Bill Poulos grew up in Detroit Michigan. After high school, he earned a degree in engineering from GMI. After graduating and beginning to work full-time, he worked his way through earning his MBA (with a degree in finance) from the University of Michigan. Below is his view on saving money, going to school, choosing a career, and investing to create a comfortable life for you and your family. (Read more from Bill on avoiding fake news and setting life goals and taking steps to make them come true.)
It’s quite a paradox that people—American citizens—from high school, college, all through their adult lives, are largely unaware of how the capitalistic system works and how it has raised more people out of poverty than any other system known to man.
It starts from high school, nothing is taught about it.
College, these days, nothing’s thought about it.
And so, you’ve got people graduating from college, you’ve got adults of all ages, of all stripes of education, who have never had any financial training. Any serious financial training.
That’s a shame because we’re the land of free markets.
But it’s not that difficult.
The one thing everybody should be doing is saving 10% right off the bat.
I hear people say, “I can’t do that. I need every single penny.”
Well, if you pay yourself first, then whatever you have leftover, that’s gonna be your lifestyle.
The remedy to having more for recreational and other needs is to improve yourself, get an education wherever you’re at.
If you don’t have a high school degree, get a GED.
You do have a high school degree, get into more advanced learning.
Doesn’t have to be college.
It could be trades, trades are excellent.
Become an electrician, a mechanic, a millwright, a pipefitter.
Do something where there’s a need, aim for fulfilling a need.
Don’t just go to college and major in general studies so that when you graduate, you’re of no use to anybody.
Furthermore, don’t go to college and borrow money to do so, and graduate with $100,000 in debt.
That is a damn dumbest thing you could ever do, starting out in life.
Rather, work your way through college if need be and take six years to graduate or even seven years to graduate, as opposed to four.
When you do, you’ll be debt free.
These are very simple things that are within everybody’s control.
Now then, in terms of investing, there are no guarantees in the markets.
The markets go up to go down, the stock market crashes every eight or nine or 10 years or so, and it will continue to do so.
Unless you get into teaching yourself about active trading, what you need to do is invest in a balanced portfolio of different assets that attempt to be non-correlated with one another.
You can’t get that 100%, but at least it will help mitigate risk.
For example, you would want small cap stocks, large cap stocks, short term bonds, long term bonds, international stocks, some commodity related stocks or ETFs, you might even want a very, very small portion in cryptocurrency.
But the idea is to not have all your eggs in one basket.
And then what you do is you try to maintain a fixed percentage of each of those allocated buckets, and then you readjust it once a year.
So, if the stocks went way up high and bonds didn’t go anywhere, now your percent value in stocks is above your target allocation.
So, what that tells you is sell off some of those stocks, so that’s a percentage is back down to your target.
Take the money and by other assets in your portfolio that are below the target.
That way, you’re buying low and selling high all through the years.
By the time it get to retirement, you’ll be happy camper.