The most important point is: if you value your future, invest in it.
Instead of having as much fun now spending your time and money on lots
of fun stuff, save more of your money, and spend more of your time
working, either for someone else, on ventures you think will pay off
later, or learn marketable skills.
On saving money, it is much less important how exactly you save/invest
than how *much* you save/invest. Index mutual funds avoid trading
losses, and if you can avoid taxes, such as via IRAs, all the better.
Avoid making bets with other people, and everything but buying an
average such as an index *is* a bet. One of you will lose the bet and
the broker will take a cut. Are you really sure they don't know
something you don't? (Raw bets are a great way to demonstrate
confidence and to create a reliable consensus, but they can be a lousy
investment.)
When investing in personal skills and new ventures, rather than in
financial markets, there is less market arbitrage and so a better
chance that your new idea really is better. But try to be honest with
yourself about the degree to which you just enjoy this "investment"
activity, vs. it really having a big chance of paying off well.
Opening a new place to eat, or taking flying lessons, are mostly done
for the fun of it.
Lots of the Asian tigers have really high savings rates. They may not
know as much about the future as American engineers do, but they know
that they care about it a lot.
Robin D. Hanson hanson@hss.caltech.edu http://hss.caltech.edu/~hanson/