18 y.o asking reddit for financial advice (as you do)

[sonshine456]

18 y.o, studying cs, 10k in etfs, 5k in cash, working 20h/week as a waiter. All money is from previous part time jobs and side hustles during school. If you were in my position with all the knowledge you have now, what would you do?

For example: “spend your cash on x business idea” or “stfu you’re 18, enjoy your life”

 

[rechanba]

@sonshine456 When you get your first "serious" job ask payroll to put a couple extra % in super, you won't notice it's gone but you'll notice in 10 years

 

[sonshine456]

@rechanba Screenshoted for the future. Thankyou

 

[melinda3]

@rechanba Third-ing this advice, I recommend matching your employers contribution or more if you can afford it

 

[dobb]

@sonshine456 Yeah the latter

You've got a good savings habit it seems, but on the other hand you haven't started incurring many expenses yet.

Bro the secret to retiring with mllions of dollars worth of investments is to save and invest as much as you can over many, many years. That's all there is to it.

Don't be tempted to blow all of your money on consumerist junk. Waste some of it, but make sure you have money left over for investing.

 

[sonshine456]

@dobb I swear all my money is going into uni balls and other events, I should probably start saying no to things. Any guidelines on how much to save per wage for investing? Or do I just make up a number and stick with it?

 

[dobb]

@sonshine456 Save as much as you are willing to. At the end of the day it's all about the lifestyle you want.

If you're looking to bring your spending under control, the first best thing you can do is start tracking it. An app, Excel, whatever works for you. When you see how much you're dropping every month it's much easier to question whether you're using your money effectively.

 

[jennhickman06]

@sonshine456 There’s no such thing as wasting money on nights out when you’re studying. You will earn more first year out of uni than you will in the last 3 years of uni. Enjoy the life with the friends you make during your degree. Save what you can but you will only regret missing a night out because you want to save a little more.

 

[sonshine456]

@jennhickman06 Great advice, thankyou

 

[emma30]

@sonshine456 Dude. You're killing it. Most 18yo's (me included) were pissing their pay up the wall trying to impress people that weren't worth impressing. I'm not saying don't live life, but thinking about "future you" is an important consideration.

Even if you didn't invest another dollar for the next 50 years, and making the assumption that the markets will continue to average ~8% annual returns, you would have over 500k. Just imagine that amount if you invest $1000/month for 10-20yrs. Obviously tax, inflation will be considerations there, but it shows the power of time that's on your side having started so early!

If you keep doing what you're doing you will be in a really comfy position in 20-30yrs and you'll be able to live life on your own terms. People overcomplicate finance and investing, keep it simple and stay the course

 

[sonshine456]

@emma30 Damn if you put it like this it’s not that complicated ay? Thanks for the advice

 

[youremybeloved]

@sonshine456 Awesome that you are here! You're ahead.

Study & Save for now.

Travel far and wide in your early 20s. It'll compliment your degree so much.

 

[sonshine456]

@youremybeloved Best budget friendly trips?

 

[mikaedi881]

@sonshine456 Go where you want to go. And then find the cheapest way possible to get there.

 

[peacebwu2017]

@sonshine456 Can somone tell me what an eft is and why i hear people having money into it

 

[emma30]

@peacebwu2017 An ETF, stands for exchange traded fund - literally a fund that's traded on an exchange - and in most cases people are referring to index funds. If you've ever heard of the S&P500 or the ASX200 on the news, that's what those are - indexes!

Index fund ETFs aim to replicate the performance of the wider market, which over time has been ~7% in Aus I think. There's also other, more specific, ETFs (like sector-specific) but they usually have higher management fees and aren't as diversified as broad market index funds.

 

[acb]

@sonshine456 I don't know how mechanically minded you are or if you have the space but a guy I used to know would buy kit cars and assemble them and sell at a profit. I'm pretty sure it was a labour of love but they would get snapped up.

I think the brand was Birkin I'm not sure of the market and viability now but it might be worth looking into.

 

[sonshine456]

@acb Super into cars but I think I’d struggle to find the time to work on anything aside from my personal ride

 

[artgirl101]

@sonshine456 Just keep that money in ETFs etc and don't feel the pressure from dodgy finfluencers to try to "create passive income". All that stuffs bullshit, just leaving that money in something with moderate gains ends up compounding like crazy if you just leave it alone.

My one regret from that stage of my career is not understanding the value in reading the business books I only read when i was in more senior positions. If you don't like reading audiobooks while commuting or doing housework is how I read most of mine. Literally reading 3-4 books will put you so far ahead of your peers

Top recommends:
The Lean Startup
Diary of a CEO

Even if you never want to run your own business they'll teach you a lot about creative problem solving.

 

[sonshine456]

@artgirl101 Thanks for the recommendation, I’ll check it out