What advice would an established financial advisor give to a high school student for future success?

I’m a high school student and I’m trying to learn more about the stock market and finance in general. What advice would an established financial advisor give me so that I have future success? What questions should I be asking and where should I be looking? 

Personal Finance
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January 2018

Rixse, Chad

Seattle, WA
63% of people found this answer helpful

Hi there, excellent question! I like where your mind is. Most high school students don't even consider this thought at all. I sure know I didn't! Here's my advice:

  • Stay out of debt! Debt can become such a massive burden and a real hindrance to building wealth. If you plan to go to college, make borrowing money the very last thing you do, not the first! If you get a credit card, set spending limits on it (many will actually allow you to enforce this on online banking) so you don't go spending more than you can afford to. Also, pay it off every month.
  • Start saving! The sooner the better! Start building an emergency cash fund that will cover 3-6 months of living expenses. You just never know when you might need something like this.
  • Start investing! If you are working and making money, start saving and investing in a Roth IRA or a brokerage account. Stick to low-cost, passively managed investment vehicles such as ETF's. Learn about asset allocation, diversification, and rebalancing. This will allow you to construct and manage your own portfolios.
  • Build a budget! Build a budget that is automated. People struggle with budgets like they struggle with diets - they'll adhere to them for a period of time until it just becomes too much to manage and they fall off the bandwagon. Instead, budget by setting a monthly savings goal outside of your known fixed expenses (rent, car payment, utilities, etc.), and make that transfer to savings automatic every month. Anything left over you can spend as you please.
  • Plan! Determine what your financial goals are for the near future and build a plan for how you'll get there and accomplish them. Then, track your progress along the way. Mint.com has some good tools for doing this.

If your parents have a financial advisor, perhaps see if you can sit in on a meeting with them or meet with their advisor one-on-one just to ask questions and maybe open an account and build a basic financial plan. There are tons and tons of resources out there so use them! Cheers :)

January 2018
January 2018