As we know, this topic can be debatable on all levels. This is our own opinion so please, enjoy the post.
Observing today’s society, technology is allowing for the youth to grow up faster than they need to. When talking to a teenager about life, they broke down to me as they indicated they were scared of the future. I asked what their plan was after high school, but they said the common answer of college and get a job. That is when I asked, “What do you think the end goal is life? What is the whole purpose of life?”
It seemed to catch them off guard as they didn’t really understand the question so I asked it again but a bit more detail.
“Most say that being happy and helping others is the purpose of life, but what do you think it is? What do YOU think you should do? What is the end GOAL you are reaching for?”
They then answered, “To get a job and start a family and be happy.” Which is a common answer to those who are naive to life. Let’s think about it. Look at your family, how many of your family members go to work and live pay check to pay check trying to stay afloat in this game called “life”? Do they seem to be truly happy living like that? Do you think they would rather be able to wake up and do as they please - when they please – as they please not worrying about how they will pay their bills, feed their family or get evicted? Yes. Trust me the answer is, “Yes”…. The question is, how we get there. We see the goal of life is to be free with financial freedom. The earlier you start the faster you may get there. That is why it is important for us to address this with the younger generation.
What is financial freedom though? The short answer, it is to have enough money saved, invested and incoming that you do not have to work. There are many ways to establish financial freedom, but you must start a young age. If you feel that they path you want is to graduate high school, go to college, get a great job and then invest, that is great. Go for it! If we were to do it all over again, this is what we would do:
Age 9 – 14
Ask my guardians to open up a custodian account with and investment firm to purchase stocks (ETFS or Bonds). Invest into this account through birthday money, washing cars, cutting grass, do chores. Anyway I could make a few dollars… I would do and through it into some ETFs.
Starting monthly Income for age(s) 9-14: $0
Previous Balance for age(s) 9-14: $0
If we start investing into an ETF with a 4.28 dividend yield, we could make an additional $10,000 in five years. Of course, we know that these numbers would fluctuate, but this is just to give you an idea of your money working for you to get you closer to your financial freedom.
Ending Balance for age(s) 9-14: $39,900.00
While going to school, I would keep accumulating ETFS in my custodian account by getting a part time job, birthday money, graduation money and finding ways to make extra money to invest into ETFs.
Starting Income for age(s) 15-18: $494 + $400 = $894/month
$494 (Birthdays, Washing Cars, Cutting lawns) + $400 (working part time job)
Previous Balance for age(s) 15-18: $39,900.00
If we keep investing into an ETF with a 4.28 dividend yield, we could make an additional $20,000 in three years. Once again, we know that these numbers would fluctuate, but this is just to give you an idea of your money working for you to get you closer to your financial freedom.
Now. You are 18 years old with $94,000 dollars in the market working for us! We also have 2,123 shares that we can sell covered calls in the market with making an additional income. That can bring in an additional $400 a month, but we didn’t include that into the numbers - not yet at least.
Ending Balance for age(s) 15-18: $39,900.00 + $54,200.00 = $94,100.00!!!
Starting Income for age(s) 19-23: $1,225.00/month
Previous Balance for age(s) 18-23: $94,100.00
After graduation, we would then go into the military. Finding an MOS. (military occupation Specialty = a job) that is offering a signing bonus and job that can help us after we get out of our military contract. New recruits can earn up to $40,000 in enlistment bonuses! Realistically you will be looking at around $15-$20,000.
Once we go through all of your military training (Boot camp, MOS training etc…) and arrive at our first duty station, we would get a second job!!! Yes, that is correct you will be working in the military during the day and a second job after that. Now you will be 19 with two lines of incomes as your previous invested ETFs are building dividends.
Let’s take a deeper look into this:
We signed up for the military and got a $20,000 signing bonus. We would get $10,000 now and the remaining $10,000 at the middle of our contract. We also took away the taxes for from the bonus so after all that we would purchase $7,000 worth of ETFs shares. We also increased the share price just for this example.
WOW… now we are 23 years old and have around $200,000 and 4,825 shares working for us in the market. Of course there are other variables we did not really dig into, but once again this is just so you get an idea. Like your pay increases as you are in the military, your part time job while you are in the military. There are so many benefits that come with joining the military:
The most important factors we suggest are…
“You have probably heard the expression “the first million is the hardest to earn.” That statement is absolutely true. The first million dollars you earn is by far the hardest million dollars to make. Most people believe earning their first million is the hardest because they start with nothing, while subsequent millions build on the previous.”