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Being a millennial, what do you struggle with the most when it comes to finances? What do you wish you knew in high school and college concerning personal finances?
How are YOU with finances?! Do tell...
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7,289 Posts
Well, I'm Gen Y I think it's called.
I learned personal finances on my own mostly, school just didn't teach it. Even college was bad at it, and I took accounting classes, and even those were not really instructive in this area.
They tell you how to make a stock entry on the books but not whether you should buy a stock.
Stock market naivety, Enron causing its employees to lose their retirements, ect. could all be prevented with proper education.
Some basics concerning 401k and IRA retirement investing:
- Stock brokers give crap advice... yes, sometimes it could be very good, but they operate off commissions and fees, they are -not- financial advisers, big difference.
- Diversification.
- Owning individual stocks is bad for 95% of all people out there. Owning specific sectors of stocks is also bad if they are weighted beyond a diversified distribution, like an improved S&P weighting to lessen exposure to financials is an intelligent distribution. What this means is, most people should own an S&P 500 Index fund or ETF of the S&P 500, just so long as fees are low. If you intend to surpass the stock market in returns with a different mix of diversification, you should be able to prove why you're smarter than 90% of sophisticated investors who manage funds, ect, because most of those guys can't beat the S&P 500 historically.
- Reinvest dividends.
- Re-balance portfolio to fixed income and gold/silver toward retirement. Gold and silver is good because the currency will collapse one day, and it probably wont matter too much if you're young because you can just get a new job at new wage prices, but if you're retired, your currency denoted in any type of treasury, bond, or other fixed income like a CD will devalue greatly.
If gold's value denoted against other assets does not change, and the currency doesn't collapse, you would still expect to receive 3% a year off gold and right now only 1 to 2% off of fixed income. The reason being inflation is 3% a year, and if gold's value doesn't change, it is increasing 3% a year when denoted in a currency. There is also such a thing as a TIPPs which is an inflation adjusted treasury instrument, but the problem with those is the government lies about inflation, so you could have 30% inflation and we would be lucky if the government reported 10% on the CPI.
Concerning Borrowing Money
- Don't. Short-term car loan (1 year max) if you *must* have a vehicle and you couldn't save in advance for a car... but why couldn't you save in advance? You should have been able to.
- Don't do student loans, it's not worth it. Tour a different country and go to college there if you have an issue paying inflated US college prices out of your pocket. It's great that you can borrow the money, but today, we're basically paying a 20 to 30% premium on college prices because the government has inflated the market by paying any old price at any old college, and giving us free money to do it.
- Mortgages are dumb, I think. Live in a cheaper dwelling or save up for a house if your income is good.
I learned personal finances on my own mostly, school just didn't teach it. Even college was bad at it, and I took accounting classes, and even those were not really instructive in this area.
They tell you how to make a stock entry on the books but not whether you should buy a stock.
Stock market naivety, Enron causing its employees to lose their retirements, ect. could all be prevented with proper education.
Some basics concerning 401k and IRA retirement investing:
- Stock brokers give crap advice... yes, sometimes it could be very good, but they operate off commissions and fees, they are -not- financial advisers, big difference.
- Diversification.
- Owning individual stocks is bad for 95% of all people out there. Owning specific sectors of stocks is also bad if they are weighted beyond a diversified distribution, like an improved S&P weighting to lessen exposure to financials is an intelligent distribution. What this means is, most people should own an S&P 500 Index fund or ETF of the S&P 500, just so long as fees are low. If you intend to surpass the stock market in returns with a different mix of diversification, you should be able to prove why you're smarter than 90% of sophisticated investors who manage funds, ect, because most of those guys can't beat the S&P 500 historically.
- Reinvest dividends.
- Re-balance portfolio to fixed income and gold/silver toward retirement. Gold and silver is good because the currency will collapse one day, and it probably wont matter too much if you're young because you can just get a new job at new wage prices, but if you're retired, your currency denoted in any type of treasury, bond, or other fixed income like a CD will devalue greatly.
If gold's value denoted against other assets does not change, and the currency doesn't collapse, you would still expect to receive 3% a year off gold and right now only 1 to 2% off of fixed income. The reason being inflation is 3% a year, and if gold's value doesn't change, it is increasing 3% a year when denoted in a currency. There is also such a thing as a TIPPs which is an inflation adjusted treasury instrument, but the problem with those is the government lies about inflation, so you could have 30% inflation and we would be lucky if the government reported 10% on the CPI.
Concerning Borrowing Money
- Don't. Short-term car loan (1 year max) if you *must* have a vehicle and you couldn't save in advance for a car... but why couldn't you save in advance? You should have been able to.
- Don't do student loans, it's not worth it. Tour a different country and go to college there if you have an issue paying inflated US college prices out of your pocket. It's great that you can borrow the money, but today, we're basically paying a 20 to 30% premium on college prices because the government has inflated the market by paying any old price at any old college, and giving us free money to do it.
- Mortgages are dumb, I think. Live in a cheaper dwelling or save up for a house if your income is good.
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2,167 Posts
What I struggle with most is the day-to-day stuff; I'd forget without reminders on my phone/computer. My solution is to automate as much as possible - I have most bills on automatic payment, so I don't need to manually authorize the payment each time. I still check/monitor and have email alerts, but the payment itself is automated. So that's one recommendation. ;D
I'm good with budgeting and making sure that my actual expenses track closely to my budget. I don't have issues saving up for stuff, but it helps that I'm not very impulsive, at least not with money, lol. I would recommend a spreadsheet tool for tracking your budget and expenses. I use Excel, but it can be anything, even paper. There are many online budgeting services too.
The high-level/longer-term financial management, overall investing strategy, etc, is the part I actually find interesting, lol. I researched that stuff while in college. I would recommend this e-book (it's free!):
If you can: How to Get Rich Slowly - ETF.com
http://www.etf.com/docs/IfYouCan.pdf
This is highly location-dependent, but, if you haven't already, look into a 401(k) plan (in the US) if your employer offers one, or into specialized accounts such as IRA/Roth IRA (again, this is US-specific). Similar to RRSP and TFSA in Canada. (Those are the only two places I've lived as an adult, so idk how it is in other places.)
All this said, I think the biggest factors in financial security are a decent job(s), your other obligations (debt, medical, etc), your area's cost of living (mine's low), etc.
I'm good with budgeting and making sure that my actual expenses track closely to my budget. I don't have issues saving up for stuff, but it helps that I'm not very impulsive, at least not with money, lol. I would recommend a spreadsheet tool for tracking your budget and expenses. I use Excel, but it can be anything, even paper. There are many online budgeting services too.
The high-level/longer-term financial management, overall investing strategy, etc, is the part I actually find interesting, lol. I researched that stuff while in college. I would recommend this e-book (it's free!):
If you can: How to Get Rich Slowly - ETF.com
http://www.etf.com/docs/IfYouCan.pdf
This is highly location-dependent, but, if you haven't already, look into a 401(k) plan (in the US) if your employer offers one, or into specialized accounts such as IRA/Roth IRA (again, this is US-specific). Similar to RRSP and TFSA in Canada. (Those are the only two places I've lived as an adult, so idk how it is in other places.)
All this said, I think the biggest factors in financial security are a decent job(s), your other obligations (debt, medical, etc), your area's cost of living (mine's low), etc.
Baby Boomer here. It would fill a book...
It's Basic Econ 101: DO NOT spend more than you bring in.
Do not live beyond your means. Don't worry about "keeping up with the Joneses" and more to the point: NEVER be the Joneses."
I would agree with most of the advice above, but would disagree on the student loans and mortgages, especially if
1. You're studying something you REALLY enjoy and
2. It's a growing occupation in the Occupation Outlook Handbook. :smile:
I also had a mortgage (now paid off) and now I own the house. Never buy a "starter McMansion"--just what you need and can manage.
It's Basic Econ 101: DO NOT spend more than you bring in.
Do not live beyond your means. Don't worry about "keeping up with the Joneses" and more to the point: NEVER be the Joneses."
I would agree with most of the advice above, but would disagree on the student loans and mortgages, especially if
1. You're studying something you REALLY enjoy and
2. It's a growing occupation in the Occupation Outlook Handbook. :smile:
I also had a mortgage (now paid off) and now I own the house. Never buy a "starter McMansion"--just what you need and can manage.
Joined
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8,660 Posts
Currently I have no debt and a net worth around 6 figures (well need to check my 401k; as of last time I checked it). I wish I would have invested more and am currently looking into start investing on my own. Otherwise, I handle my finances well and don't really budget (I'm just a cheapskate who spends way less than I earn). Overall, my finances are stress free. I just need to start investing and looking to build some more wealth other than the super conservative approach I've been taking.
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2,389 Posts
Actually, I would regard my finances as one of my strengths rather than one of my weaknesses. I think some self-discipline combined with a little knowledge of finances is really all that's needed to be at a decent point financially speaking. Just following tips like this can make a dramatic difference in a person's finances:
1. Don't spend more than what you make.
2. Avoid carrying a balance on your credit cards
3. Minimize impulsive buying.
4. Save money whenever possible so you don't have to live paycheck to paycheck.
5. Avoid debt unless it's absolutely necessary.
I think something everyone should realize is you don't have to win the lottery, have rich parents or have a high-paying job to be financially secure. Just stopping with the frivolous spending can be the first step to gaining some financial stability.
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9,647 Posts
I have one of those goal savings account things and right now I'm 800 dollars behind :-/
I'm not *terrible* with my finances but I haven't been able to meet those little goal things ever since I started. Dx
I'm not *terrible* with my finances but I haven't been able to meet those little goal things ever since I started. Dx
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