If you happen to only read one post on Gen Y Wealth, make sure this is it.
I have had the pleasure of getting to know financial planners/advisers from all over the U.S. New to the field as I am, I’m proud to say, that they know a lot more about financial planning than me.
Through their years of experience, they have seen just about every mistake someone has made in their 20′s.The only logical thing to do then, is learn from them.
So I contacted a few financial planners, asking them, “What advice do you have for students of young adults?” The responses I got back were nothing short of amazing.
Byran Sadoff – Sadoff Investment Management
Get their career in order. Paying off a little extra debt or saving a
little extra during their 20′s won’t have as big an impact as taking
care of their career.
This is all the basics, that recent college grad’s may not understand
about the real world.
Dress appropriately, show-up on time, work late, kiss butt, be
respectful, go above and beyond, develop a good reference or two,
network, take extra classes to learn and get more training, perhaps go
back to school for an advanced degree. Try to get some pay raises, and
try to get a promotion or two. Get your work experience, learn to deal
with people, learn how to communicate. Develop a story you can use when
interviewing to show your success. You need to show that you are
responsible and hardworking. Put your bad college habits behind you.
No matter what level you start at ($20,000 or $50,000) – getting a $5000
pay bump is huge (do the net present value of that and job increases
from that and 401k matches). Try to be in an industry and job that you
love – this way you can advance your career in your industry choice,
instead of starting over in your 30′s.
I think 20′s is still about learning and getting your feet wet. Of
course one should always try to live within their means, but getting
your basic work experience can pay huge dividends later.
Davis D. Janowski - The Investment News
Sign up for mint.com
Stuart Zimmerman - The Buckingham Family of Financial Services
Pay yourself first. There’s a certain beauty to compound interest.
Russ Thornton – Wealthcare Capital Management
I would encourage the Gen Y crowd, and people of any age, to focus on
the things they can control.
They can control their spending. They can control the food they put in
their mouth. They can control whether they go out partying 1 night/
week vs 3-4 nights/week. They can control their savings. They can
control the amount of debt the accumulate (or don’t accumulate). They
can control who they spend time around. They can control what they
read. They can control whether or not they spend part of their time
building a side business. You get the idea . . .
They can’t control how their investments will perform. They can’t
control what interest rates will do. They can’t control the value of
the dollar vs other currencies. They can’t control the actions or
habits (good or bad) of others.
Despite all this, it amazes me how many people, regardless of age,
spend so much time and energy thinking and/or worrying about things
over which they have absolutely no control.
Doug Simmang – Turtle Creek Advisers
The biggest asset a 20 something has is the most valuable thing on
earth – more time. If used wisely with planning, disciplined
investing, and compounded returns, huge amounts of wealth (and
freedom) can be created eventually. Waiting to invest will cost an
individual more to accumulate/grow the same amount. So, first, spend
less than you earn and invest the difference. Create a emergency cash
reserve. Be disciplined by picking a specific percentage of income to
invest systematically (no matter what). Buy equities for growth.
Phillip Selden – United Advisors Wealth Management
My piece of advice for 20 Somethings is the same that I would give to my
children and grandchildren:
“Always do just a little more than you have to. Always do
it just a little bit better than expected.”
If they follow this advice consistently in everything that they do,
every group they are a part of, every relationship that they have, good
things will happen.
George Papadopoulos -The Fee Only Planner
First, I would concentrate on getting a good education in something you
enjoy doing that will provide you with good income with potential [for
Whatever you do, work a little harder than the next guy and always be
connected by getting involved in your chosen profession/industry. Never stop
Always have some money laying aside in the bank or an online savings account
for emergencies. As you will find out, [bad stuff] does happen when you
least expect it.
Avoid carrying credit card balances, they are truly evil!
If you have a 401(k) at work, sign up right away and maximize your
Start saving for a house down payment. Renting is also okay, too, until you
have a 20 percent deposit for you first purchase. And whatever you get, do
not buy more house than you can afford!
Marry well. (Just kidding…well, not really.)
Never ever spend more than you earn!
Always save, at a minimum, 10 percent of what you earn. 15 percent is
better, 20 percent is super.
Don’t blow your money in a brand new sports car. Buy one a little used and
have two or three dealers compete against each other on the price you got on
the Internet. And, don’t fall in love with those wheels, they are just
When you do have an investment portfolio, always diversify with no-load
mutual funds, preferably cheap index funds and ETFs.
Never believe that there are gurus who have “proven” systems who can make
you rich, they are full of it and are looking for suckers to separate from
Brian Plain – Oak Park Planner
While you might have a master plan, the world has a funny way of changing it. Prepare yourself for whatever surprises might arise as best as you can. Build an emergency fund, avoid bad debt, save for the future. Focus on figuring out what you DON’T want to do with your life and you’re much more likely to find what you’re looking for. Enjoy the ride, because your 20s will be over before you know it!
Bill Winterberg – FPpad
Add diversity to your income potential through life-long education.Most adults work in a career that is in no way related to their undergraduate degree. Traditional career paths lead to over-dependence on one job function in one industry. After earning an undergraduate degree, graduates should learn skills to manage small business accounting, market to a large audience with a low budget, and think of ways to sell services that are infinitely scalable. This allows a young individual to cross over into industries that are growing (e.g. Green technology) while traditional industries (e.g. Finance) are contracting.
Nathan Gehring – Living Financially Aware
Above all else, understand the following. The messages of consumerism and materialism we are so often taught run counter to your best interest. They do not create happiness nor financial wellness. Instead focus on what brings true joy to your life and what you highly value. Then create a budget designed to allow you to focus on that joy and value. Then live…don’t worry about what others have or achieve, just live the life you value and brings you joy.
Now I ask you the same question, “What financial advice do you have for young adults?” Let me know in the comments.