My 17-year-old Sister Has Begun Thinking About Retirement. Have you?

Feb 15, 2015 by

          At the end of January, I brought my now 17-year-old little sister to a personal finance seminar presented by a new friend of mine, who is also my new/first Financial Chick (because that’s a way cooler title than “Financial Advisor”). My goal in bringing my sister was to have her see the value in beginning to save for retirement early. I wanted her to understand why, due to compounding, investing increments as small as $25 per pay starting in her teens, as opposed to waiting until she has more money available to save in her twenties, could make tens of thousands of dollars difference in her account balance come retirement. Because she needed some clarification on both the Rule of 72 and mutual funds after the presentation, when we got home that night, I directed her to a brief section on the Rule of 72 in David Chilton’s The Wealthy Barber Returns (which I’ve recently found out was sponsored by a bank, so please keep that in mind if considering the book’s product recommendations), which she read while I went scouring my parents’ book stash for the original. When I found it, I marked the chapter discussing mutual fund investments and dollar-cost averaging in The Wealthy Barber (which was self-published by David) for her to read later.

          So, on Friday, after taking her to get a social insurance number (because I found out last week that she didn’t have one, and she obviously needs one to get a job), when she told me that she wants to start saving for retirement when she starts working (she and I have a job-searching date tomorrow to get her started), I almost cried tears of pride! Then, as if I wasn’t already holding my heart and oh-my-God-ing, she also told me that she wants to spread her savings across different accounts. I thought I was going to melt into the seat of my car. That’s how I organize my money! She began listing off her future accounts: one for retirement, one for California (she and her friends want to take a trip there after they graduate high school), one for emergencies –

          “You want an emergency fund?” I interrupted, nearly dying of pride by this point.

          “Yeah, because I was thinking, what if I get towed? I need to have money to pay for that,” she said.

          I had just been chatting with her a couple weeks before about why, when I start working again, an emergency fund will be my first savings priority, after setting up a preauthorized payment plan to my new investment account. (I just moved all of my retirement savings into an aggressive growth portfolio offered outside of the bank. My Financial Chick brought it to my attention that the mutual funds I was previously invested in at the bank, though performing well, were not aggressively investing my money, and I want to invest aggressively at this stage in my life. Being 25, I won’t be using this money for at least another 30 years, and I want to take advantage of market fluctuations using dollar-cost averaging while I’m far enough away from retirement that the economy has time to recover from future recessions before it comes time for me to begin withdrawing.) I used my car getting towed as an example, saying that it’s a good thing I had the money to pay for it despite being unemployed, because some people don’t have the money to cover unexpected costs even when they are employed. I also talked about how I’ve run into enough unexpected financial circumstances in the past year, including my annual car insurance premium going up over a grand when I moved and the crash of 2014, to make me more highly value emergency money. Hence why, when she – who, let me reiterate, is 17 – told me that she wants to have an emergency fund, I almost passed out from flattery in realizing how much attention she pays to the way I manage my finances, and that she plans on emulating it.

          “When you get a job, come to me with your first paycheque. If you start saving right from your first pay, you won’t even miss the money you’re putting away, because you’ll never have had it to spend in the first place. I’ll help you plan how you want to allocate your income so that you’re saving for everything you want to be saving for, you have enough money for California by the end of high school, and you also have some money to spend,” I told her excitedly (I love budgeting!) before adding that I’ll take her to meet my Financial Chick again for personal investment advice.

          “Of course I’m coming to you!” she said. “Who else would I go to?”


          “Yeah, let’s be real,” I laughed, “I’m definitely the financial guru in the family.”

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