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THE OTHER DAY, WHILE walking to my mailbox, I noticed a summer class schedule for a private gifted youth academy lying on the ground. I assumed it belonged to one of my neighbors, who has elementary-aged children.
Their interest in extra academics didn’t surprise me. Many families move to this area because of its excellent schools. Parents here clearly value education. On any given day, it’s common to hear children practicing the piano or violin as you walk through the neighborhood.
I admire parents who encourage their children to excel in school. But as I looked over that schedule, I found myself wondering about the lessons that aren’t taught in a classroom. Coincidentally, another neighbor’s son had just graduated from college and was preparing to begin his career. If he were my son, what advice would I give him as he stepped into adulthood?
After some thought, I settled on five ideas.
Invest to Build Wealth. The most reliable way for ordinary people to build wealth is to become owners instead of just consumers. Buying shares of businesses allows you to participate in the growth of the global economy rather than relying solely on a paycheck.
The good news is that you don’t need much money to begin. What matters most is time. Starting early allows compounding to work its magic, with investment returns generating returns of their own over many years.
Be a Long-Term Investor. If I could offer only one piece of investing advice, it would be to keep things simple. Invest regularly in low-cost index funds and stay invested.
Trying to pick winning stocks or predict market swings is tempting, but history suggests that patience usually beats prediction.
I recently read a New York Times column by Jeff Sommer that made this point well. Long-term market returns are driven by a surprisingly small number of extraordinary companies. The problem, of course, is knowing in advance which companies those will be. Broad diversification through index funds allows investors to own tomorrow’s winners without having to guess who they are.
Even if you think you’re smart enough to spot those superstar companies, holding onto them for the long haul is a rollercoaster. They can be incredibly volatile.
I’ve learned that lesson firsthand.
A few years ago, my wife and I bought a small position in Nvidia (NVDA). It represented only a tiny fraction of our portfolio, but the stock’s wild price swings made us uncomfortable. We eventually sold our shares too early for about $112, and the last time I checked, it was trading at $204.
Do I regret selling? Not really. The vast majority of our stock holdings remain in Vanguard’s Total Stock Market Index Fund (VTI), which owns Nvidia along with thousands of other companies. That approach has allowed us to sleep well at night while still benefiting from the market’s long-term growth.
Cultivate Friendships. Money matters, but people matter even more.
Looking back, some of the biggest turning points in my life came because of friends.
One college friend, Chuck, helped me get my foot in the door at an aerospace company when I was a history graduate struggling to find work. That opportunity led to a rewarding career. Another friend, Steve, introduced me to the woman who became my wife. That single introduction changed the course of my life far more than any investment decision ever could. But those special bonds don’t happen by accident; they require making time for them despite a busy career.
Good friends encourage us, open doors we never expected, and help us through life’s inevitable setbacks. Those relationships are among the greatest investments anyone can make.
Give Every Job Your Best. I learned the value of hard work from my parents.
When I was growing up, my father routinely left for work before sunrise and often didn’t return until evening, six days a week. At the same time, he and my mother managed a 36-unit apartment building. My mother prepared dinner for our family before leaving for her own job each morning, returning home in the evening with just enough time to spend a few quiet hours with my father before doing it all again.
Watching them taught me that meaningful accomplishments usually require persistence more than brilliance.
There will be phases in your life when long hours are unavoidable. During those times, give your work your best effort. A reputation for reliability and diligence has a way of creating opportunities that talent alone cannot.
Protect Your Greatest Asset. For someone just beginning a career, the greatest financial asset isn’t an investment account. It’s the ability to earn a living.
Poor health can quietly undermine that ability. Regular exercise may not seem like a financial strategy, but it helps protect the income that makes every other financial goal possible.
I recently came across a quote from a doctor in the comment section of an article in The New York Times that captured this idea perfectly: “Exercise, by its effect on skeletal muscle, can in part preserve cognition, prevent depression, prevent cardiovascular disease, prevent diabetes, prevent some cancers, prevent osteoporosis, and preserve independence. And the list goes on. There isn’t a single pill on earth that delivers all of those benefits.”
Taking care of your health isn’t simply about living longer. It’s about preserving your independence and giving yourself the opportunity to enjoy the life you’ve worked so hard to build.
As I walked back from the mailbox, I hoped the child whose summer schedule I’d found would do well in every class. Academic success opens many doors.
But I also hope someone teaches lessons like these along the way. Years from now, I doubt anyone will remember a report card or a test score. They’ll remember the habits that shaped a life: investing patiently, working hard, nurturing friendships, and taking care of their health.
Those lessons may never appear on a syllabus, but they can make all the difference.
Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. Follow Dennis on X @DMFrie and check out his earlier articles
Dennis: A very thoughtful and meaningful article.
Having spent a lifetime in finance and much of the second half of my life in financial advising, I “second” your 5 suggestions.
Over the years, I have tried to provide advice to my children in matters like those you discussed in your article, and I have even sent them copies of certain books I feel belong in the financial library of every American adult… including JL Collins’ The Simple Path to Wealth and Morgan Housel’s book, The Psychology of Money.
As many parents have experienced, however, my efforts have not been “fully embraced.” Children often believe the experiences of their parents are not relevant today, or that what worked in our time won’t work in theirs. Just as often, however, they will come to realize, after years of doing things “their way,” that their parent’s advice was sound, and then they will come around.
My Daughter is 48, and my son is 42. I hope their “coming around” doesn’t take too much longer.
Mike,
I think many parents can relate to your experience. Sometimes the value of good financial advice only becomes clear with time. Here’s hoping your children come around sooner rather than later!
Nice article, Dennis. Thanks for sharing those lessons.
Some years back, I sent my kids to just such summer short courses (albeit at the local state university). One I was enthusiastic about was a class on how money works, and included a piece from the Federal Reserve Bank of Philadelphia on Benjamin Franklin and fiat currency. https://www.philadelphiafed.org/-/media/FRBP/Assets/Institutional/Education/Publications/benjamin-franklin-and-paper-money-economy.pdf, also https://fraser.stlouisfed.org/title/learning-resource-benjamin-franklin-birth-a-paper-money-economy-5959/booklet-benjamin-franklin-birth-a-paper-money-economy-579702
I enjoyed the class’s readings much more than the kids did. They preferred their cartooning and photography choices (a course on Latinate roots in language and a marketing course were other favorites.) Now I think I recognize why my suggested course choice fell short, when I recently re-listened to Jonathan’s 2023 interview on the Long View:
https://www.morningstar.com/podcasts/the-long-view/jonathan-clements-humility-is-hallmark-people-who-are-financially-successful
Among dozens of offhand gems among his comments, Jonathan describes a problem with well-meaning efforts to include personal financial education in high school curriculum. He felt the information would be coming too soon. Instead, he felt young adults needed “just in time” financial literacy. That is, a slow learning as we go along in life, especially prior to points where we are making important decisions that could have positive (or negative) long term impacts. As we sign student loan documents, or start a job, or buy a house. The lessons at those times are more likely to be “sticky”.
The striking point about your list is its slow learning nature. It takes a long time to “see” investments grow by compounding or buy-and-holding through market volatility. Same with the value of regular exercise (likewise routine visits to doctors and dentists). Cultivating friendships. Being a dependable worker and likable co-worker.
Human beings best learn slow and steady. Even though as a parent I wanted to provide my kids with all the tools they’d need to do well by age 18, it’s not possible. They have to get to work, start with the bumps and jostle of living the lives they are choosing. While some problems and troubles can’t be avoided, my kids can learn, slowly, to make the most of what they’ve got. Sure hope that’s good enough.
Catherine,
I really like your point about ‘just-in-time’ financial literacy. Some lessons only become meaningful when life gives us a reason to apply them.
In a former life, as an executive recruiter, I was interviewing an experienced security consultant (the ‘armed’ type) for a senior management role in a well-know corporation. He’d lived in NYC for most of his working years and had excellent, hands-on experience, but no degree. I asked about it and he said, “I’ve worked in the city for my career, and feel like I’ve earned a degree from UCLA, that’s the “Upper Corner of Lexington Ave”. I liked the answer, and while he didn’t get the job (really was too much ‘desk time’ for his background) it provided me excellent insight learning life-lessons.
Phil,
Great story. Real-world experience can teach lessons no classroom ever could.
Sage advice. Maybe I’ll forward this to my younger son, who begins a new job tomorrow!
Do you think he would read it? I find it difficult, if not impossible to pass on sound advice like this to my adult kids. Besides thinking they know everything, they just don’t want to seek/get advice from us who have already navigated careers and raising a family pretty well. Maybe some of your kids are different but mine just don’t want to listen (or ansk) other than maybe “which health plan should I take from this new job I’m starting “. Ugh 😩
Great article Dennis!
Dennis, lovely article as always. But I think there’s one more lesson you ought to add to your list.
Pause and appreciate.
Whatever achievements and good fortune come your way, do not forget to stop and savor them. Life is transitory. On your way to the future, remember to cherish the moment.
Mike,
Well said. Taking time to appreciate the present is such an important reminder.
Bravo. Wealth makes other goals easier to achieve, but having other goals no doubt can assist acquiring wealth. Surely nothing critical is linear.
Thank you Dennis,
Yes, we want to see our kids succeed in life. They learn most from their parents early on so it’s best if the parents know that.
Only one of my two sons graduated from High school but both are solidly set in good work and have good families. By applying themselves diligently to what ever job they are doing, for work or in family life, they are doing well! Praise the lord!
Donny,
So well said! Success looks different for everyone, and it sounds like your sons learned the value of hard work and dedication directly from you. You must be incredibly proud.
Oh Thanks Dennis, As I look back on my life, I realize I’ve been ever so fortunate in so many ways. Many things in life have happened to produce positive results, even if they started off in the negative.
Yes, knowing that I don’t have to worry about the boys is such a blessing. They are the best thing I have had happen!
Dennis great article, and your five ideas are the bullseye.
Thanks and keep writing.
Dennis: that is a great set of guidelines for anyone, particularly those entering “adulthood”. I will save this and share with my grandchildren!
Jeez, Dennis, you need to write a book along these lines. You nailed it. And many of the topics you mentioned link to happiness and contentment.
Dennis, thanks for a great distillation of the important lessons you’ve learned from seven decades in the school of life.
Do you ever try to engage a young person in a conversation that covers those topics? Like most HumbleDollar readers, I caught a vision of most of your list early enough to make a difference in my life, and I’m thankful for it. But many of us are so focused on immediate needs that we fail to consider what our older selves will think is most important.
Thanks again for another fine contribution. Great title, by the way.
Ed,
No, I haven’t had any meaningful conversations about these topics. But I hope these ideas find people early enough to make a difference, just as they did for many of us.
Dennis, as Jonathan always used to say, there are only a handful of truly important ideas in finance — we just keep retelling them in different words. Your article does that beautifully, and it goes a step further, weaving in wise advice on career, responsibilities, and relationships. Fitting, since those too can usually be boiled down to a few basic lessons.
Mark,
Thank you for the comment. I couldn’t agree more—many of the best lessons in finance and in life are remarkably simple, even if they’re not always easy to follow.