Reader Mail: 17 Years Old, Saving $500/month, What’s Next?

After my interview with, I received a rush of new readers visiting MDJ along with a slew of questions.  One email in particular stood out as it was from a 17 year old, David, who is already starting to save and get interested in investing.

Here is the email:

I’m 17 years old and work 3-4 days a week and I’m able to save about $400-$500 a month easily ($800/month net salary). I read on a yahoo article (syndicated from Forbes) that you started investing in mutual funds at only 16.

Are there any tips you would give me right now? And if you could do it all over again is there anything you would do differently?

I really don’t want my money to just sit in the bank, I want to put it to work!

Before I get started, I must commend David on starting early on his savings habits, if he keeps it up throughout his working years, it’s only a matter of time before he becomes very wealthy.  I remember the days where I was just learning about the saving, investing, and especially, the power of compounding interest.  The fuel or secret sauce behind the power of compound interest is time.

As a 17 year old, time is on David’s side. Say that David saves $6,000 per year ($500/month) for retirement in 45 years, and invests in a balanced portfolio of low cost index ETFs averaging 5% return after inflation.  What size portfolio will he have?  $1M in today’s dollars!  And that’s assuming that he saves $6,000 per year, with his current savings habits, it’s likely that he will save much more than that throughout his life.

What advice would I give him right now?  While David didn’t give me any specific goals, I’m going to assume that he wants to build as much wealth as possible and perhaps even retire a bit earlier than normal.

Watch Lifestyle Inflation

David, now that you have a regular savings habit, try to maintain your savings habit as a lifestyle choice.  The key to keeping your savings rate high is to to continue growing your means while keeping your lifestyle within reason.

Over the coming years, you will see some of your peers start making “real” money, then immediately inflate their lifestyle with debt – big mortgages, luxury car loans and perhaps even credit card debt to buy more “stuff” (The Joneses).  While “stuff” can be fun at first, it grows old, and can eventually become a burden.  A lot of people buy a lot of “stuff” so that they appear wealthy without being wealthy.  It’s up to you who you want to be.

Having cash in the bank will give you options throughout life.  Whether it’s for a larger down payment on a future house, paying cash for a car, or simply putting more money into investments.

Follow your Interests

Making the right career choice is important for your future earnings.  This may sound funny coming from a money guy, but do not make a lifelong career choice simply based on the salary that it will pay.  While salary is an important factor, don’t let it become the only factor.  At the end of the day, you should enjoy what you are doing since you’ll be spending most of your day in that field of work.

If you haven’t already, think about your current interests, then think about how they can apply to a future career.  When I say interests, what are some topics that you enjoy learning about?  Topics that you research and learn about in your free time (not when you have to).  For example, if you enjoy software programming and academically inclined, Engineering may be a good option.  Talk to people already in the work field that hit your interest list and talk to career counselors.

Continual learning is the key to getting good at a particular skill, and interest in that subject is a prerequisite.  Becoming an expert at a specific skill will bring you far in your career.

Invest with the Long Game in Mind

Now that you saving a bunch of cash, what should you do with all?  If your goal is to build wealth, then buy appreciating assets for the long term!  Do you have any interest in the stock market?  What about real estate?

For some people, it makes the most sense to invest in real estate.  It’s what they know, and they like knowing/seeing that they own a physical building.  Investment real estate growth, over the long term, is known to keep up with inflation.  Many investors have the strategy of buying rentals, using the rent to pay down the mortgage over time, and living off the rental income during retirement.  While this is a sound strategy, it is not passive.  It is more like running an active business especially when you get a bad set of tenants.

In my opinion, the easiest and most passive way to build wealth over the long term is by investing in the broad stock market.  I’ve written this many times before, but over any 20+ year period, broad market returns have exceed inflation.  In other words, historically, investing in the index over the long term has never lost money.

If you are just starting your investing journey, then setting up a mutual fund account with your bank to buy index mutual funds may be a good bet (in a TFSA).  When the account grows to $30k+, you may want to consider switching to a self-directed account and building an index ETF portfolio to save on fees, but sticking with low cost index mutual funds are ok too.

Like I said earlier, if you maintain your current savings amount, you will be a millionaire in today’s dollars just in time for traditional retirement.  If you want to retire earlier, you will need to save more, but likely not out of reach for you. Here is an article on how much you will need to save for early retirement.

Balance in Life

While building wealth can be all consuming, try to find that delicate balance between spending money on things that you value, and saving for financial freedom.  For example, some people value travel and experiences.  While this may be a high cost item, many travel extensively with modest budgets.  The key is to save for the things that you value while cutting back on things that don’t add value to your life.

You may find that your savings rate may drop if/when you get married and have children – that’s ok too!  Providing that you maintain a reasonable lifestyle, the savings rate will bounce back with time.  Hopefully, your future spouse will have the similar financial values which will accelerate your financial goals.

Oh and one more thing David, enjoy the journey.

Putting it All Together

I believe that David has a huge head-start in building wealth and I have no doubt that David is a multi-millionaire in the making.

I have touched on a few pieces of advice in this article but I’m interested in your thoughts and opinions.

What advice do you have for 17 year old David?

I've Completed My Million Dollar Journey. Let Me Guide You Through Yours!

Sign up below to get a copy of our free eBook: Can I Retire Yet?

Posted in


FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments
6 years ago

David is off to a GREAT start. Continue socking away that money in a reliable ETF and re-invest every penny of the dividends. Let it compound and grow, and when the time comes, you’ll have a nice big nest egg.

I would also encourage him to investigate and speculate with individual stocks, using a small amount of additional discretionary money. Smart risks can reap large rewards, and there are plenty of them to be had in the market if you do your homework.

Best of luck to him!

Jess @ Best Credit Cards Canada
6 years ago

Wow, way to go, David! This is so exciting to read. David sounds very much like me when I was that age, I loved to save (and still do) and watch my money grow. Where he is much more savvy than I was, is his interest in investing, rather than just putting in the bank. That’s pretty awesome. I love all the advice that has been given here.

Adam @
6 years ago

I wish I had saved at those levels when I was 17.

I’m sure David will end up extremely well off if he keeps it up.

6 years ago

Kudos to this kid for investing early, but what about post-secondary education? That’s not a criticism – I’m genuinely curious. When I was in high school, most of my income went towards paying for university (and graduating debt-free).

If he invests early and doesn’t touch the money, won’t his gains be wiped out by any debt he incurs? If he’s planning on going into a trade or becoming an entrepreneur that’s a different story :)

6 years ago

Considering the investor is only 17 with decades left to invest and is American my suggestion is to invest in U.S. dividend aristocrats as they have outperformed the American broad equity market by a wide margin over the past 40 years. A good representative ETF is “ProShares S&P 500 Dividend Aristocrats (NOBL)” which targets companies that are members of the S&P 500 and have increased dividend payments each year for at least 25 years.

6 years ago

“…averaging 5% return after inflation.”

A great many people in finance state future long-term stock market returns will be well below historical long-term returns; thus David might net an annual 1-2% (after inflation and costs) for the next 1-2 decades, especially if he’s going the vanilla ETF/index route. At least he won’t be losing money.

But, yeah, keep up the saving.

4 years ago
Reply to  SST

Have you seen an andex chart? I believe the math is more accurate then you say SST. I don’t have my copy of an andex chart handy but I believe it is 7.8% or around their for a rolling 10 year period so call it 8%. Lets say the average for inflation is 3% sooooooo 8-3= 5%. Keeping in mind there is potential taxes depending on where you hold this money your real return if all dividends are reinvested should be around 5%.

Alpha Centauri
4 years ago
Reply to  Cody

I’d like to also emphasize that David (or anyone) should aim to dollar cost average, ie buy a prescribed dollar amount of funds/etfs every prescribed amount of time (eg. $100/week, $500/month, etc). Nobody has a crystal ball, and it is very hard to time the market. Even Warren Buffett has admitted that he has only met a few people in his lifetime who could accurately and predictably beat the market.

The advantage of dollar cost averaging, is you will get more shares/units when prices are low. This compounds up more dramatically when prices increase. Take the Great Drepression. Imagine you had $1000 to invest, and you bought an ETF covering the stock market (There were no etfs back then, but this is just to illustrate a point), and spent the entire $1000 just prior the stock market crash of 1929. How long do you think you had to wait to break even?….Until 1954! That’s right – 25 years! How many people would’ve held on? People are irrational when in comes to finance sometimes. However, what if, instead, you spread that $1000 over a very long period, dollar cost averaging, say, $20/month? How well would that have worked? Well, you would’ve been able to buy stock very, very cheaply in the dirty thirties. The stock market lost about 90 % of its value from the 1929 peak to the early thirties. Now imagine you continued doing that $20/month until your retirement. How well do you think you would have done? Very, very well. The stock market boomed after that.

I dollar cost average weekly. The funds go into my Questrade account. I have a combo of about 70 % equity/30 % fixed income etfs (am about 15 years from retirement, or what I call, don’t have to work a job, if I don’t want to). I look at my percent allotments. If one etf is slightly below my designated allotment, I buy some more of that one. If another etf is above that allotment, I may not buy any more of that etf for a few weeks until the percentages even out to what I originally decided. I’ve definitely noticed there are times when I buy more equity (prices are down), and other times more fixed income (when their prices are down, and equities are higher).

6 years ago

Great article. When I was 18 I started an RRSP. 2 yrs later I had saved $40,000 and was able to withdraw that as part of the home buyers plan to buy my first home.

I am still paying that $40,000 back to my RRSP (almost done) but that first property went up in value $80,000 before it was built and I ended up using that equity to buy 2 more properties! Getting into the market early was key and using the RRSP home buyers plan I believe was a good tactic for me. Something to think about for David.