But even if the markets were roaring you'd have a hard time persuading young adults to get started. Their view is that they have lots of time and little money, and it's all way too confusing anyway. They're more concerned with getting their career going.
These are familiar obstacles for anyone who was once young and starting out in life, and is now older and wishes they had saved more -- which is to say, just about everyone over 50.
What young people need to understand is that from periods of low returns spring periods of high returns; they don't have as much time as they think because only over very long periods is the stock market a certain winner; and no matter how little they have to invest, the power of compounding over four decades will turn that seeming pittance into a sizable sum.
If only we could get through to them.
Maybe we can. I've been writing about money and investing for 25 years, and in that time have come across only a handful of advice books that make complex financial subjects easy to digest and truly useful. Two of them are particularly well suited for young people:
Â· The Wealthy Barber This book by David Chilton has been around for a dozen years and is a super-easy read. In about 200 pages the book cleverly explains the essentials of wills, insurance, home ownership, saving and investing, and other nuts and bolts money stuff through the eyes of a small-town barber who has saved his way to wealth and become a mentor to a group of inquisitive kids. It's a joy.
Â· The Investment Answer This book by Daniel Goldie and Gordon Murray has just been released. It's only 66 pages and is concerned solely with investing. The book sticks to basics and is wonderfully simple in its explanations. I read it in an hour.
In my next post, I'll get into some of the lessons and inspiration in Investment Answer. For now I'd like to focus on the back-story: Wall Street veteran and co-author Murray suffers from brain cancer. In June 2010 he was given six months to live and quickly decided he wanted to leave something valuable behind; that being the synthesized investment wisdom he had learned from his many years at Goldman Sachs and other Goliaths of finance.
The authors' goal was to make investing approachable so that young folks might get started early and know enough to avoid traps like paying high commissions and fees, holding too much company stock and trying to time the stock market.
This is stuff that a lot of us already know. But the book makes for a nice, concise reminder and for many young people it would be a great primer that should convince them they have what it takes to invest confidently for their future -- starting now.
Either, or both, of these books would make excellent gifts for students close to finishing college or others recently beginning their career.
If you have a question about kids and money, I'll find the answer. Email me at email@example.com.
Photo courtesy of Daniel Goldie and Gordon Murray