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Ask HN: How to get my friends interested in investing?
I've been investing both passively and actively since I was 20. I invest primarily in index funds with a small amount allocated to equities and forex.
I see a lot of value in investing early (I'm 27 now, which I suppose is still relatively early), but I'm having a hard time convincing my friends to invest in their future. I often hear from my friends that they don't have the money to invest at all, but my frustration comes from hearing that while we're at a bar or out to dinner. I try to explain to them that they could try not buying that extra drink or appetizer, saving maybe $10 monthly, and having $120 to invest at the end of the year. It's small, but it's a start and it adds up over a long period of time.
I guess my main struggle is getting my friends to understand why that small amount will matter in 30-40 years when they retire. I learned early on about the power of compound interest, but I feel like it's incredibly difficult to get people to care about something that is so distant.
What techniques or methods do you use to talk to your friends/family about investing for their future?
- gus_massa 10y agoIt's not so much money. Let assume $10 monthly, during 50 year, and a 5% annual interest rate. For simplicity let's use the compound interest over all the 50 years. The total is: $120/year * 50years * (1.05)^50 ~= $70000 [That is assuming you live in a stable country without hyperinflation, bank bankruptcy and fraud. Hello from Argentina.]
- lekeve 10y agoHey $70,000... Not a bad chunk of change considering you only had to give up one beer(maybe two)/appetizer per month.
- cauterized 10y agoThat simplification results in an enormous exaggeration of the benefits. The actual result is between $25-30k. Assuming the rate of return is steady (which it's unlikely to be). Which isn't an awful return on $6k total investment, but isn't a mind-blowing 10x return either.
- rijoja 10y agoWell if you are interested in more risky investing then you could sell it as a game. Appeal to their sense of cleverness.