Invest in Your Future: It’s Simpler Than You Think

Dear Grace and Steven, 

So, does has any of this got you thinking yet?  Everybody knows saving and investing for their future is a good idea, but most people: 

1. Don’t know how to go about it. 

2. Feel like they’re barely making their bills as it is.

3. Think they’ll start sometime in the future but not quite yet. 

Let’s take these one at a time.

Don’t know how to go about it. 

Believe it or not, the investing and money management is the easiest part of all this.  You don’t need a financial advisor.  You don’t need to study market trends.  And you certainly don’t need to constantly monitor your investments and move your money around.  In fact, doing these things is a sure recipe for reducing your gains.  Once you decide you want to set things up and get started it will be as easy as a couple of mouse clicks and you’re off and running.  In today’s world, the most successful way to invest is also the simplest.  Your only job is to add, add, add.  There is no ongoing management necessary.

Feel like they’re barely making their bills as it is.

I don’t know if this is the case with you, but I think I do know that you have been doing a great job paying the bills you have.  As someone who has cosigned on a couple of your leases I greatly appreciate this.  J  Congratulations on being responsible bill payers.  You may feel like that’s not a big deal and it’s just what you should do, but there are lots of people, young and old, that don’t have this ability.  Since you are proven in this area, I’ll finish this letter with a suggestion for you.

Think they’ll start sometime in the future but not quite yet.

Here’s the major problem; starting “sometime” can turn into months, then years, then decades, then never. As I said in your last letter, money’s greatest power is compound interest and time.  The longer you wait, the longer you reduce money’s power.  The question is “When should you start?”  Regardless of your age, income, or situation there is only one correct answer:  Now. Here’s my suggestion for you: 

Make “Our Future” one of the monthly bills that is absolutely mandatory that you pay. 

Give it every bit of seriousness that you do your rent and other “have to” payments.  If it’s the end of the month and you have $1605 in your checking account and your $1600 rent is due tomorrow, you’re not going out to dinner, right?  Treat your monthly investment in yourselves with the same amount of importance.  Even make up invoices to “Future Us” if that helps.  Start with an amount that takes a little effort but is comfortable.  The amount isn’t as important as the getting started.  In time, you’ll find you’ll want to find more ways to cut back on your non-essential spending so you can increase the figure going into your growing stockpile.

Love, 

Dad

- Paul Mollenkopf is the author of Once Upon a FI