My friend Neal in Key West sent me this note this week:

“In August 2008 my oldest daughter was 18 and in her first year of college. I sat down and drafted a one page list of what I thought at the time were timeless pearls of money wisdom and gave her the list. It was based on 20 plus years of personal experience and education regarding money management. Anyhow, I came across it last night and after reading it, I still think it represents timeless personal financial planning wisdom. I thought of you and I’ve attached a copy for you. I’m sure it’s pretty basic stuff for someone who manages money for a living but I thought you might like to see what type of advice some parents give to their teens.”

Here was Neal’s list:

-Save first, spend later: have emergency savings, retirement savings, and investment savings plans.

-Pay yourself first, live on what’s left: use automatic investments direct from pay or checking account.

-Live within your means: don’t try to compete with others.

-Be frugal, but not stingy: avoid wasting money.

-Diversify between and within investment classes.

-To excel at something, immerse yourself: educate yourself on whatever you invest in.

-Swear off debt: borrowing money is like wetting the bed, it may feel warm at first but the cold reality hits in soon.

-Do what you love: find work in something you love and it’s more like a hobby than work; there are few things worse than getting up everyday and going to a job you don’t enjoy just because you need the money.

-Know where your money goes: track income and expenses closely and analyze the results periodically.

-Equities build wealth: it’s the best way to build wealth over time.

-Money can’t buy happiness.

-Don’t get too good at the wrong stuff: be good at something that will get you noticed and that has a future for either growth or advancement.

-You can’t reliably beat the market; use index funds and take the average.

-Take risks where you can within your personal risk tolerance: greater risk normally means greater returns, but not always.

-If you can’t afford to lose your investment, don’t invest, save.

-Tap the power of compounding: start saving early.

-Carry small amounts of pocket cash and use small bills to avoid feeling wealthy which may deter needless impulse buying.

-One credit card maximum: for emergencies only and then pay off the balance each and every month.

-You can’t fight the market so join it; use index funds.

-Buy low, sell high: have a target buy price and sell price with reasons for both, and stick to it.

-Don’t follow the herd: if it makes sense for you, do it even if it runs counter to the crowd.

-You don’t know more than the market knows: use index funds.

-The less you pay, the more you keep: look for low costs or fees and/or tax free or deferred investments.

-Always get it in writing.

-Leave your money alone: rebalance your investment portfolio once a year.

-Invest for the long term: stay the course.

-Be humble about what you don’t know: don’t be afraid to ask questions.

-Develop a healthy skepticism: if it sounds too good to be true, it probably is.

-Be careful of the people you trust since by definition they are the only ones that get the chance to screw you.

-Ignore short term market swings: avoid trying to time the market, you can’t.

-Nobody plans to fail, but many people fail to plan: make one and stick to it.

-Real estate has been the secret to getting rich for centuries.

-Avoid speculation: don’t buy anything you don’t want or sell anything you don’t have.

-You can’t get something for nothing.

-Character, not assets, counts the most in the end: don’t lie, cheat or steal.

I think it’s great. What do you think?