A teen who foregoes spending $15 dollars on another music CD and instead invests the sum could end up with $42.50 in ten years. The authors introduce teenagers to the concept of opportunity cost. That said, a teen must have money to make money. The book shows, in an easy-to-read chart, how $100 might turn into $400 in ten years, assuming an 11 percent rate of annual return.
To take advantage of compounding, a teen has to be willing to sock away a chunk of change regularly and then leave it there to accrue interest. Within the first 20 pages of the book, the authors demonstrate through anecdotes and charts the "millionaire-making magic of compounding" annual growth, particularly in the stock and bond markets. It means being able to buy a great mountain bike…" Not only does financial independence mean that "you can provide for yourself and those you love," according to the authors, but it means "being able to fly off to wander the coves and beaches of the Bay of Islands in New Zealand. The book's authors, all of whom are in their thirties, rather shrewdly hook their readers in by first appealing to their material desires as well as their need for financial independence. The 243-page book explains, in straightforward teen-speak, everything from bank accounts to single-stock equities, bonds, mutual funds, index funds, certificates of deposit and retirement accounts. There are also a host of low-fee mutual funds targeted at the young investors that, along with the authors' favored index funds, offer relatively hassle-free, long-term growth prospects. There has rarely been a better time to be or to have a teenage investor: Stock prices are at their lowest in years.Īs the book describes, there is a growing array of educational Individual Retirement Accounts available to teens and their parents as well as adult-oriented retirement funds such as a Roth IRA that a teen could take advantage of in youth.
When it comes to investing, as the authors aptly state, "The more years you have, the better." If there is one thing a teen has, other than angst, it is time. Selena Maranjian is a senior writer at The Motley Fool. It has since grown to include a popular online site, as well as a host of best-selling investment guides.
The co-authors, Tom and David Gardner, who are brothers, founded the Motley Fool, an investment information service based in Alexandria, Virginia, in 1993.
0 kommentar(er)
