100 Grand Bar

I wrote on this blog earlier this year that I had the opportunity to talk personal finance and FIRE with a college student who seems receptive to the knowledge. Because if I know anything, it’s that college students live to talk personal finance. It’s been fun. 

I now have a second student (let’s call him T-bone, because why not). He’s a recent college grad, is bright, and has a sound—and seemingly quite achievable—idea of what he wants to be when he grows up. That’s no small thing. I know that firsthand. Because I kinda didn’t. 

Lessons plan

T-bone’s got lotsa time on his side from a wealth-building perspective. And he knows it. That’s also no small thing. I know that firsthand. Because I completely kinda didn’t know aaannnything much about investing when I was his age. 

I was excited when I discovered that T-bone might be interested in being schooled. But where to start? 

Given that we work together, I started with employer-sponsored retirement accounts. He grasped the information pretty well. But—understandably given his young age and inexperience—it seemed like he only understood personal finance as a whole a tiny bit. So, I invited him to join me later for a more in-depth one-on-one discussion.

We recently had said one-on-one. T-bone wasn’t shy about asking questions and was genuinely interested in this stuff, but we basically just touched the tip of the iceberg.

In the course of things, I mentioned the famous Charlie Munger quote about investing, “The First $100,000 is a &!+(#.” I also advised T-bone that—given his young age and the fact that equities and bonds are far off their all-time highs—he should try to invest to the point that it hurts at this point. 

T-bone understood the rationale and agreed with it. He took in the information eagerly and politely. 

But in the course of our discussion, T-bone revealed a few things. First, he’s had trouble finding a gig in his desired career field. Second, he’s working a few jobs to make ends meet, but one of his gigs recently ended. And, last, while T-bone’s non-rent living expenses are standing-ovation-worthily low, his rent is . . . uuummm . . . not. It’s high. Way too high for him.

I gave T-bone many suggestions about how to address his housing expenses and income issues. He was appreciative and is eager to start tackling these challenges. 

I’ve got a bad feeling about this

I also recently read a blog post written by a blogger who I very much respect and who FIREd a few years ago with a seven-figure net worth. The blogger mentioned the quite understandable—if somewhat unexpected—sense of financial security he now feels as a result of having reached FI. I’ve found this story/conclusion to be common and understandable in the FIRE community. 

But on reading the blog post, I felt a feeling that I’ve long had, but never honestly owned up to. 

Even if not necessarily explicitly, those relating these stories often casually throw around references to six- or seven-figure net worths. And not only preach the Good Word about saving and investing but saving and investing as much as possible (and preferably a large percentage of one’s income).

All sound advice. But as someone just starting out his or her career (or, in the case of my first student, not even there yet), these references and the advice surely grate. They darn sure would have for me were I in their shoes. 

That’s not to take anything away from the wisdom of the advice and illustrative stories. Just that I know that were these references and the advice given to me before I gained positive financial traction (something that didn’t happen until well into my 30s), I’d have appreciated them f’sho, but quietly mumbled under my breath that the teacher just didn’t “get” the difficulty of my financial straits and how difficult acting on the advice would be. The idea of having a net worth of even $100,000 would have seemed laughably fanciful. And a net worth of several hundreds of thousands of dollars? Or $1 million? Or several million dollars? Surely you must be joking, ‘teach. I might’ve actually stopped listening had someone suggested that I could achieve that.

Safety in numbers

This (re-)realization embarrassed and humbled me. Embarrassed because how could I of all people forget those painful feelings and years days where saving anything was difficult and, also, not realize that T-bone was in that same weak financial position. And humbled because I could tell that T-bone genuinely wants to improve his situation and is enthusiastic about learning and dramatically improving his position but sensed that, regardless of my good intentions, I was out of touch. And he graciously said nothing about that. 

I felt small because of my insensitivity. Even if it was unintentional.

I’ll probably provide inadvertently insensitive advice to T-bone in the future. Heck, I’d bet money on it. But I’m going to approach these teaching sessions with a lot more awareness and sensitivity to hopefully minimize the chances. 

That doesn’t mean that I won’t mention (seemingly impossibly big) numbers. Rather that I’ll do so with more context and mentions that I was once—and long—in the same shoes as my student. And so, consequently, I get it. I’ll also definitely ask my students to slap me upside the head let me know if and when I’m evidencing any cluelessness. 

I also still want to mention (big) numbers because I think doing so is helpful for a few reasons. First, to demonstrate that while they might seem wildly unachievable, at least to a (currently) unknowable point they can absolutely be achievable. I think it’s important that that point get across and sink in. Goals are achievable or, at the very least, worth setting. Also, in part because of their notable size, I think these numbers better help provide inspirational demonstrations of the wonders of compounding. And last, tho I don’t give away my own numbers, I want to show that I—who once and long was in their shoes (and maybe in even worse shape)—empathize with them and was able to hit milestones that seemed impossible to me. So, there’s hope that they can, too.

And in the end . . . 

For the most part, I’m not gonna push big numbers to kids I talk to. Well, maybe except for this big number. Because I’m pretty sure it’ll go over quite well.