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Warren Buffet has the most profound advice for any young person just
beginning their investment portfolio ...
NEVER, NEVER, NEVER buy anything that will lose you money.
Hard to do? No, it means stay conservative, especially in your
earlier years. The miracle of compound growth means that ever
dollar you invest today will double about every 8 years based on historic
returns in conservative broad based growth funds. That means that a
dollar put in today by an 18 year old will be worth about $80 at age
65. So losing $1 dollar today (early in your investment life) costs
you $80 actually. Taking more risk later on a portion of your
portfolio puts far less at risk since both the % of your expanded
portfolio is smaller and the future growth remaining is smaller.
This lesson should be mandatory in all high schools. Deferring college
for 5 years would allow an 18 year old graduate to enter the work force
and sock away $5k/ year for 5 years. That 25K nest egg would
grow to $1.5 million by age 65 if conservatively invested. So, by
merely deferring college for 5 years the entire next generation can
insure themselves of financial security for life in retirement without
the need even for social security.
So again, remember, stay conservative when young and NEVER NEVER NEVER
lose any investment money.
Boater805
At 01:55 PM 10/12/2008, you wrote:
I would highly recommend that
you tell her to study for 5 years before
she begins investing. In the meantime, save money. Then when beginning
trading, do paper trades for two years, while still saving money. At
the end of two years, she will have much more insight into what she
should do. But for now, she just needs to study the market without
trading a dime. My two cents worth, since that's all I have left. Lol.
Dave M.
--- In
realtraders@xxxxxxxxxxxxxxx, "Steven Booska"
<boos1@xxx> wrote:
>
> My 22 year old college senior daughter called me today and expressed
and interest in investing in stocks. Her perception is that this market
is very oversold with GM, etc. offering opportunites. I have never
discussed trading or investing with her and feel lost as to where to
start. Does anyone have any rules, advice or reference to training or
education sources they would give their child in this situation?
>
> Steven Booska
>
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