonates within you.

You just need to learn a few ways to invest and continue applying the discipline you've got.

I'll add more later, but for now, start by reading a few things about the market. Maybe some of Jim Cramer's stuff on Thestreet.com and getting William O'Neil's book, How to make Money in Stocks in good times and bad (avail everywhere very affordably). That'll give you a primer. Also, get Robert Kiyosaki's book, Rich Dad, Poor Dad and internalize it!

As for college, just learn what you can in college, have a great time and experience it for what it is. Remember that 65% of people who graduate college end up working in fields outside their major within five years of graduating. Also, keep in mind that most schools (high school, college, grad school, etc) do NOT teach people how to get rich investing.

Most advice you hear will often be advice that's been heard and repeated, either from parents, friends, etc. Not to diss any of them, but unless they are rich or are on their way to becoming so, they can only advise you at the level of their awareness. So just keep your eyes open and take things with a grain of salt.

Best of luck! I'll try to add more in a bit.

Oh, you might also check out secrets of the millionaire mind and their millionaire mind intensive, almost free, 3 day very intensive workshop. They'll give you some concrete principles that'll provide a framework for the goals you've stated as well.

Hope that helps!

Answer 2

Your question shows that you are off to a good start by investing your allowance.

However, without intending to be picking on you, I should give your question the honest answer you deserve. To meet your stated goal of becoming a millionaire in your 30's (or before) you need to pick an age - say 35 - and begin planning backwards to get from there to where you are now.

Now granted, you will have far more knowledge and experience at 30 than you will at 20, so you will most likely be best served by using your younger years to build the foundation of knowledge which you will draw upon as you get older.

I would suggest that you make a note to work on your spelling and grammar. Some people don't care about either, but others view both as a sign that you care about details.

I would further suggest that you begin reading about money topics in both books and magazines. Nothing too much. Start with Basic Economics by Thomas Sowell, and pretty much anything by Andrew Tobias. Also try The Little Blue Book that Beats The Market by Greenblatt.

Given your age, perhaps your best bet in the way of non-typical job prospects might be to volunteer as an intern for a company that does the kind of work you are interested in doing later. I am assuming that you eventually want to own your own business - but perhaps I am reading too much between the lines.

Hope this helps.

Answer 3

I thought most 16 yr olds wanted to be President.

Can you gain any significant satisfaction from simply working a job for money? No, it's just a stepping stone. Nor will you push yourself, challenge yourself, or learn any more about it than is required.

Go to a college counselor and ask to take the aptitude and interest tests. If they want you in their college, they will do it for free. This will give you a better idea of the fields that you will be best suited for. In doing this, you will begin to discover yourself.

All of a sudden, your goals will become achievable. When you enjoy what you do, it is not "work" or just "a job." You will study harder than most, because you want to know everything you can about this interesting set of circumstances that just happen to be part of who you are. Others that are working simply for the money, will tire easily and find it to be too much work to excel.

You will work harder, and you will stand head and shoulders above the rest, until you become the expert in your field. Concentrate on truth, commitment, hard work, discipline, and the realization of the "right" type of thinking, and then the money will come of its own accord. Four years of college, and 5 or 10 years in your field, and you will become the Master. You will be the one who everyone comes to for "The Answer," or you will be the one that figures out a better way and start your own company.

One of the most important Samurai texts ever written, by Miyamoto Musashi, “The Book of the Five Rings (1643)”, offers this advice: “Think of what is right and true. Learn to see everything accurately. Become aware of what is not obvious. Be careful even in small matters. Do not do anything useless.”

That means when you're in college, and everyone else is partying and doing drugs, you simply tell them, "Sorry, I've got a future waiting for me." Or tell them you get off on '57 Chevy's, whatever. You've got a life, and you don't need to change the way you feel. Your goals are too important, and your purpose and meaning in life takes precedent.

Have a good life.

Answer 4

First of all, if you're money is in an S&P fund...the best you can do slightly underperform the market. If the fund outperforms the S&P it's taking too much risk. If it matches the S&P then once you take out the managment fees your return is below the S&P.

If you want to be a millionare, I suggest you start reading biographies about self made millionares. You're gonna need a combination of charisma, networking ability, education, risk taking, and luck.

Being a millionare isn't all about money management, it's about discipline.

Answer 5

Money markets are OK, but stock-based mutual funds have higher return (and risk, I admit). You're young enough to take a couple bad years along with the many good years that stocks will give you. Don't be afraid of the risk--enjoy the returns.

Look at it this way: going back 5 years (to when you were 11), how have stock-based mutual funds returned compared to money markets? I know the answer without looking.

Answer 6

you're right about putting your money into a money market fund and letting it sit there for 5 years or more. The next thing would be mutual funds but they are risky. Then there are coins (for the silver and gold) and for that you need insurance to cover burglary....so I think what you're doing is fine for now.

Two things that will bring you money is meeting the "right" people and education (preferably in the fields of law, economics, medicine, IT, etc.), so start preparing to take college courses or take college courses and get A's. Good luck.

Answer 7

Congrats young man!

With this kind of attitude, you'll make it, I'm sure.

My only piece of advice about this: although I find your approach admirable, make sure that your money doesn't have such a high priority that you forget to live.

And whatever activity you choose to make your money, make sure you like it or, better, love it.

Let's make money!

Good luck

Marc