I read an important news story the other day at one of my favorite news sites: www.theonion.com. The headline read: "Our high schools may not adequately prepare dropouts for unemployment."
The Onion story went on to make some important points:
Labor Secretary Elaine Chao explained that schools routinely fail to impart dropouts with the critical lying- and sitting-around skills they need to thrive in today's jobless market. "Our public high schools place too much focus on preparing kids for professional careers," Chao said. "This waste of resources leaves our dropouts, the majority of whom have no chance of ever finding a job, wholly unprepared to sleep till 1 p.m., or watch daytime television while eating ramen noodles out of an upturned Frisbee."
We've been underprepared, too
Just like these unfortunate and underserved (and, OK, imaginary) ex-students, we have also been shortchanged by our schools, at least when you consider than few of us ever learned anything about the stock market or money management in school. I remember being taught about applying makeup when I was in home economics, a skill I've yet to find a real need for. Meanwhile, touch-typing, a skill that would have served me well in my life as a writer, was never something anyone encouraged me to study. So here I am, an (admittedly fast) two- to four-finger typist.
I had my financial enlightenment in my early 30s, which is a lot sooner than most people, some of whom go through their whole life without ever learning how and why they might want to invest. Still, if only I'd learned about investing sooner . I'd probably be a lot better off. I'll bet you're in the same camp.
Look at the big picture
If you, like me, now know about the power of the stock market, and how it can turn small sums into large ones over long periods of time, I hope you also know that there's more to know -- and to do. For example, you need to step back and look at the big picture. Yes, you may be investing, but are you saving and investing enough? Have you allocated your dollars in a sensible fashion, or are you taking on too much or too little risk? Are you taking advantage of opportunities to lower your taxes while saving and investing? Are you on track to give yourself a comfortable retirement? (If you're counting on Social Security, perhaps think again . read Dayana Yochim on the topic.)
I urge you to take a little time to learn more about retirement issues. We can help, with our Rule Your Retirement newsletter. It's issued each month, can be read in a single sitting, and contains lots of valuable tips as well as inspiration and motivation. (You've got little to lose and a lot to gain by trying it for free.)
These articles on retirement may also be of interest:
- Do You Want to Work Forever?
- Annuities: Who Needs 'Em?
- 401(k) Tips
- 60-Second Retirement Plan
- Your Incredible Vanishing Pension
- Confront the Brutal Facts of Your Retirement
- Get Rich by Beating the Odds
Learn even more in our Retirement area. And if the thought of taking control of something as critical as retirement on your own is daunting, seek the help of a financial advisor. Choose carefully, though (we offer some tips), and perhaps try our well-regarded TMF Money Advisor service.
Kids can learn, too
Meanwhile, as you sock away money and invest, consider switching on a financial light bulb over the head of some teenager you care about. Although some schools are beginning to figure out that they need to teach kids about money, odds are that your young friend could still learn a lot from you. Or from us. Point that person to our Teens & Their Money area, where we have a lot of good (and free) material for teens and clever pre-teens.
Kids have the most to gain from investing. If they invest in solid long-term growers that serve them well for decades, they can end up quite wealthy one day. And they don't need to find obscure high-tech or biotech firms to get there. A thousand dollars invested in PepsiCo (NYSE:PEP) stock 25 years ago would have grown to more than $65,000 today, and that's not even counting the value of dividends paid. If more money had been invested over time, the end result would be even bigger. And if the investment were left to grow for longer than 25 years (say, perhaps, 40 years, from age 16 to the still-youthful age of 56), the final result would be bigger still.
Lots of ordinary companies have served investors well over the decades, and many will continue to do so. Consider how $1,000 would have grown over the past 25 years in these stocks (again, excluding dividends): Procter & Gamble (NYSE:PG), more than $44,000; Wal-Mart (NYSE:WMT), more than $300,000, General Electric (NYSE:GE), more than $60,000; IBM (NYSE:IBM), almost $10,000; McDonald's (NYSE:MCD), more than $40,000; and Disney (NYSE:DIS), more than $30,000.
We may be unprepared now, but we don't have to remain in this condition long. Every hour you spend learning more might boost your ultimate net worth by thousands of dollars. And best of all, learning and investing can even be pleasant and fun, and not a chore.
Selena Maranjian 's favorite discussion boards include Book Club , Eclectic Library, and Card & Board Games. She owns shares of PepsiCo and Wal-Mart. For more about Selena, viewher bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.
