Millennials and Money: Investing for Success
Wednesday, February 10, 2016
There's a lot of talk about millennials in the media - their influence on politics, what attracts them to certain areas, how they prefer to work, etc. Typically comprised of those born in or since 1979, this large section of the population has just as many quirks and preferences as any other age group.
As a financial planner, the advice I give to my clients largely depends on their preferred life style, future goals, and current situation. As you can imagine, advising a 50-something and a millennial require a different set of expectations and understanding.
The most common points of advice I give millennials tend to center on the state of economics in the United States, the age group's relation to older generations, and its tendency to interact and engage with current events.
Here are a few key points I often cover with younger investors.
- Be Self-Reliant: Unlike older generations who planned on Social Security as a significant source of retirement income, you will most likely be responsible for providing your own retirement funds. Few occupations come with pensions and wise investors of all ages know not to count their Social Security eggs before they hatch these days.
- Be Prepared: As Social Security funding dwindles and life expectancy increases, there is a good chance you may have to financially support your parents as they age. We often think of providing for our children, but it's important to consider your parents' situations as well.
- Be Savy: At a minimum you should be taking advantage of your 401K offered through your employer. You should put in the minimum investment to get the employer match and consider contributing more, if possible. As you earn raises, remember to up your contribution. You won't miss the money you never had in the first place.
- Be Proactive: The quicker you begin investing increases the potential money you will have available in your future. The earlier you start the better your chances are to have a larger retirement nest egg. Don't delay!
- Be Engaged: If you have questions, call me or another advisor. We will talk with you about your specific goals and current financial situation. The convenience and accessibility to online investing tools are great, but these logarithms can't understand you as a person or talk you through specific needs and situations.
- Be Holistic: Meeting with an advisor gives you access to experts such as CPAs, financial experts, legal and tax counsel, etc. Investing is only one portion of your overall financial health.
- Be Patient: Commit to the long term. Don't make adjustments to your investments as a reaction to a bad headline.
All in all, I have found millennials to be financially wise beyond their years. With these tips and tailored guidance from a trusted advisor, many millennials can take steps now to ensure a comfortable and secure financial future.