Ask Paul: I'm investing, saving 70% of my income and I'm 16


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Dear Paul,

I am a 16-year-old wanting to plan for my future.

Between my two casual jobs, I earn between $150 and $250 a week. I save 70%, putting $20 a week in my super (enough to claim the maximum government co-contribution) and the rest in a high-interest savings account.

ask paul clitheroe im investing and saving 70 per cent of my income

I also have an InvestSMART high-growth account into which I put $100 a month. Given the current market and my age, what would you recommend I do with the remaining money I have?

Or even could you propose a change to my current strategy? Thank you. - Praneel

Goodness, Praneel, are you really 16? You have the money brain of an experienced adult investor!

You outline quite a few of the essential rules of money.

You cover: rule 1 - spend less than you earn; rule 2 - save on a regular basis into growth assets, which you are doing through super and your InvestSMART high-growth account (disclosure, I am chairman of InvestSMART); rule 3 - let compound returns do the hard work for you; and rule 4 - use dollar-cost averaging through regular investment.

Pretty damn good for a 16-year-old. I'm not even going to mention what my money skills were like at 16 - after your words I am too embarrassed.

All I can say is that I would not add more to your super contribution. Super is a brilliant investment, but you have more than half a century to retirement. I have no idea what super legislation will be like that far out.

A simple option is to add more to the InvestSMART fund (or any other low-cost fund). As you know, markets have gone backwards lately. Sure, they may go lower but there is more value in the market today than there was three months ago.

You need flexibility when you are young, and investing outside super gives you this.

But, really, Praneel, you are all over money already. Stay on your current path.

What I'd like to do, if it was possible, is buy shares in you. You are destined for financial success.

Ask Paul: Where are they now?

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Peter Evans
December 13, 2023 7.53pm

Hi Paul, I would love to know what your investments are. You are a well respected financial adviser, I have one of your books that I purchased years ago and you have stated earlier that you reached financial independence years ago. Perhaps you could give us an insight which I'm sure many of your readers would find interesting and inspiring.

Mandy Higgins
December 17, 2023 11.00pm

Paul's said it many times in different ways....a mix of shares and property - though he likes shares for their simplicity and liquidity...However, if you are wanting digits, BRW (net worth facts) might give better insight.