When I graduated college (over 10 years ago – oy!), I had about $10k to my name – $8k of which went into buying my first car (for cash, used.) While I was very fortunate to not have any debt, I also moved far away from home to one of the most expensive regions to live in the world. Over the last 10 years, I have increased my personal networth to nearly $400k. While my path requires a significant amount of privilege, I’ve learned a lot about money along the way that anyone can use – whether you’re in debt or out of debt. Here are 10 Trips for New Grads to kickstart your path to financial freedom: Continue reading
Recently a friend of mine from childhood, who now lives in a different part of the state, was in town on a road trip and stopped to have dinner with me. While we grew up in the same middle class neighborhood, her family was definitely more “middle class” versus mine which was “upper middle class.” So when she asked me for some financial advice due to a potential windfall from a recent family death, I paused before sharing my typical spiel.
Said friend currently owns property with a mortgage (her parents helped her with the downpayment), but otherwise lives paycheck to paycheck. She makes $60k a year and to her that’s a lot (I did not mention that my income is north of $150k right now, but that’s neither here nor there because that’s a short-lived situation anyway.) She mentioned that she was considering investing in Primerica Financial Services, which I hadn’t heard of before, but sounded a bit like a god-awful pyramid scheme. She acknowledged that it sort of a pyramid scheme, but she was interested in it anyway. If you tell me that and ask for financial advice, I’m going to give it to you.
My advice was fairly simple. I asked her if she had any retirement savings and she said yes, she had invested in 401ks at other jobs before, up to the match (great) but then went on to tell me that she had no idea where any of these accounts were. “Is there one 401k account somewhere that I can just call up?” She asked. I tried to explain to her that she should call her old employers, locate where her accounts are, and ideally roll these over into a Vanguard IRA. In the meantime, if she were to get the small windfall, to invest this in a Roth IRA in order to continue saving for retirement. She wanted access to the money sooner than that, so I recommended a taxable Vanguard STAR fund, but to consider putting it into a Roth anyway and forgetting it ever happened.
When she was asking me about stocks, it became apparent that she understood practically nothing about personal finance. It also became apparent to me that I’ve learned quite a bit in the last 10 years of my life since starting this blog – not enough to be a CFP but enough to hold my own in advising on basic money moves. I enjoyed providing advice and helping her, but I have a feeling she isn’t going to take a bit of my advice. Oh well. At least I tried.
Not everyone has to go to an Ivy League school or the equivalent to be successful. However, there are some simple steps you can take to financial success in the next 5 years of your life, and they start now, when you’re in college. Here are 10 things I wish I knew when I was in college, that I’ve learned over the years:
1. Get Work Experience Now, Not Later
The number one key to success is being able to get your foot in the door. I learned this the hard way after graduating from college with a few internships under my belt, where I received great experience, but none of them were impressive enough for an employer to pull my resume to the top of the pile. After college, it was challenging to get an internship as most were unpaid and required “college credits” to obtain. I finally got my footing with a journalism internship that didn’t have those requirements, but I also spent six months after graduating college working under minimum wage to build up my professional experience. I’d recommend getting as many internships as possible while you’re in college, ideally in a company where you won’t just be doing just the dirty work. Internships are also one of the few opportunities you’ll have in life to build up a solid pool of references who can say wonderful things about your work ethic despite only three months on the job, and no one will question your short tenure – because that’s the point of an internship. Continue reading
My parents never taught me the value of a dollar beyond it costing any sense of household calm that might have been. Today, they constantly complain about not having enough money, blaming the stock market for its poor performance over the last decade – which I find ironic since my father spent his career figuring out investment risk as a pension planner for major corporations. If he couldn’t see the crash coming, who could?
I definitely don’t turn to my parents for money advice, but other than the wild west of the Internet and self-help books with a lot of contradictory information, I don’t have one trusted resource to discuss the ins and outs of personal finance with. Not that most people do – I just wish I had someone who I could confide in about my financial concerns and questions. Continue reading