To My Nephew on His High School Graduation

Dear Nephew,

After 13 years spent in school, you’ve finally earned a high school diploma, which is basically a ticket for your first steps into the real world. The choices you’ve made up to this point have mostly been under the shelter of your parents and your school district, which have brought you to the threshold of adulthood. From here, you’re essentially on your own.

I’m going to be the last person to tell you what to do next.

The world isn’t going to give you much of anything. Yes, you probably won’t starve to death, and you’re lucky enough to have a family that will probably ensure you always have a roof over your shoulders. However, the world isn’t going to hand you the stuff you want. You’re not going to be given respect or dignity. You’ve got to go out there and work for those things, and almost anything else you might want.

Look around you at the people who have something in their lives that they’ve built over many years. A good family. A good career. A strong standing in the community. Those things weren’t given to them. They weren’t effortless. Those things were built over a lot of years of consistent effort. People didn’t just get up one morning and find that the world was handing them a career or handing them a leadership role in the community or handing them a great family. Nope, those things were built on the back of making many good choices for many years.

Right now, you’re sitting at the point in your life where you start making those choices for yourself. Are you going to choose things that build a life that you’re happy to be living? You make those choices every single day.

You’re going to fail sometimes. What matters is whether you lay on the ground blaming others or whether you pick yourself up, fix what went wrong with you, and keep trucking forward. The reality is that the world doesn’t really care what you rail about when you fall on the ground. You can blame everyone and everything for those moments of failure and the world does not care. What the world actually cares about is whether you can handle a bad event and keep moving forward, ideally with some sort of self-improvement based on what you learned from that failure.

It’s going to seem massively unfair sometimes. You’re going to feel utterly disrespected sometimes. You’re going to feel utterly unappreciated sometimes. Sometimes, you’re just going to screw everything up and make some awful choices. The question is, when the bad results of those choices come around, who are you going to blame, and what are you going to do about it? Blaming others is a waste of time. Blaming yourself is much better, but only in the sense of recognizing things you can actually fix about yourself and fixing it. The best thing you can do? Skip the blame entirely. Look at yourself, ask what you can do to keep yourself from falling over that same rock in the future, and make that happen, then keep rolling forward.

Every time you get paid, put some of it aside for a future where you can’t work or your job doesn’t pay enough to help you tackle a major life problem. If you’re lucky, that future never comes and it becomes a future where you don’t have to work. This needs to come off the top. Live on what remains. How much should it be? Take off as much as you possibly can. A fifth of your take-home pay is a good place to start.

What should you do with it? Put it in a savings account until you have about a month’s worth of living expenses in there, then open up a Roth IRA and start putting it in there. You can put $5,500 per year into that Roth. If you manage to put that much into the Roth in a year, put the rest aside for other investments and buy a rental house in a few years with the goal of renting out that house to people. Use the money you make from that rental to keep saving for more rentals. You might figure out a better plan for the money in the future, but that’s a good game plan to start with.

Why? Well, you’re going to get knocked down sometimes by life, as I stated above. If you’re going to pick yourself back up and keep going, you’re going to need some resources – probably money. When times are good, make sure you have money for when times are bad.

Treat every job as your ticket to a better job. If you go to work just to get paid and go home and not do anything else, you’re losing a ton of the financial value from whatever your job happens to be. You have to be at work anyway – get as much value out of that job as you can.

This does not mean that you need to go in there and work yourself to death on things that don’t produce any value for you. You should absolutely do your job responsibilities well, but along the way, you should be using your spare time and energy and whatever resources are available to you to prepare yourself for your next job.

For example, if you have downtime at work, don’t just stand or sit around. Take a peek at the job requirements for whatever job you want to have next – the one that pays you more or is more enjoyable or whatever – and start making sure you have those requirements in the bag. Build strong positive relationships with people who are on that career path.

Any time you spend just twiddling your thumbs at work just guarantees that you’ll be stuck at the same point in your career path for the rest of your life. If you want something more than an entry-level job that doesn’t pay very much, don’t just joke around at the water cooler or check Snapchat and play games on your phone, because someone else will take that promotion or that new job instead of you. Why? That someone else actually did something to get that better job.

If you don’t have a clear reason to go to college and you’re going to be taking out extensive student loans for it, go to trade school. So many people are encouraging you to go to college right now. If you don’t know why you’re going, don’t go. Seriously. Instead, go to a trade school to learn a trade so you can earn some money until you figure out why you would want to go to college.

The argument that you should go to college to “figure yourself out” made sense in an era where the cost of college wasn’t prohibitive and you weren’t completely buried by an avalanche of debt in doing so. If you can’t afford college without a ton of student loans, don’t go unless you have a very clear idea of why you’re going and what you want to do there.

Trade school is a far better alternative. You can go to school for a pretty short period of time and learn to become a plumber or an electrician or a carpenter, trades that will almost always have significant employment value. People will always need to build things, and if you have the skill to take on a specific challenging part of building something, you’ll get paid. It might not be your life’s ambition, but it’s an inexpensive and quick route to a job that pays well and you can use that pay to start off with a decent job and not a lot of debt. If you decide college is right for you later, you can use some of the money you’ve saved to finance it.

I’m not saying college is bad, not at all. I’m simply saying that the financial cost of college is so high that unless you’re walking in there with a clear purpose, you’re probably not getting enough value out of that investment.

If there’s a decent chance you will look back in five years on the thing you’re about to do and regret it, don’t do it. This is the one piece of “keep your nose clean” advice I’ll offer you. It is really, really tempting to do a lot of crazy stuff in your late teens and twenties. I’ll be the last person to tell you not to do any of it.

I will say this, though: if you’re about to do something that has obvious risk, stop for one second and ask yourself whether you might regret this in five years or ten years. If there’s even a little risk that you’re going to look back on this as a moment where you screwed everything up, it’s not worth it. Find something else to do. It’s not as if this world is lacking in interesting and fun things to do.

You have a great life ahead of you. Have fun with it, and good luck.

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Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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