In fact, they don't even know they exist. Why is this? A big part of the answer is the abysmal quality of our public education monopoly. Investors realize that monopolies are a bad idea. Why? Because monopolies don't innovate. They don't have to. The only competition for public schools is private schools, which - conveniently for them - is completely unaffordable for most families. Monopolies have no incentive to be efficient or effective. (As is the case with most taxpayer-funded activities.) And there is zero pressure to satisfy the customer. (Unless you believe the "customers" are teachers and administrators rather than students and parents.) As a result, kids routinely graduate from high school with no financial literacy. They don't understand compound interest, what 401(k)s and IRAs are, the advantages and disadvantages of adjustable-rate mortgages, or why we even have a stock market. Then they stumble out into the world, rent an apartment, get a car from a "Buy Here, Pay Here" lot (the only kind that lends to young folks with no job history and no credit score), and apply for a credit card with a 24% interest rate. What could go wrong? Just about everything. Is it any wonder these young people - with no experience or knowledge - soon say they prefer socialism to capitalism. Free college education. Free pensions. Free health care. Free childcare. Heck, free bus fare! You can argue that these things aren't really free, that they are funded by taxpayers. But they know they aren't the ones paying those taxes. (Not yet, anyway.) Young people know they have to earn money to spend it. But they were never taught Reality 101: If you spend everything you make, you won't get ahead. You will simply subsist. Nobody gets rich spending money. (Although smooth talkers in retail will insist that "you have to spend money to make money.") You get rich by having your money work as hard as you do. That means you have to own things. You need to own a home rather than rent one. (Unless your job or life circumstances make that untenable.) You need to own Amazon, Visa, Costco and Netflix, rather than just handing your money over to them month after month. I realize that home prices have risen sharply since the pandemic and mortgage rates have doubled. But that doesn't mean anyone is shut out of the property market. In my book, I describe how I bought my first two homes with no job security, no credit score and no money down. It can be done. But your high school teacher, your college professor and your parents aren't going to show you. It's not because they're holding back. They don't know either. In addition to building equity in a home, you need a diversified portfolio of stocks, the world's best-performing asset class. That takes money, many young people complain, and I don't have any! Whose fault is that? Take ownership of your life. Upgrade your marketable skills. Optimize your income (by moving into a better paying position with your current employer or finding a new one). Live beneath your means, which allows you to save. Invest those savings to earn a higher rate of return than you can on super-safe assets like CDs or money market funds. And let those investments compound, rather than succumbing to the temptation to spend it along the way. It's that simple. And if anyone has personal circumstances, they genuinely believe preclude them from taking these steps, all they have to do is download a superintelligent assistant onto their laptop or phone. They're free to download - and free to use. Visit the App Store and get ChatGPT, Perplexity, Claude, Gemini, Copilot or Grok. (Or all of them.) You can enter your personal circumstances. (Even issues that you wouldn't share with friends, like your wife's out-of-control spending or your husband's gambling addiction.) You will receive a practical, informed response - and a detailed plan to move forward. And you can ask follow-up questions or receive clarification as you go. As your circumstances change, you can enter those too. In short, when I was growing up - broke and largely ignorant like most young people - "I don't know where to start or what to do" was a valid complaint. (Although I made it my personal mission to remedy my ignorance.) But today - with powerful, personalized advice available to everyone with a phone at no cost - "I don't know what to do" sounds like a hollow excuse. Knowing what to do is no longer the hard part. The hard part - as has always been the case - is actually doing it. However, I've got some advice to make that simpler too, as I'll describe in my next column. Good investing, Alex
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