Plan/education for someone desiring to achieve financial independence primarily through investing?
Stay in school, learn everything you can, and spend as little money as possible.  And realize that the chances of you dropping out and becoming a millionaire are much lower than the chances of you staying in school and becoming a millionaire.  You're unlikely to be a good investor if you make bets with negative expected payoffs. The basic problem here is that you need to have money to invest before you can make a profit from it.  Now if you have say $500K or more, you can put that in mutual funds and live modestly off the profits.  If you don't have that $500K to start out with, you're either looking at a long time frame to accumulate it - say by working a job for 30+ years, and contributing the max to your 401k - or are playing the market trying to get it.  The last is essentially gambling (though with somewhat better odds than casinos or horse racing), and puts you up against the Gambler's Ruin problem: https://en.wikipedia.org/wiki/Gambler's_ruin You also, I think, have a very mistaken idea about the a typical investor's lifestyle.  Take for instance the best known one, Warren Buffet.  No offence to him, but from everything I've read he lives a pretty boring life.  Spends all day reading financial reports, and what sort of life is that? As for flying places being exciting, ever tried it?  I have (with scientific conferences, but I expect boardrooms are much the same), and it is boring.  Flying at 30,000 ft is boring, and if it's a commercial flight, unpleasant as well.  A conference room in London, Paris, or Milan is EXACTLY the same as a conference room in Podunk, Iowa.  Even the cities outside the conference rooms are much of a muchness these days: you can eat at McDonalds in Paris or Shanghai.  Only way to find interest is to take time from your work to get outside the conference rooms & commercial districts, and then you're losing money.
"First off, monozok is right, at the end of the day, you should not accept what anyone says to do without your money - take their suggestions as directions to research and decide for yourself.  I also do not think what you have is too little to invest, but that depends on how liquid you need to be.  Often in order to make a small amount of money grow via investments, you have to be willing to take all the investment profits from that principle and reinvest it.  Thus, can you see how your investment ability is governed by the time you plan to spend without that money?  They mantra that I have heard from many people is that the longer you are able to wait, the more 'risk' you can take.  As someone who is about the same age as you (I'm 24) I can't exactly say yet that what I have done is sure fire for the long term, but I suggest you adopt a few principles: 1) Go read ""A Random Walk Down Wall Street"" by Burton G. Malkiel.  A key point for you might be that you can do better than most of these professional investors for hire simply by putting  more money in a well selected index fund.  For example, Vanguard is a nice online service to buy indexes through, but they may require a minimum.  2) Since you are young, if you go into any firm, bank, or ""financial planner,"" they will just think you are naive and try to get you to buy whatever is best for them (one of their mutual funds, money market accounts, annuities, some flashy cd).   Don't.  You can do better on your own and while it might be tempting because these options look more secure or well managed, most of the time you will barely make above inflation, and you will not have learned very much. 3) One exciting thin you should start learning now is about algorithmic trading because it is cool and super efficient. quantopian.com is a good platform for this.  It is a fun community and it is also free. 4) One of the best ways I have found to watch the stock market is actually through a stock game app on my phone that has realtime stock price feed.  Seeking Alpha has a good mobile app interface and it also connects you to news that has to do with the companies you are interested in." "Well... (in the US, at least) ""making investments and building assets"" is how you save for retirement.  The investments just happen to be in the stock market, and the federal legislature has directed the US version of  Inland Revenue Services to give special tax breaks to investments which are not withdrawn until age 59 1/2. I don't know if there are such tax breaks in Pakistan, or what the stock market is like there, so I'm presuming that by saying, ""building lucrative assets"", your father is referring to buying real estate and/or becoming a trader. Anyway, it's a good thing that you are looking so far ahead in life instead of only thinking of fast cars and pretty girls." "It includes whatever you want to do with your investment.  At least initially, it's not so much a matter of calculating numbers as of introspective soul-searching.  Identifying your investment objectives means asking yourself, ""Why do I want to invest?""  Then you gradually ask yourself more and more specific questions to narrow down your goals.  (For instance, if your answer is something very general like ""To make money"", then you may start to ask yourself, ""How much money do I want?"", ""What will I want to use that money for?"", ""When will I want to use that money?"", etc.)  Of course, not all objectives are realistic, so identifying objectives can also involve whittling down plans that are too grandiose. One thing that can be helpful is to first identify your financial objectives: that is, money you want to be able to have, and things you want to do with that money.  Investment (in the sense of purchasing investment vehicles likes stocks or bonds) is only one way of achieving financial goals; other ways include working for a paycheck, starting your own business, etc.  Once you identify your financial goals, you have a number of options for how to get that money, and you should consider how well suited each strategy is for each goal. For instance, for a financial goal like paying relatively small short-term expenses (e.g., your electric bill), investing would probably not be the first choice for how to do that, because: a) there may be easier ways to achieve that goal (e.g., ask for a raise, eat out less); and b) the kinds of investment that could achieve that goal may not be the best use of your money (e.g., because they have lower returns)." This is what helped me.  - I did my own taxes - get your own job, not from your parents, or parents friends, but entirely by yourself. Complete independence will equate to financial independence - Wikipedia (for specifics and definitions) paired with finance genre movies - audiobook, or YouTube video, 'why an economy grows, and why it doesnt'   That's a good start. Good luck!   Don't be too gung ho to invest and all that crap, you got lots too learn. Rule 1: don't be too eager, that's how you lose all your money! My best financial investments to date were:  1) my education (engineering) 2) I didn't pay my student loan off, instead, I bought a property, and I made $70,000 in 8 months off of one, and $100,000 off of another one in 2 years,  3) still making minimum payments on my student loan, a dollar today is worth more than a dollar tomorrow  4) pack my own lunches every day, eating out every meal ends up costing more than most mortgage payments.   This is in Vancouver BC, Canada. You are smart to read books to better inform yourself of the investment process.  I recommend reading some of the passive investment classics before focusing on active investment books: If you still feel like you can generate after-tax / after-expenses alpha (returns in excess of the market returns), take a shot at some active investing.  If you actively invest, I recommend the Core & Satellite approach: invest most of your money in a well diversified basket of stocks via index funds and actively manage a small portion of your account.  Carefully track the expenses and returns of the active portion of your account and see if you are one of the lucky few that can generate excess returns. To truly understand a text like The Intelligent Investor, you need to understand finance and accounting.  For example, the price to earnings ratio is the equity value of an enterprise (total shares outstanding times price per share) divided by the earnings of the business.  At a high level, earnings are just revenue, less COGS, less operating expenses, less taxes and interest.  Earnings depend on a company's revenue recognition, inventory accounting methods (FIFO, LIFO), purchase price allocations from acquisitions, etc.  If you don't have a business degree / business background, I don't think books are going to provide you with the requisite knowledge (unless you have the discipline to read textbooks).  I learned these concepts by completing the Chartered Financial Analyst program. "The statement ""Finance is something all adults need to deal with but almost nobody learns in school."" hurts me. However I have to disagree, as a finance student, I feel like everyone around me is sound in finance and competition in the finance market is so stiff that I have a hard time even finding a paid internship right now. I think its all about perspective from your circumstances, but back to the question. Personally, I feel that there is no one-size-fits-all financial planning rules. It is very subjective and is absolutely up to an individual regarding his financial goals.  The number 1 rule I have of my own is - Do not ever spend what I do not have. Your reflected point is ""Always pay off your credit card at the end of each month."", to which I ask, why not spend out of your savings? plan your grocery monies, necessary monthly expenditures, before spending on your ""wants"" should you have any leftovers. That way, you would not even have to pay credit every month because you don't owe any. Secondly, when you can get the above in check, then you start thinking about saving for the rainy days (i.e. Emergency fund). This is absolutely according to each individual's circumstance and could be regarded as say - 6 months * monthly income. Start saving a portion of your monthly income until you have set up a strong emergency fund you think you will require. After you have done than, and only after, should you start thinking about investments. Personally, health > wealth any time you ask. I always advise my friends/family to secure a minimum health insurance before venturing into investments for returns. You can choose not to and start investing straight away, but should any adverse health conditions hit you, all your returns would be wiped out into paying for treatments unless you are earning disgusting amounts in investment returns. This risk increases when you are handling the bills of your family. When you stick your money into an index ETF, the most powerful tool as a retail investor would be dollar-cost-averaging and I strongly recommend you read up on it. Also, because I am not from the western part of the world, I do not have the cultural mindset that I have to move out and get into a world of debt to live on my own when I reached 18. I have to say I could not be more glad that the culture does not exist in Asian countries. I find that there is absolutely nothing wrong with living with your parents and I still am at age 24. The pressure that culture puts on teenagers is uncalled for and there are no obvious benefits to it, only unmanageable mortgage/rent payments arise from it with the entry level pay that a normal 18 year old could get." The best way I know of is to join an investment club.  They club will act like a mutual fund, investing in stocks researched and selected by the group.  Taking part in research and presenting results to the group for peer review is an excellent way to learn.  You'll learn what is a good reason to invest and what isn't. You'll probably pick both winners and losers. The goal of participation is education.  Some people learn how to invest and continue happily doing so. Others learn how to invest in single stocks and learn it is not for them. "The raw question is as follows:  ""You will be recommending a purposed portfolio to an investment committee (my class). The committee runs a foundation that has an asset base of $4,000,000. The foundations' dual mandates are to (a) preserve capital and (b) to fund $200,000 worth of scholarships. The foundation has a third objective, which is to grow its asset base over time.""   The rest of the assignment lays out the format and headings for the sections of the presentation.  Thanks, by the way - it's an 8 week accelerated course and I've been out sick for two weeks. I've been trying to teach myself this stuff, including the excel calculations for the past few weeks." Your question seems to be making assumptions around “investing”, that investing is only about stock market and bonds or similar things. I would suggest that you should look much broader than that in terms of your investments. Investment Types Your should consider (and include) some or all of the following for your investments, depending on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. I love @Blackjack’s explanation of diversification into other asset classes producing a lower risk portfolio. Excellent! All the above need to be considered in this spread of risk, depending as I said earlier on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. Stock Market Investment I’ll focus most of the rest of my post on the stock markets, as that is where my main experience lies. But the comments are applicable to a greater or lesser extent to other types of investing. We then come to how engaged you want to be with your investments. Two general management styles are passive investment management versus active investment management. @Blackjack says  That pretty much sums up passive management. The idea is to buy ETFs   across asset classes and just leave them. The difficulty with this idea is that profitability is very dependent upon when the stocks are purchased and when they are sold. This is why active investing should be considered as a viable alternative to passive investment.  I don’t have access to a very long time frame of stock market data, but I do have 30 or so years of FTSE data, so let’s say that we invest £100,000 for 10 years by buying an ETF in the FTSE100 index. I know this isn't de-risking across a number of asset classes by purchasing a number of different EFTs, but the logic still applies, if you will bear with me. Passive Investing I have chosen my example dates of best 10 years and worst 10 years as specific dates that demonstrate my point that active investing will (usually) out-perform passive investing. From a passive investing point of view, here is a graph of the FTSE with two purchase dates chosen (for maximum effect), to show the best and worst return you could receive. Note this ignores brokerage and other fees. In these time frames of data I have …   These are contrived dates to illustrate the point, on how ineffective passive investing can be, depending if there is a bear/bull market and where you buy in the cycle.  One obviously wouldn’t buy all their stocks in one tranche, but I’m just trying to illustrate the point. Active Investing Let’s consider now active investing. I use the following rules for selling and buying:- This is obviously a very simple technical trading system and I would not recommend using it to trade with, as it is overly simplistic and there are some flaws and inefficiencies in it. So, in my simulation,  These beat the passive stock market profit for their respective dates. Summary Passive stock market investing is dependent upon the entry and exit prices on the dates the transactions are made and will trade regardless of market cycles. Active stock market trading or investing engages with the market using a set of criteria, which can change over time, but allows one’s investments to be in or out of the market at any point in time. My time frames were arbitrary, but with the logic applied (which is a very simple technical trading methodology), I would suggest that any 10 year time frame active investing would beat passive investing. Goal - What is it that you are saving or investing to have: Educational costs, retirement, vacation, home, or something else. Dollar figure and time period would be the keys here. Risk tolerance - What kind of risks are you prepared to accept with the investment choices you are making? What kind of time commitment do these investments have and are you prepared to spend the time necessary for this to work? This is about how wild are the swings as well as what beliefs do you have that may play a role here. Strategy - Do you know what kind of buy and sell conditions you have? Do you know what kind of models you are following? This is really important to have before you buy something as afterward you may have buyer's remorse that may cause more problems in a sense. Record keeping - Do you know what kinds of records you'll need for tax purposes? Do you know how long to hold onto records? Those would be the main ones to my mind. "For a job doing that kind of stuff, what is PREFERRED is 4 year undergrad at ivy league school + 2 year MBA at ivy league school, and then several more years of experience, which you can sort of get by interning while in school this will of course saddle you with debt, which is counterintuitive to your plans basically, the easy way up is percentage based compensation. without knowing the right people, you will get a piss poor salary regardless of what you do, in the beginning. so portfolio managers earn money by percentage based fees, and can manage millions and billions. real estate agents can earn money by percentage based commissions if they close a property and other business venture/owners can do the same thing. the problem with ""how to trade"" books is that they are outdated by the time they are published. so you should just stick with literature that teaches a fundamental knowledge of the products you want to trade/make money from. ultimately regardless of how you get/earn your initial capital, you will still need to be an individual investor to grow your own capital. this has nothing to do with being a portfolio manager, even highly paid individuals on wall street are in debt to lavish expenditures and have zero capital for their own investments. hope this helps, you really need to be thinking in a certain way to just quickly deduce good ideas from bad ideas" Well this is not the best situation.  Sorry to your friend. First off ROTHs are out, you need earned income.  Secondly, I don't think the focus should be on retirement planning until there is again an earned income.  Thirdly, this person is just in a bad spot. Lets assume that you can find some really good mutual funds, that consistently return 10% per year.  At best this person can only pull out 10K per year without touching principle.  At that income level, taxes are not much of a concern; not as much as surviving.  If this person knows anything about investing, they know funds don't work like this.  They could be down 5%, down 5%, up ~40% in three years to give an average of 10% return.  Which of course further complicates matters.     This person (IMO) should seek to start a different career.  One that can cater to any long term issues this person has with pain/disability.  The money could be used toward training/education in order to get money flowing again.  That is not to say the full amount should be used for a BA in Russian Folk Literature, but some minimum training to get a career that starts earning real money. "There are many questions and good answers here regarding investment choices. The first decision you need to make is how involved do you intend to be in investment activity. If you plan to be actively investing by yourself, you should look for questions here about making investment choices. If you intend to be a more passive investor, look for posts by ""Bogleheads"", who focus on broad-focused, low cost investments. This is the optimal choice for many people. If you are not comfortable managing investments at all, you need to figure out how to find a competent and reasonably priced financial advisor to meet with and guide your investment strategy. This advice generally costs about 1-2% of your total managed assets annually." "(Leaving aside the question of why should you try and convince him...) I don't know about a very convincing ""tl;dr"" online resource, but two books in particular convinced me that active management is generally foolish, but staying out of the markets is also foolish.  They are: The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk by William Bernstein, and A Random Walk Down Wall Street: The Time Tested-Strategy for Successful Investing by Burton G. Malkiel Berstein's book really drives home the fact that adding some amount of a risky asset class to a portfolio can actually reduce overall portfolio risk. Some folks won a Nobel Prize for coming up with this modern portfolio theory stuff. If your friend is truly risk-averse, he can't afford not to diversify.  The single asset class he's focusing on certainly has risks, most likely inflation / purchasing power risk ... and that risk that could be reduced by including some percentage of other assets to compensate, even small amounts. Perhaps the issue is one of psychology? Many people can't stomach the ups-and-downs of the stock market.  Bernstein's also-excellent follow-up book, The Four Pillars of Investing: Lessons for Building a Winning Portfolio, specifically addresses psychology as one of the pillars." "Most articles on investing recommend that investors that are just starting out to invest in index stock or bonds funds.  This is the easiest way to get rolling and limit risk by investing in bonds and stocks, and not either one of the asset classes alone.   When you start to look deeper into investing there are so many options: Small Cap, Large Cap, technical analysis, fundamental analysis, option strategies, and on and on.  This can end up being a full time job or chewing into a lot of personal time.  It is a great challenge to learn various investment strategies frankly for the average person that works full time it is a huge effort.  I would recommend also reading ""The Intelligent Asset Allocator"" to get a wider perspective on how asset allocation can help grow a portfolio and reduce risk.  This book covers a simple process."