An Open Letter to the Next Generation

Life Is Beguiling! When you're young, older adults tell you to take care of your teeth and to avoid risky (self-destructive) behavior (you know what I'm talking about — alcohol, cigarettes, daredevil stunts, drugs, unsafe sex, etc.). It's very likely that you'll one day experience some of life's temptations; and your early samples may appear to be quite pleasing. Because you're young and strong, and naturally feel immortal, it's easy to miss or dismiss the personal costs (risks) associated with these early samples. But there is a real cost (health damage) imposed; and these costs compounds with usage. It's human nature to want more of an apparently good thing; and it's easy to believe that if a little is good, then a little more is better. But the Law of Diminishing Returns clearly shows that more is not always better; and even though a little more does not provide much more incremental benefit, the increment still cost just as much, if not more because of compounding abuse. Understand that there is an accumulative cost associated with risky behavior and that the bill will have to be paid later, when you can least afford the expense.

Unfortunately, our family (like some others) has seen a number of tragic early deaths due to a self-destructive life style. Some have speculated the existence of a gene that predisposes someone to compulsive-addictive behavior; and it may run in my father's genes. But research has clearly shown that when it comes to the question of "Nature versus Nurture", the way you're raised and live clearly dominates the results. So even if you carry this gene, you're not predestined to live a short and tragic existence. You can choose to live a healthy, happy, and successful life. The best way I know to do this is to associate yourself with people who are already living this life style; and to avoid peers that put pressure on you to risk your future quality of life just to experience a momentary thrill.

— Be honorable, dependable, and learn to play well with others. —

Invest in your education as it clearly pays the very best lifelong returns. Learn how to learn, analyze information, and to think for yourself!

You may be thinking, "Education is expensive and I don't have the money." Check out tuition aid and scholarship programs at your local high school, college, and university; and now there is a lot of free or low-cost, quality education on the Internet. Never under estimate the power of being able to demonstrate an ability on a job interview and exam. Most employers don't care how you learned to do something; they just need to know that you can do it, when it needs to be done, while playing well with other. Note that a traditional degree from a main-stream university can open doors that might otherwise be closed, so that approach is well worth the cost and life experience, if you can do it. Getting an internship and doing the other related networking activities in your preferred occupation is a huge plus and sometimes a hard requirement, so be willing to work hard for little to no pay just to get in the door. Try to find a mentor and be willing to model your behavior after other successful people in the field. If all else fails, get a job and go to school part time!

You may also be thinking, "I'm not that smart and may not be able to graduate." If you can read this and understand the message, then you are smart enough! Graduating (like life) is mostly a function of showing up when you're supposed to and doing what is expected (without complaining). Try not to get behind; and if you do, get help and catch up. Go to a local community college, if you need to bush up on your grammar school lessons. You don't have to be a Brain Surgeon or a Rocket Scientist, just a college graduate.

I suffer from a mild form of Attention Deficit Disorder (ADD) and I am Dyslexic. I've found that regular moderate exercise, a good night's sleep, and proper nutrition (I also take a Multi-Vitamin with 1,200mg of Lecithin in the morning) gives me what I need to overcome this disorder and do well in school and in life.

As soon as you get a job, open a Roth IRA and make the maximum annual contributes. If you can save $10,000 per year and investment that money in something that can grow at an 8% compound rate, that $10,000 (or whatever you can save) will be worth 10 times as much ($100,000) after 30 years. That's the way the math works; and it's not that hard to do, if both you and your spouse each save $416.67 per month in your IRA. Looking back, Vanguard's S&P 500 Index Fund (symbol: VFINX) has returned a little better than a 10% compound growth rate. Note: There's no guarantee that it will do this in the future; but I think you can do even better than that, if you understand that the economy goes through boom and bust cycles, and that you can take advantage of that fact. When the economy is growing, simply invest most (70-90%) in Vanguard's Total Stock Market Index Fund (VTSMX) and put the balance in their Total Bond Market Index Fund (VBMFX); reverse this allocation when the economy is contracting. As a general rule, when expressions like "Will the Economy Every Recover?" hit the popular media, that's a good time to start moving your retirement capital into top-quality, low-cost stock funds; and when your Money Market fund is willing to pay you a decent rate of return (e.g., more than 3.5%) to hold cash and everyone is talking about buying stocks, that's a good time to book some of your capital gains in stocks and move that cash to bonds. If you can do this for 30 or 40 years, this account should meet your retirement needs.

If you want to retire early like me, invest a little time and money considering the words in the (audio) book Rich Dad Poor Dad by Robert Kiyosaki; and also check-out my paper on the Economy and Markets and my Retirement Plan.