I’m a little worried about my son, David.
He’s a great kid. And I love the fact that he’s loyal, dependable, and respectful.
But as a young adult, he’s struggling to figure out what path he wants to start out on. While I want to help him succeed, I’m having a hard time coming up with ideas that he can get excited about pursuing.
Earlier this week, I told you about my trip to Utah to visit my friend John, who’s an amazingly successful entrepreneur and small business owner.
As we talked about our kids and how we can help them succeed, John shared an idea with me that I’m excited to discuss with my son.
And John’s advice also applies directly to one question I get often from our Rich Retirement Letter family.
So today, I want to share John’s words of wisdom. And I’d love to know if they’re helpful for you and your retirement!
RELATED: My Conversation With a Rich Retiree
Big Opportunities Start With Small Steps
“I’d love to get your perspective on this,” I said to John as we watched dusk fall on the valley below.
“David is a loyal and hard-working young man. But he just hasn’t figured out the direction that he wants to go. I’ve talked with him about possibly buying a franchise or small business and helping him learn to run it. That way, he could take ownership of something he’s excited about and learn about the different parts of managing a business.
“Of course, I don’t have a ton of free time to manage a business by myself. But if David did most of the hard work and I provided some capital and leadership, maybe we could learn together and make something like this work!”
John sat back in his rocker and thought for a minute. Then he looked over at me and asked, “Can I give you my honest opinion?”
I definitely wanted John’s opinion.
I respect his business experience and the success that he’s had starting companies — that’s why I asked him!
“Quite frankly I think it’s a terrible idea.”
It wasn’t the response I expected, but I appreciated the candor!
He went on to tell me that if I bought a franchise, put David in a leadership position, and tried to teach him how to run a business, it would be frustrating for both of us.
David doesn’t have any experience managing people, organizing a company budget, or making strategic decisions.
He’s certainly capable of developing those skills in time. But right now, it wouldn’t be fair to throw him into the deep end and expect him to succeed right off the bat.
“Instead of jumping into a new business right now, I’d challenge David to shoot for a leadership position at the small company where he’s working now. He could talk to his boss and ask how he could work his way toward taking more responsibility — or move to another company that would have that type of advancement opportunity.
“Then after he gets some experience, the two of you can talk about how you might want to go into business together.”
I was thankful for John’s advice. If I had moved forward and pushed David into a position he wasn’t ready for, it could have been hard on both of us.
But starting with small steps is a great way to develop experience and skills, which David and I can both use later down the road.
Now, here’s how that applies to your Rich Retirement…
Get Started Investing Without Jumping Into the Deep End
I can’t tell you how many people email me telling me that they want to manage their retirement wealth, but they just don’t know how to get started.
And many of these retirees and future retirees are worried they’ll make a costly mistake.
Maybe you find yourself in that same situation.
You don’t necessarily trust Wall Street advisors and you know that you can’t just park your retirement savings in a bank account.
But you’re not sure that you’ve got the chops to invest your retirement wealth all alone.
Just like it’s not fair to expect David to know how to manage a business right away, it’s not fair to expect you to instantly be comfortable managing all of your retirement investments.
But that doesn’t mean you can’t start building those skills!
Here’s an approach that might work well for you, helping you to gain confidence and competence when it comes to managing your retirement finances.
If you have a retirement account, consider managing just 10-20% by yourself to start with.
For savings in a 401(k) or IRA account, you can usually contact your broker and get a sub-account set aside for you to invest yourself.
And if your savings is with another manager or in a mutual fund, you could simply take a 20% withdrawal and put that money into a brokerage account.
From there, I’d recommend starting with dividend stocks that pay reliable income — the kind of plays that we talk about in Lifetime Income Report.
These are some of the most stable companies that you can invest in, and they pay quarterly dividends that will help grow your wealth over time.
By researching which dividend stocks you want to own and watching your payments come in, you’ll become more comfortable with the process.
You’ll also see how these stocks fluctuate and gain knowledge from the experience!
As time goes on, your success and your experience will give you the confidence to take more ownership of your retirement.
And eventually, you can start looking at more speculative plays for a smaller portion of your wealth, helping to accelerate your gains from more sophisticated plays.
Even if you don’t have savings set aside yet, you can still start small and gain experience.
You can begin researching stocks you would have purchased if you had the money and track how your investments would have done.
Thankfully, with new apps like Robinhood and other low-cost investment options, you can set aside even a small amount of money to start investing!
The key to getting starting isn’t to make a ton of money. It’s to gain a ton of knowledge.
And over time, that knowledge will lead to success in the markets and in living your Rich Retirement.
Of course, here at Rich Retirement Letter, we’ll give you plenty of ideas for the journey ahead. So you’ll never actually be on your own in the deep end trying to figure out how to do this.
I’m excited about the business project I’ll eventually work on with my son David.
And I’m also excited to hear from you as you take the first steps toward managing your retirement investments.