Josh and Austin go back in time and share 10 things they wish they would have known after graduating high school, including admitting that at that age, they didn’t know everything. This episode is filled with advice for young adults, including tips on compounding, cost of education, credit cards and even changing a tire. Listen now or share with a young adult in your life!
Main Talking Points
[2:02] – #1: Compounding
[7:47] – #2: Cost of Education
[12:10] – #3: You Don’t Know Everything
[13:47] – #4: Credit Cards
[16:41] – #5: Paying for College
[20:12] – Dad Joke of the Week
[20:42] – #6: Change a Tire
[24:08] – #7: Debt Free
[25:51] – #8: Enjoy Each Stage of Life
[28:02] – #9: Understanding Employee Benefits
[30:03] – #10: Free Information
Links & Resources
011: So How Do You Pay For College?
035: Ask An Advisor: College Edition
Invest With Us – The Invested Dads
Free Guide: 8 Timeless Principles of Investing
Social Media
Full Transcript
Intro:
Welcome to the Invested Dads podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
Hey, hey, hey, welcome back to the Invested Dads Podcast, a podcast where we take you on a journey to better your financial future. Today, we are going to be talking about 10 things we wish we would have known or I guess 10 things we think today’s high school graduates should know before entering the, and I’m doing air quotes on a podcast, real world.
Josh Robb:
Ah, the Real World. We’re going to help them audition for the MTV Show.
Austin Wilson:
Hey I bet some people’s careers have gotten started off real strong from the Real World.
Josh Robb:
Off the Real World.
Austin Wilson:
Yeah, probably not. Anyway, let’s just jump right into it because we’ve got a lot to get through today. Yeah, it’s probably no secret that today’s high school graduates and high school graduates when we graduated probably should have known some things about real life and finances, even which we’ll talk about both aspects of that when they graduated. There’s a lot of emphasis on learning how to write in cursive and to do algebra and to learn about Shakespeare but most people can’t do basic things when they graduate high school.
Josh Robb:
Yep. Yeah, you’re right within our school system right now, there’s a lot of push towards learning all the underlying things for English and math and sciences, the STEM that are important. Very important.
Austin Wilson:
They’re kind of important, but you won’t use them in your real life.
[2:02] – #1: Compounding
Josh Robb:
I use them all the time. But the other piece that’s missing is at 18 an adult, a lot of people head straight into the workforce on their own. And some of the things that they miss out on, we think maybe we could touch on today. At least just a couple of them. But the first one that we think is important and is one of my favorite things is compounding.
Austin Wilson:
Compounding.
Josh Robb:
Compounding. And so the idea, for an 18 year old to know, hey, if I start investing now, if I’m putting my money to work now and giving it enough time, this compounding is going to be huge. And so we’re going to start with just an example. We got three people.
Austin Wilson:
I love example, Josh.
Josh Robb:
Examples, we have Karen, we have John.
Austin Wilson:
Wait, is this Karen.
Josh Robb:
Different Karen.
Austin Wilson:
The meme that everyone uses.
Josh Robb:
This is the pre Karen Karen.
Austin Wilson:
Okay, pre Karen Karen.
Josh Robb:
Yes. Just a regular Karen, John and Tom. They’re all starting out. They’re all going to start investing. Karen, she’s starting investing at age 20.
Austin Wilson:
Woo, right out. Fresh out.
Josh Robb:
Right out of there she’s going and she’s going to put $5,000 in a year for five years. Five times five.
Austin Wilson:
25.
Josh Robb:
The math you learned in high school.
Austin Wilson:
Yeah, so that one is kind of important.
Josh Robb:
$25,000 she’ll put in. From 20 to 25, she’s investing money, then she stops.
Austin Wilson:
She retires.
Josh Robb:
No, she just stops investing. John.
Austin Wilson:
Your brother.
Josh Robb:
Yep. John is hanging out. He’s going to wait to start until 25.
Austin Wilson:
Gotcha.
Josh Robb:
Okay. Karen started at 20, five years. John, he waits five years to get going. I don’t know what he’s doing. He’s out.
Austin Wilson:
Partying.
Josh Robb:
Having a beer or whatever he’s doing.
Austin Wilson:
Early twenties.
Josh Robb:
Yep. He’s 25 and he gets started. He’s like, I can do $5,000 a year and you know what? I’m going to do it for 10 years. Five times 10.
Austin Wilson:
50 grand. Double the money.
Josh Robb:
$50,000, putting in twice the amount, but he waited five years longer. Then we got Tom. Tom, he gets a little lost out there in the world. He doesn’t start investing until 35.
Austin Wilson:
35.
Josh Robb:
15 years later than Karen, 10 years later than John. At 35 he says, “I got $5,000 a year I’m going to invest.” And he’s going to do it all the way through until he’s 65 years old. He’s going to invest.
Austin Wilson:
30 years.
Josh Robb:
31 years if you count that first a year.
Austin Wilson:
Yeah, exactly.
Josh Robb:
A $155,000 is what he’s putting in because he’s going to go all through the workforce putting 5,000 in. If we assume just a average rate of return for them and we go all the way to age 65, how do you think each of them did? And again, we’re talking about compounding so obviously we’re pointing towards something. Karen who started at 20, put it in for five years, 5,000 in, put $25,000 in of her money, it grew to 1.6 million. 1,646,689.
Austin Wilson:
And she only put 25,000 in.
Josh Robb:
1,646,689. Remember that number? Lock it in. John, he waited five years and he put double the money 50,000 in, so at age 65, he also has 1.6, just a little less, 1,631,000. We’re talking within striking distance.
Austin Wilson:
For an extra 25 grand.
Josh Robb:
He had to put double the money in to get there because he waited five years. That five years cost him that, cost him the extra 25,000 of his own money. Then you got Tom.
Austin Wilson:
Tom, poor Tom.
Josh Robb:
Poor old Tom.
Austin Wilson:
Poor Tom.
Josh Robb:
He waited 35. 35 realistically is not that far off a lot of people really start getting serious about investing. If you just think about normal life. He had to put $5,000 in a year for the rest of his working career. At age 65, he only has 800, I say only. $845,000.
Austin Wilson:
But half. That’s half.
Josh Robb:
That’s a lot of money, but it’s half of what the other two put in.
Austin Wilson:
For a lot less of their own money.
Josh Robb:
For a lot less of their own money. And so his percentage of investment is a lot smaller in comparison to what he grew it on. He had to put a lot more of his own money in to get there. What does that mean? The longer you give your money to invest, the harder it works for you. And so that’s the one thing that I wish every 18 year, again, $5,000 a year. That’s less than 500 a month. If you coming out of college, get a job and you can just find that to put aside, you’re a millionaire with putting $25,000 in. That’s crazy.
Austin Wilson:
I guess yeah. At the end of the day when you graduate or whether that be high school or college, whatever that looks like for you, you need to invest right away.
Josh Robb:
Yes, yes. Start saving.
Austin Wilson:
Something, something.
Josh Robb:
That habit is huge. Now another way of looking at it, we updated and said, okay, now a Roth IRA, you can put $6,000 in. That’s a great savings vehicle and so if you started saving $6,000 a year in a Roth IRA at age 20 and you’ve got an 8% return, just we’re using a flat 8% return, you would end at 65 with $2.5 million.
Austin Wilson:
Wow.
Josh Robb:
And that’s $6,000 a year while you’re working. Again, that’s longer than she was doing.
Austin Wilson:
That’s $500 a month.
Josh Robb:
But that’s all you got to do to be a multimillionaire. But what’s crazy is if you just wait 10 years, so what? At each 30, you still do 6,000 a year from 30 to 65, 8% return, you get 1.1 million. You get less than half of what you were getting 10 years.
Austin Wilson:
That first 10 years is huge.
Josh Robb:
Yes. Huge. And if you wait until you’re 40.
Austin Wilson:
Not good.
Josh Robb:
20 years later, you again only, it’s big money, it’s large dollar, but only get 473,000. You’re missing out on over $2 million by waiting 10 years. Crazy.
Austin Wilson:
That is why we can’t afford to wait.
Josh Robb:
No. That’s the first one, I wish all 18 years just throw a little money in account and don’t touch it.
Austin Wilson:
Or that could be when you graduate college or get your first job. Whatever that looks like just put money in.
Josh Robb:
We were using 20, at 22 it’s not a huge difference.
Austin Wilson:
It’s not, it didn’t even make our list, but this is where we would feel very strongly that when you graduate college, even if you have student loans, you should be at least getting your match at your employer. Because of that cost.
Josh Robb:
Save a little bit. Get the habit started. Habit is huge.
Austin Wilson:
Habit is huge. All right, Josh, that is huge.
[7:47] – #2: Cost of Education
Austin Wilson:
Number two and this is something that I think we feel pretty strongly about as well, carefully consider the cost of your education versus the expected pay that you’re going to get. And what I’m kind of meaning by that is, aim to get a degree in a field that has plentiful and good paying jobs because otherwise you’re not going to get your bang for your buck for your education. We’re specifically talking about college here.
Josh Robb:
College education. Yeah. Your cost for high school education, it’s required.
Austin Wilson:
Usually low.
Josh Robb:
And it’s kind of required. Yeah, go through the schooling that’s needed, but you’re right. And this is where I fall on this. I got four kids and they’re all young, but as I’m watching them grow, my hope for them is they’ll be able to find something they’re passionate about and then back into how do I get there? There’s certain careers that they may not need a college education for. If that’s something they’re passionate about and really want to do, then find is it an internship? Is it apprenticeship? Is it some of work study? How do you get there? And what gets you the best chance of success there? It doesn’t have to be high paying either. It’s just what do you love doing? And can you survive on that? That’s the key, it’s you got to be able to survive on that, but you don’t have to necessarily go to college just because. If you have a career that you can say, there’s another way, there by all means take that.
Austin Wilson:
Oh yeah. I think college is an absolutely powerful thing that you can use to do better financially or to learn things or to do whatever. I think that’s a powerful thing, but it’s by no means the only way to have a fulfilling life. And I think that that’s something that’s probably pushed on young people that really isn’t the truth of the matter. You don’t have to.
Josh Robb:
Especially if you don’t know what you want to do.
Austin Wilson:
Don’t go to college.
Josh Robb:
College is not a good place to sit there and find out because you’re paying a lot of money.
Austin Wilson:
You’re going to spend a lot of money.
Josh Robb:
To figure out what you want to do. Now you may take a year or two working or doing something and then figure out what you want. Then you could go to college for whatever that is. But if you put a couple of years in, then change your mind, that’s a lot of money, you’re going to to pay back for thinking about what you want to do.
Austin Wilson:
And this is, we kind of differ a little bit on the way we look at this, but I work fortunately for me, I work in a field that I really love and I enjoy. It’s a great job, but I also feel like it depends on how you want to look at your family life going forward. But if you aim to be the provider for your family, you want to earn good money so that they can have what they need taken care of and have good benefits. I would focus on getting a job that is going to accomplish those things and then even if it’s not something, if it’s good and you’re okay with it, that’s fine and you’re good at it that’s good. But even if it’s something that you’re like, it’s not your dream. Well, you can do some things on the side to have your passions fulfilled while also providing for your family very well.
There’s kind of two ways to approach that. You don’t need to have necessarily the biggest passion for what you do. It’s great if you do, but paying the bills and providing for your family is very important. And there’s always outlets that you can find things that you’re passionate about, but it’s great if you can do what we do and that’s what we are passionate about what we do and we get paid to do it.
Josh Robb:
And there’s stepping stones. Your passion, you may not be able to get that job right out of college, but you may have to take some jobs that are not maybe quite as fun to work towards that. And so, yeah you’re right. Maybe whatever it is my end goal is I’m going to want to get here, well there may be ways to get there that you say, “I’m not really a fan of what I’m doing, but I know this will get me to the next step, which will get me to where I’m at, where I’m going to be completely satisfied with what I am.” And every job, I think there’s some things you like, love and some things you may not like. There’s certain things you have to do for every job. And so I know some people who enlist, in my opinion, they just always seem to be dissatisfied.
And I’m like, you’re looking for the perfect job. Maybe that doesn’t exist but there’s things at the job you’re at now that you just love and you’re good at. Can you look past the other things, I hate doing this part of my job. Well, so does everybody probably, but someone’s got to do it. Make sure there is a passion involved in there, but you’re right there may be some things you got to do just because you need it. Those that are paid and they’re there.
[12:10] – #3: You Don’t Know Everything
Austin Wilson:
Number three and Josh, I want you to elaborate this. This is a good one. You do not know everything at 18.
Josh Robb:
At 18. Or any age.
Austin Wilson:
Or any, well, I don’t get it either.
Josh Robb:
But I feel like, if I think back to 18 through early college, you think you got the world figured out. And when we were creating this list, part of the reason why I like this one was if I would have been more open to listen to people who had already experienced some stuff, I would be a lot farther along in my life than I am now. And again, going back to even just that compounding, if somebody would have came up to me and said, “Hey, when you get your first job, throw some money in and watch it grow.” That’s huge. But I thought, oh, I know what I’m going to do. And I got my ideas and I think just realizing that there are smart people out there and they may have experienced things that can help you if you’re willing to listen.
Austin Wilson:
Yeah. Yeah. It’s I think that when we turn 18 or we graduate high school or even we graduate college whatever, we feel like we know everything. And I think, like I said, it’s a really dangerous.
Josh Robb:
Now I was the exception. I did know everything.
Austin Wilson:
You did. You were the one.
Josh Robb:
I’m just saying this to everybody else.
Austin Wilson:
For everyone else, yeah. Yeah, I feel like it’s a really dangerous place to be because you really don’t have life experience. And only through those life experiences and those years are you going to learn.
Josh Robb:
Yep. And now that I’m older, I look back and I’m like, man.
Austin Wilson:
You’re 19 now.
Josh Robb:
I’m saying the same things now to kids that age that I was hearing and I’m like, they were probably right. They’re all just, you don’t know what you’re talking about. Yeah they probably do. You’ve done everything.
[13:47] – #4: Credit Cards
Austin Wilson:
Number four, Josh, number four. How credit cards work.
Josh Robb:
You swipe, free money.
Austin Wilson:
Free money.
Josh Robb:
And you’re good to go.
Austin Wilson:
Sometimes you get paid to do it.
Josh Robb:
It’s awesome.
Austin Wilson:
Yeah, I feel like as a 18, 20, 22, whatever that looks like for you, year old, not fully understanding how credit cards work is dangerous and credit card companies, they’re kind of, they go in with that. Young people can get a credit card, might not have a huge limit.
Josh Robb:
And a free toaster.
Austin Wilson:
And a free toaster. They can get approved for a credit card very easily without a lot of credit history or whatever. And then you can go out and buy whatever you want.
Josh Robb:
You don’t have to pay for a month.
Austin Wilson:
Yeah. That’s just it. They don’t really realize that if you don’t pay for what you bought the prior month or whatever right away.
Josh Robb:
23% interest.
Austin Wilson:
You are getting huge interest charges and you can, it kind of goes to the opposite of compound interest, it’s compound interest.
Josh Robb:
It compounds the other way.
Austin Wilson:
It’s interest against you. And if you have many credit cards and you max them out and get a new one and max them out and get a new one, you can be paying on those things for years. And what’s that? What’s that video game or that Xbox or that whatever you bought TV, was that really worth the interest on top of it for five years?
Josh Robb:
The total cost for it. Yeah.
Austin Wilson:
What happens when you buy something is it’s great and credit cards can be a very useful tool. Check out our episode we talked about
Josh Robb:
And we’re not against credit cards.
Austin Wilson:
We’re not against them.
Josh Robb:
We just, especially for a young person just starting out.
Austin Wilson:
Caution.
Josh Robb:
Understand what it is, how much you are allowed to put on it, but how much you can afford to put on it.
Austin Wilson:
Absolutely.
Josh Robb:
That’s huge.
Austin Wilson:
Well you should really approach it like you’re paying for it when you buy it. If you have the money in your account, great.
Josh Robb:
Yep. And again, we’ve talked about this, credit cards are great for building up your credit score so you can get a down payment on the house. You can get a nice interest rate for your mortgage. You can get approved for better interest rates and save money down the road. Credit cards are useful for that. You can build a credit history, but you got to be careful with them.
Austin Wilson:
Absolutely. Just understand how credit cards work. It’s not free money. And despite the fact that you might get cash back, you also have to pay that off, the bill when it comes. Our advice, yeah start getting and building credit early. Start with something simple, like hey, only put your gas on this card or whatever that looks like for you.
Josh Robb:
Utilities or whatever.
Austin Wilson:
Something simple and make sure that you’ve got the money to cover that as it happens and then set up our favorite thing, one of our favorite things, automatic recurring payments that use the statement balance as you get it.
Josh Robb:
Just pay it off every month.
Austin Wilson:
You’ll never have an issue. And you can use the tool as a tool, as it should be for you.
Josh Robb:
There’s a reason why credit cards can offer cash back to people.
Austin Wilson:
Because most people don’t.
Josh Robb:
Other people are paying huge interest to cover those costs.
Austin Wilson:
Exactly. That’s number four, how credit cards work.
[16:41] – #5: Paying for College
Austin Wilson:
Let’s talk about number five and it kind of goes back to what we were talking about with higher education, but it’s probably very valuable for most people to understand as they’re especially exiting high school, how to pay for college and how paying for college really works. Because first of all, we had just mentioned, I think it’s kind of pushed that college is the only way, go for it. It’s great. And just make it happen and pay for it later. Well, that’s kind of a tough spot that a lot of people are put in and a lot of people go to school for maybe they don’t even need to go to school and they take out a bunch of student loans for something that they don’t use or they’re just going to be taking out additional debt. That’s going to set them back when they’re young and college is not free. Did you know that?
Josh Robb:
College is not free.
Austin Wilson:
Despite what some politicians are kind of working toward.
Josh Robb:
Maybe down the road.
Austin Wilson:
Towards looking at.
Josh Robb:
But right now it’s not.
Austin Wilson:
Right now, college is not free and it’s never been free and you have to pay for it and with paying for it unless you have the cash for it, which is great and we also have an episode about paying for college and 529s and all of those kind of things. We’ll link all these episodes in the show notes, but there is interest associated with student loans. When you take out that student loan, whether that be a federal student loan or whether it be a private student loan, there’s interest associated so you’re going to pay more than you’re borrowing. And that’s something that has put millennials and gen Z behind the eight ball in terms of investing like we had talked about because we have graduated with student loans and a lot of people feel a lot of pressure to pay those things off because they’re huge. Well, it’s a tough spot to be in because as we mentioned before, the cost of waiting for retirement savings is huge. You really need to be doing both, but we are taking out more way more loans than any other generation before us.
Josh Robb:
Yes. Yep. Definitely.
Austin Wilson:
Paying for college.
Josh Robb:
And who’s paying for college? Sometimes you get support, help, scholarships, all that stuff. But at some point your loans, which sometimes I don’t think everybody realizes how much they’re accruing in loans because they don’t have to pay it while they’re there, they come due. And so again, it’s just a matter of understanding each year, what the cost is for what you’re getting and making sure it’s worth it.
Austin Wilson:
And not everyone’s going to go to their dream college. You actually have to take, there’s a financial responsible decision. You can’t go to Harvard if you don’t afford it or whatever. You’re like, it sounds great to go to college in Hawaii, but is that really realistic? How are you going to pay for that? And first of all, in state tuition is typically a lot cheaper than out of state and public tuition is cheaper than…
Josh Robb:
Private.
Austin Wilson:
Private tuition. Kind of look at your resources and your ability to do these things. And then overlay that with the reality of the cost, because they’re not the same. You’re going to have to compromise somewhere and being willing to compromise is going to save you down the road.
Josh Robb:
And then another thing, again, going back to wish I knew when I was 18 is look at what extra benefits colleges offer, like job placements, internships. To me really that’s the value at the backend is if I can get an internship at a company that I may want to work at, I’ve a better chance of getting a job there later on. And so if a college offers a lot of those additional programs, that’s a nice benefit. And maybe it could be the decision making trying to decide between a couple.
[20:12] – Dad Joke of the Week
Josh Robb:
All right, let’s take a quick break. I got a dad joke for you and maybe a bonus one we’ll see.
Austin Wilson:
I like it.
Josh Robb:
Here’s the first one. First dad joke. The police came to my house and asked where I was between 5:00 and 7:00. I said, “Preschool.”
Austin Wilson:
That’s funny.
Josh Robb:
Not time but age. That’s funny. Funny stuff. Here’s the other one. Do you know what happens when it rains cats and dogs?
Austin Wilson:
Oh, it’s a mess.
Josh Robb:
You can step in a poodle.
Austin Wilson:
You can step in a poodle.
Josh Robb:
That is funny.
[20:42] – #6: Change a Tire
Austin Wilson:
All right. And we’re back. We got five more. It’s pretty exciting. Number six, Josh. I think everyone should graduate knowing how to change a dang tire. It’s so sad that some people don’t because you have to be able to do that. And just first of all, nowadays.
Josh Robb:
First step, here you go. First step, when you get a car.
Austin Wilson:
See if it has a spare tire.
Josh Robb:
Make sure it has a spare tire. True story.
Austin Wilson:
Well new ones sometimes don’t because they get to save the weight and it gets better mileage.
Josh Robb:
That’s what I’m saying. True story.
Austin Wilson:
And cost.
Josh Robb:
Tony, our boss, Tony Hixon told me a story. He got to used van.
Austin Wilson:
Oh yeah, I remember.
Josh Robb:
And got a flat tire and went to change it and they did not have a spare tire.
Austin Wilson:
Had to get towed.
Josh Robb:
Check to make sure you have a spare tire so you can change it if it does get flat.
Austin Wilson:
Yeah, absolutely. Especially, those newer vehicles.
Josh Robb:
Got to watch them.
Austin Wilson:
They will not put a tire in to save on cost and they’ll not put a tire and save on weight.
Josh Robb:
You’re going to need a tire.
Austin Wilson:
And you really need to be able to.
Josh Robb:
You need a tire.
Austin Wilson:
But if you do have a tire, you got to know how to change it.
Josh Robb:
I know I have a spare tire because it sits on the back of my Jeep and you can see it.
Austin Wilson:
See it.
Josh Robb:
That’s right. It’s right there.
Austin Wilson:
I remember I was in college and I had a 96 Accord. I loved it. It was a great car, no air conditioning. We called it 470.
Josh Robb:
That’s what the windows are for.
Austin Wilson:
We called it 470. You put the four windows down, go 70 mile an hour and you get cold. On a highway, I’m going to say that.
Josh Robb:
On a highway, the speed limit is 70.
Austin Wilson:
Exactly. Perfectly legal.
Josh Robb:
That’s how you drive safe.
Austin Wilson:
Perfectly legal. I was at Walmart here in town during college and I came out of Walmart and I looked at my car. I had a flat tire. I had to change my tire to my donut in the Walmart parking lot and drive around to get a brand new. They had the exact tire in stock that I already had.
Josh Robb:
Ready to go.
Austin Wilson:
I got my tire.
Josh Robb:
I bet they did that, they probably flattened your tire just to get you in Walmart.
Austin Wilson:
We’re going to get some business here.
Josh Robb:
Conspiracy.
Austin Wilson:
Learn.
Josh Robb:
But it’s safety. Really it’s a safety. If you get a flat tire out in the middle of nowhere or on a busy place where you don’t want to leave your car or if you have other people in your car with you, you want to be able to get from one location to another, to a safe spot. Understanding how to change a tire and it’s not all that difficult, the hardest I’ve always had is those lug nuts sometimes can be stubborn.
Austin Wilson:
A pain. I know.
Josh Robb:
And so other than that, it’s not too bad.
Austin Wilson:
Yeah. This is, it’s probably building on that, good to know what tire pressure is. On the inside of your door panel, it tells you what size tire and how much air pressure each tire should have. And it’s good to know how to read a tire pressure gauge because I had a car that did not have the fancy little thing.
Josh Robb:
Alerts.
Austin Wilson:
On my dash right now, it has the alert, which it’s cold right now so once in a while, my tires will get low, but that’s just how it works in the cold, but pre this vehicle or my couple vehicles ago, my old car did not have anything. I had to go manually visually look to see if everything looks good and then go around each one with a tire pressure gauge and check. And if you don’t know, you need to use a tire pressure gauge because that can be a first tell at, hey, this tire is going down slowly it has a nail in it. You won’t even see it.
Josh Robb:
You won’t see the nail until it’s too late. And those tire pressure, they have digital ones now. They’re not that expensive.
Austin Wilson:
I’m old fashioned.
Josh Robb:
If you don’t like to do a little pop out little indicator, you could use the digital one. It’ll tell you right straight on there. Then you need to know well, what’s it supposed to be? You got to look on the door or if you have different size tires maybe on the tire. But high level, understand those pieces will save you.
[24:08] – #7: Debt Free
Austin Wilson:
Yeah. All right, number seven, something we’re really passionate about, the freedom of being debt free.
Josh Robb:
Now again, we’re talking about an 18 year old, so realistically they may have some debt, maybe a car payment, something like that, but heading into possibly college, they may be incurring more debt. But the idea of managing that debt and as soon as possible, getting that debt down to zero is huge. Now we always kind of separate out mortgage debt as something a little different because it’s tied to an appreciating asset instead of depreciating. Education’s kind of in that middle ground because you get.
Austin Wilson:
You get an asset that works for you.
Josh Robb:
You get a higher pay potential, which is a positive, but it is a debt that will need to be paid off.
Austin Wilson:
In a higher interest rate because there’s no hard asset to go back on.
Josh Robb:
Right. But in general, understanding just the burden of owing somebody is stressful. And again, coming back to, depending on what your career choice is, that burden, that debt could be more if it’s maybe a fluctuating income, maybe it’s not a steady stream of income, those type of things that getting debt free is huge.
Austin Wilson:
Absolutely. Yeah, as soon as you can realistically and responsibly get to where those are, we feel like that’s a very, very important thing because it sets you up to be able to do what with your money? To maybe invest and save a little bit more.
Josh Robb:
Grow it, compound it.
Austin Wilson:
To grow it, to compound it. And it’s just, there’s a lot of mental freedom associated with that. If you don’t have a car loan and a student loan and a credit card, yada yada yada, over your head that you have to make sure you have enough money for every month, that allows you to sleep better at night, to feel better about your situation overall. And that’s something that we really encourage. Josh, what’s number eight?
[25:51] – #8: Enjoy Each Stage of Life
Josh Robb:
Number eight is enjoy each phase of life. Don’t get caught up by looking too far ahead. And again for an 18 year old, you’ll be like, I just can’t wait till I’m X years old. I’ll be able to do this or that or all those things. Enjoy each phase because you only get to live it once. And the things you’re looking forward to may be great but you’re also going to look back and say, “Man, time flies.” And so now, I turned 38 this month and you look back to 18 year old, time flies and you think, man, there was some good opportunities I had then that I don’t have now that either I’m glad I took advantage of or I wish I would have taken advantage of. And so I just say, for 18 year old, you’re at the point where you can make some dumb decisions.
Austin Wilson:
And do okay.
Josh Robb:
Plenty of time to recover from it. But you also have the ability to try things out. This is the point in your life where you get to figure out what do I like? What am I passionate about? What are the things longterm that I could settle in and really enjoy? And you can try it. And if it doesn’t work, you can move to something. This is a point in your life where you really have a lot of flexibility.
Austin Wilson:
And that with that flexibility, you just have so much. At that age, you’re probably not married. You probably don’t have children. Maybe you don’t have pets or a mortgage or whatever. You have so much freedom to do whatever you want. You can travel a little bit within your means. You can and to just have some adventures, some things that you really can’t, it’s a lot harder to do once you settle down and you have a house and two dogs and a family, which is its own great things to look forward to, but it makes doing some more risky things like you had mentioned, a little bit more tricky and you’ve got to plan ahead. And it’s just not as spontaneous or as adventurous. Yeah, enjoy each phase of life because each phase of life has its own perks and its own challenges that weren’t necessarily present in the ones before. And aren’t necessarily present in the ones to come there’s pros and cons. it’s great.
[28:02] – #9: Understanding Employee Benefits
Austin Wilson:
Number nine.
Josh Robb:
Number nine.
Austin Wilson:
You need to understand your employee benefits and obviously there’s a whole package usually when you get a full-time job, whether that be out of high school, out of college, when you’ve got health insurance benefits, you’ve got retirement benefits, you’ve got all of these things. You need to very clearly understand what those are, how much you’re paying for them and what they’re doing for you, because that’s going to help you set yourself up for A, not having too much cost in the short term, but also long-term success as maybe you might retire.
Josh Robb:
Yeah. And no one else out there is going to be forcing you or encouraging you to sign up for these. They’re going to show you what’s there, but they’re not obligated to make sure you get all these things. If your company offers life insurance and you don’t have any life insurance, they’re not going to be tracking you down and saying, “Hey, make sure you sign up for this.” They’re going to say, “Here’s your benefits. Tell me what you want. Go to work.” And so you really need to look through all those, because there’s maybe a lot of things there that are cheaper than if you go out and get it somewhere else that if you just knew they were offering them to take advantage of it.
Austin Wilson:
Yeah. I guess to that point, ask.
Josh Robb:
Yeah, see what’s there.
Austin Wilson:
When you’re getting onboarded and going through all of these things, ask questions because those questions are going to help you save in the long run. Yeah, a lot of bigger companies specifically have negotiated rates that are usually a little bit cheaper or whatever than if you were to do it alone. That’s why they offer those.
Josh Robb:
Even some auxiliary things. I was just talking to someone the other day who said their company offers free estate planning and they have a list of attorneys. But you just have to sign up and they’ll have for free, let you set up a will.
Austin Wilson:
Wow.
Josh Robb:
That’s huge.
Austin Wilson:
That’s cool.
Josh Robb:
And it’s just there, but you got to do it. You got to take the own initiative to say, “Hey, I need to sign up, get me on that listing.” But there’s probably a lot of benefits out there. Maybe they have a softball league. There you go. That’s a benefit. Let me sign up because I’m going to be active. But see what they have, ask some other employees as you get in there and get settled in, ask around. Say, “Hey, is there anything that I need to know about? Is there anything I should be doing?” I’m sure they’d love to help you.
Austin Wilson:
And last but not least.
Josh Robb:
Not least.
[30:03] – #10: Free Information
Austin Wilson:
Number 10, we want you to know that there is free information out there to help you understand things, especially when it comes to the finance world. This podcast is one example of that.
Josh Robb:
Yes, it’s free.
Austin Wilson:
It costs you nothing to listen to it and we thank you for.
Josh Robb:
Besides your time.
Austin Wilson:
Besides your time. And your time is valuable and we appreciate you listening, but there’s a lot of free information on the internet and from just experts around the country and the world that can really help you set yourself up. But yeah, there is. Just utilize free information, read up, do some research and we’re glad you’re listening to this free resource as well.
Josh Robb:
Yep. And really if you’re saying, “I just need help with debt.” There’s a lot of free resources out there on debt management or getting out of debt. If you’re saying, “I want to know more about credit cards,” there’s a lot of, Jess, one of our colleagues she has the everyday advisor. There’s some information on there. Blogs, free. Read up on them, see what they have. And so yeah, take advantage of that. Take advantage of the library. A lot of times there’s programs and stuff at your local library that you can get involved in to learn more about what’s going on.
Austin Wilson:
Absolutely. Well, as always check out our free gift to you, speaking of free things. It’s a brief list of eight principles of timeless investing. These are overarching investment themes to keep you on track, to meet your longterm goals. And we talk about handful of these things in there. Check that out. It’s free on our website. Josh, how can people help us to continue to grow this podcast?
Josh Robb:
Yep. Make sure you subscribe, that way you can get our podcast every Thursday. Leave a review on Apple Podcasts. That’s always great for us, helps us rank higher and that helps more people find us. And then if you have any ideas, want to talk about what you wish you knew at 18, shoot us an email at hello@theinvesteddads.com. And as always, if you know someone who’s around that age and you think this would be helpful, share that episode with them.
Austin Wilson:
All right, well until next Thursday, have a great week.
Josh Robb:
Talk to you later.
Austin Wilson:
Bye.
Outro:
Thank you for listening to the Invested Dads podcast. This episode has ended, but your journey towards a better financial future doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe and don’t miss the next episode.
Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.
