A rally for GameStop stock started by members of Reddit thread WallStreetBets revealed something about the financial literacy of young America. Many experienced investors made thousands from the random volatility, but many inexperienced investors followed the hype and lost big.
As investing apps like Robinhood have worked to make markets feel more like a game, GameStop made us wonder who is working to make sure those still building their wealth don't squander it on the latest meme stock?
Ramit Sethi, a personal finance expert and author of I Will Teach You To Be Rich, shared his top financial literacy tips for people under 20:
You Want to Live a Rich Life
Start by answering this question: What is a rich life to you? Get specific about what you want.
Start With Little Steps, Like Your Bank
You shouldn’t be paying any annual fees. You should have a good credit card. And you should know the tricks to save yourself money from the banks.
Your Money Should Earn More Money For You
Even when your money is just sitting there, it earns you interest. And if you invest sensibly, you can see even greater returns over the long term.
Don’t Let Money Run Your Life
Certain things are worth spending a lot on if they make you happy. The minute your rules start making you feel crazy, it’s time to re-examine your rules.
Avoid Common Myths
Buying a house isn’t always the best investment. Getting a refund on your taxes isn’t a bad thing. And paying 1% to an advisor isn’t worth it. If money is important to you, get educated.