The Scary Stepmother

Dear Scott,

I need help to do a ‘full life’ money plan for my 21-year-old stepson -- and I am getting migraines! Here is how I picture it: he puts 12.5% of his wage into super, gets married at 25, has a good job, takes out a 30-year mortgage, and has two kids (reports show that two kids at private school costs $800,000 by the end of Year 12!). He then retires at 67.5 years old and has a ‘reasonable life quality’ of $42,500 income a year, with around $500,000 saved in super. Is all this possible? Can you help?

May

Hi May,

I just read your question, and I’ve got to be honest … you’re kind of freaking me out right now.

Your heart is obviously in the right place, but you may as well be lecturing him about the danger of venereal diseases.

First, you’re never going to convince a 21-year-old guy that he’ll one day be 67.5 years old.

Case in point: a young Mick Jagger once said, “I’d rather be dead than singing ‘Satisfaction’ when I’m forty-five”.

Second, no 21-year-old bloke wants to have, as you put it, “a reasonable life quality”.

He wants Satisfaction, goddammit!

Here’s what I’d say to him:

Most things don’t matter that much, but there are a couple of things that really do:

Make sure you do well-paid work that you enjoy, and become obsessed with saving money.

Let’s deal with work first: fact is, you’re going to spend 90,000 hours of your life at work. Add in sleeping, Facebook and sitting on the can, and there’s not much time left over. You’ll spend more time at work than you do with your family and friends. So you better make sure you enjoy it, and you better make sure you get paid well.

And saving: if you want to stay poor, do what everyone else does and focus on spending your money. If you want to become wealthy, focus on saving and investing your money. When you have savings, you’ve got freedom. You call the shots. You’re in control.

Then give him a copy of my book, encourage him to work hard, and have him follow the steps.

He’s got this.

Scott