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Yahoo
11-05-2025
- Business
- Yahoo
Ramit Sethi Offers a Harsh Truth About Saving Money — And What To Do Instead
Ramit Sethi is a well known money guru who isn't afraid to speak his mind. He is the bestselling author of the book 'I Will Teach You to Be Rich,' as well as the host of the Netflix series 'How to Get Rich.' Read Next: Find Out: In a recent newsletter, Sethi shared the biggest mistake people make when it comes to their money: letting money sit in a checking account. Instead, Sethi explained, it's important for people to invest their money. He's not wrong: According to data from Charles Schwab's 2024 Modern Wealth Survey, 58% of Americans have investments. While that's a majority of the population, there is still a large percentage who don't. There are many reasons why people decide not to invest. Primarily, in order to invest, people need to have extra money to allocate to investing — and not everyone has access to a job that automatically invests their money into a retirement account to make investing easier. A quarter of people currently live paycheck-to-paycheck, according to 2024 research from the Bank of America Institute. With the prices of everyday goods increasing, it can be hard for people to prioritize investing when they're trying to afford groceries. Another reason is that some people distrust the stock market and prefer to keep their cash on hand rather than risk losing it. However, Sethi explained to his followers that investing is how people become financially free. Because of inflation, the value of cash sitting in a checking account will erode over time, whereas with investing, money has the potential to grow and outpace inflation. For You: Sethi recommended that people invest in target date funds or index funds, not hot stock picks. He explained that investing involves a long-term strategy, and that target date funds take much of the guesswork out. With these funds, people can choose the year they plan to retire, and the fund will automatically adjust to become more conservative as that year approaches. Sethi also praised index funds, which are funds that mimic a particular index, like the S&P 500. With an index fund, investors purchase a portfolio of stocks or bonds. That way, it's naturally diversified. If one company doesn't perform well, the fund still has several others to balance out the performance. Index funds also have lower expenses and fees, which can help investors to keep more of their money. Ultimately, Sethi's goal is to encourage his followers to invest, even if they place money in a high-yield savings account to start. He stressed that real wealth can't be built by putting money in a checking account and encouraged his readers to learn more about building wealth through investing. More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying How Far $750K Plus Social Security Goes in Retirement in Every US Region 4 Things You Should Do if You Want To Retire Early 12 SUVs With the Most Reliable Engines Sources Charles Schwab, '2024 Schwab Modern Wealth Survey Shows Increasing Financial Confidence From Generation to Generation and Younger Americans Investing at an Earlier Age.' Bank of America Institute, 'Paycheck to paycheck: what, who, where, why?' This article originally appeared on Ramit Sethi Offers a Harsh Truth About Saving Money — And What To Do Instead
New York Post
24-04-2025
- Business
- New York Post
Meet the teenagers investing their after-school job money in the stock market — and winning big
The market might be turbulent, but these Zoomers are in for the long haul. More and more young people are getting into the market earlier, with help from social media, artificial intelligence and, yes, their parents via custodial accounts. According to the Charles Schwab Modern Wealth Survey of 2024, the average Gen Z investor got into the market at just 19 years old — compared with 25 for Millennials, 32 for Gen X and 35 for Boomers. But experts warn that some Zoomers, sucked in by influencers and promises to get-rich-quick on TikTok and Instagram, are investing in sketchy crypto coins and meme stocks without doing their research. 'If you're a young investor and you have $100 or $500 or $1000 that you don't care what happens to, go ahead and buy cryptocurrency and close your eyes and see what happens, but [my advice is] never buy anything you can't reach out and touch,' said Brian Belski, Chief Investment Strategist of BMO Capital Markets. His suggestion to young investors: 'Buy things that you know, whether it's Lulu Lemon or Netflix or Alphabet. Always invest in things that you're using.' The Post spoke to five precocious and well-researched investors about their experiences: Ryan Sorrell: 'I use ChatGPT to help me invest' 11 Ryan Sorrell, 15, first invested in Bitcoin at age 8. Ryan Sorrell Ryan Sorrell was only 8 years old when he made his first investment in Bitcoin, after his dad taught him about crypto. 'I understood part of it, but I ultimately did more research,' Sorrell, now 15, told The Post. Now that he has his own money from bussing tables at a retirement home, he's doubling down. For the past year, the teen has put his entire paycheck — about $800 a month during the summer — into the market on CashApp. He's mostly invested in Bitcoin and MicroStrategy. 11 Ryan's father, Joel, taught him about Bitcoin and how to invest in the stock market. Ryan Sorrell 'This summer I want to make as much money as I can to invest, and I want to set myself up with a portfolio that pays high dividends so I can keep reinvesting in the future,' Sorrell said. So far, the 15-year-old has $6,000 in Bitcoin, $3,500 of which is profit. He has made another $337 in the stock market. He spends about an hour each day researching the market, teaching himself primarily with AI tools like ChatGPT. 'It helps me a lot to just run through scenarios, to see where I'd be if I did that in, like, 10 years' time,' he said. 'You can just ask whatever you want and quickly deepen your understanding.' 11 Ryan Sorrell uses ChatGPT and AI tools to learn about the stock market. Courtesy of Ryan Sorrell Sorrell says investing early has changed his relationship to money. 'I'm more disciplined with how I spend my money because I'm putting it in the market and making a return instead of just losing it for, like, a pair of shoes or something,' he said. 'It's really helped me focus on my future and what I want to do with my life.' Sophia Castiblanco: 'Girls need to be encouraged to get into the market' Sophia Castiblanco began investing at age 14 when she started making money from her toy review channel on YouTube. 11 Sophia Castiblanco started investing at age 14 when her YouTube channel became profitable. Sophia Castiblanco 'It was my parents who first encouraged me to get into investing because they were worried that, making such a large amount of money at a young age, I might spend it all on shopping or hanging out with my friends,' said Castiblanco, now 18 and a freshman in college. (She declined to name her school for privacy concerns.) After a couple months of research and some help from her dad, the Bloomington, Illinois, native invested in Vanguard and Berkshire Hathaway and some of her favorite companies, like Tesla, Apple and Amazon. At first, she was putting in $300 a month. Now, as she rakes in money as lifestyle content creator on Instagram and TikTok, she's putting in $3,000. Her most recent big investment was Nvidia, and she hopes her profits can help her buy an investment real estate property in the next year for passive rental income. 11 At age 18, Castiblanco puts $3,000 a month into the stock market. Sophia Castiblanco Over the past month, as the market was rocked by tariffs and her returns were cut from 38% to 10%, she poured even more money in: 'I think it's a great time to put money into the market. I feel like it's a really good opportunity.' Castiblanco also wishes more young people would brush up on their financial knowledge. 'I wish more of Gen Z, especially girls, would get into investing,' she told The Post. 'It would be so beneficial if schools had a finance class at a young age so that students actually develop some more financial literacy.' Perrin Myerson: 'I invested money from working at Taco Bell' Perrin Myerson became interested in investing at age 14, when he learned about the WallStreetBets community on Reddit. 11 Perrin Myerson started investing with his income from his after-school job at Taco Bell. Pete Thompson 'I thought they were morons, but they also seemed kind of funny,' said Myerson, now a 22-year-old senior studying computer science at Duke. The Seattle native opened up a practice account as a ninth-grader, with the help of his father. 'My dad was pretty instrumental,' Myerson said. 'He didn't really trade, but I was interested in it and he was really nice and validating.' 11 Perrin Myerson invests in Palantir and has put in well over six figures of his own money. Pete Thompson He started investing more when he got his first job at age 16 — buying Microsoft and Amazon stocks, and he was 'like crazy early' on software company Palantir. 'I didn't have a ton of money growing up, so I was working at Taco Bell, and almost all my paychecks I was just throwing straight into RobinHood,' Myerson recalled. While working in fast food, Myerson launched his own startup, creating a dynamic pricing software for restaurants. 11 Myerson is now a Duke undergrad and already has his own startup. Pete Thompson He's poured profits from his startup — 'well over six figures' — in the market and made a 51% return over the past year. 'Too many people my age are looking for get-rich-quick schemes [like drop shipping retail schemes], and it's really easy to sell those on TikTok, Instagram and X,' he said. Isaiah Jones: 'Trading was nerdy at first, but now it's mainstream' When high school junior Isaiah Jones started trading last year, it was considered 'nerdy' by his classmates — but, now, the Richmond, Virginia teen says it's totally mainstream. 11 Isaiah Jones says trading has become totally mainstream at his school. Courtesy of Isaiah Jones 'I've noticed this year trading has gotten a lot bigger,' he told The Post. 'Like, I'm walking down the street and I see people looking at their crypto wallets.' The 16-year-old started trading because some friends were. His dad helped him open a Robinhood custodial account to invest money made from lawn mowing and painting houses over the summer. Jones owns shares of Apple and Nvidia and invested in Palantir, now valued at $94, when it was just $27 a share. He reads newspaper business sections every day and also uses X to research the market. He's contemplating investing in real estate development company Howard Hughes Holdings because he's 'sometimes a fan of Bill Ackman,' whose hedge fund bought a big position in them. 11 Jones has made a large percentage return on Palantir stock. Courtesy of Isaiah Jones 11 Isaiah Jones is interested in meme coins, including Brett coin, symbolized by a blue cartoon character. But overall, Jones found crypto is much easier to access as a teen. His favorite cryptocurrency is Ethereum, and his biggest profit is from Solana. Jones is also a fan of meme coins like Brett. He's put $300 into crypto and now has $837. 'When you're trading stocks under 18, you have to do everything with your parents' permission, which is kind of hard, but crypto is so unregulated that I've been able to trade on my own,' he said. 'I trade a lot more in crypto just because I've made more money in that.'
New York Times
10-04-2025
- Business
- New York Times
Worried About Stock Market Swings? These Young Investors Aren't.
A haunting childhood moment defined how John Kakuk would think about investing his own money when the time came. During the 2008 financial crisis, his mother asked him if he would be willing to contribute the meager savings in his piggy bank to his family's grocery fund should his father, a lawyer, lose his job. 'She was very anxious,' Mr. Kakuk, then 12, remembered. His family averted disaster. 'As far as I know, we didn't miss a mortgage payment, we didn't get a car repossessed, nothing like that,' recalled Mr. Kakuk, 28, who runs Bridger Digital, a marketing firm. But the rattling experience steeled the Montana native against the tumult caused last week by President Trump's announcement of steep global tariffs. In response, markets plunged, but Mr. Kakuk, who described himself as 'notably invested,' said he felt little alarm about his portfolio, even if it took a few short-term body blows. On Wednesday, Mr. Trump announced that he would pause the tariffs for most countries for 90 days, and the S&P 500 swung in the other direction for its biggest daily gain since 2008. 'People my age are in a very different position from our parents when they were our age,' Mr. Kakuk said. 'We don't have a lot to lose. We just have everything to gain.' Interviews with young investors — ranging from high school students to entrepreneurs in their late 20s — aligned on a variation of that theme. Helped in part by digital platforms with low bars to entry and enticed by the promise of cryptocurrency, members of Gen Z began investing at 19 — six years before the average millennial and 16 years before the typical baby boomer, according to last year's Modern Wealth Survey from Charles Schwab. These younger investors said they were willing to countenance risk — but also to hew to a keep-calm-and-carry-on investing philosophy as the market swung wildly. If anything, the plummeting prices led to discounts unavailable during the years when stock markets were on a relentless climb. 'We've become accustomed to instability in a way that older generations are not,' said Alex Tucker, a senior at the School Without Walls in Washington, D.C., who opened a Vanguard account a couple of years ago but began actively investing only late last year. Though he was just a toddler during the 2008 crisis, Mr. Tucker believes the lessons of that crash suffuse his generation's financial outlook. 'I guess the Great Recession showed that Greenspan can be wrong,' he said, referring to the former Federal Reserve chair Alan Greenspan, widely faulted for facilitating the conditions that led to the mortgage meltdown. 'The markets were wrong. The banks were wrong. The entire system can be rotten — and there is a way to go on. There's a way to make money off of it.' Mr. Tucker turned 18 on April 2, which the White House had framed as 'Liberation Day' from a global trade arrangement unfair to American workers and consumers. Since then, he has become a little wealthier, having purchased put options on Tesla stock, correctly predicting that the association of the carmaker's chief executive, Elon Musk, with the Trump administration would cause a sell-off. For guidance these days, Mr. Tucker is following Michael J. Burry, the Cassandra-like investor made famous in Michael Lewis's book 'The Big Short,' and Kyla Scanlon, a 27-year-old who writes and makes videos about investing and has nearly a quarter-million followers on TikTok. Ms. Scanlon advised a cautious approach known as 'risk-off' while much of the world grappled with the implications of Mr. Trump's protean tariffs plan. She pointed to gold as one potential source of security. 'I think any investor should have a teeny bit of allocation to gold just to have that hedge,' she said. TikTok is rife with videos about investing in gold, among a flood of advice on how to withstand the turmoil. Just as smartphone-based trading platforms like Robinhood, launched a decade ago, have empowered casual investors, the rise of social media has created an ecosystem of influencers who speak fluently to younger audiences. 'It really is about following people and ideas and narratives,' said Steven Wang, who dropped out of Harvard to start Dub, a platform that allows users to mimic the trades of influential investors. No longer is the Bloomberg terminal, once a Wall Street must-have, the avatar it was to investors of previous generations. 'Younger folks are no longer sitting by screens and just looking at price-earnings ratios,' Mr. Wang said. While some of the online expertise is dubious (and difficult to identify as such), some advice is savvy and expertly tailored to contemporary sensibilities. A two-minute TikTok video by Derrick Fung, an entrepreneur, about 'buying the dip'— investing in the market as prices fall — has more than 750,000 views. The accompanying comments include discussion of retaliatory tariffs, inelastic markets and, well, price-earnings ratios. Young investors have the luxury of time, and stock markets tend to reward patience. 'A fluctuation of around like 5 to 10 percent — I can most likely weather that in the long run,' said Isaac Chan, 16, a student at the Edison Academy Magnet School in Edison, N.J., and a member of the Young Investors Society. He started investing while learning remotely during the coronavirus pandemic, which left him with plenty of time for other pursuits. To learn the basics, Mr. Chan said, he read Investopedia and followed the advice of Warren E. Buffett and Charles T. Munger. Now, sailing through his first serious storm, he is able to maintain an old hand's equanimity. 'What really worries me isn't necessarily my own portfolio. It's my parents,' Mr. Chan said. 'They don't have that luxury of waiting out a downturn. For them, this is their retirement security being redrawn in real time.' 'I get excited when I see these kinds of market dips,' said Chris Josephs, 29, a co-founder of a trading platform called Autopilot. He added that while he was certainly not cheering for a recession, the recent market tumble had allowed for discounts on blue-chip stocks like Apple and Nike. 'If these stocks go down 40 percent, that just means I get a 40 percent better price,' he said. Other young investors are making moves to insulate against future shocks. 'I don't think my investing goals themselves — saving up money for retirement, preserving wealth in an unsteady economy — have changed as a result of the tariffs,' said Christiana Sung, 17, a student at Mt. Everest Academy in San Diego and, like Mr. Chan, a member of the Young Investors Society. (She learned to trade from its tutorials, she said.) Also like Mr. Chan, she started trading in the summer of 2020, as the stock market recovered vigorously from the shock of pandemic lockdowns. 'I've certainly had to rethink my way of achieving those goals,' Ms. Sung said. 'I used to favor international companies before, but now I'm more cautious of those tariff-vulnerable sectors and have begun to look more at domestic opportunities.' Ms. Scanlon believes that now may be the time for 'some international exposure,' as the American economy undergoes a transformation under Mr. Trump's unpredictable dictates. 'Uncertainty is expensive,' she said, pointing to the relative safety of Germany's industrial and defense sectors. Overall, European stocks have enjoyed a recent surge in popularity, seemingly thanks to Mr. Trump. The tariffs have also raised the prospects of a decline in the American economy. 'I have some stock but nothing super fancy,' said Abdullah Hassan, 30, a White House spokesman under President Joseph R. Biden Jr. who is set to graduate from Georgetown's law school next year. Mr. Hassan said he and his peers were more concerned about an 'impending recession' and finding jobs.
