Once you become an adult there is a lot you are expected to know in terms of managing your finances.  You are expected to have credit or better yet good credit.  Bills are expected to be paid on time.  There is an expectation that you should be good with money.  There are certain accounts that you should know what they are and have in your name; accounts like checking, savings, and retirement accounts.

At some point you come to the realization that money in fact does not grow on trees and you must work for every dollar you get.  Just as you saved every little bit of money as a kid to buy things, so must you do in adulthood.  Things tend to happen where you need to use cash that you had not planned on, which means you must set stuff aside for a rainy day.  At some point in the future you will be expected to live for the rest of your life off of what you were able to accumulate.  With so many things to learn about managing personal finances, lots of adults just have to pick things up as they go.  

It is often said by people that if I knew then what I know now, that they would be so much better off.  So it got me to thinking about what would have been beneficial to me as a youngster in terms of learning about finances.  Below are a list of some of the things that stood out.

Cash is king.  Having cash gives you a certain amount of flexibility, and even allows you to get certain discounts.

Having no debt is a good thing.  Having no debt and no cash is a bad thing.

Planning for retirement and putting away funds should be done as soon as possible.

Saving money is a must.  The best thing to do is automate savings so that way you do not have to worry about setting funds aside.

Its best to start learning about investing early on, that way you have more time to benefit from success or recover from lossess.

Credit can be a great tool if used wisely.

Money is also a tool and must work for you.


Lets Talk Savings


Today kicks off America Saves Week, which is sponsored by America Saves.  From February 22nd until the 27th different topics will be discussed to promote savings as a goal through automation.  Below is a list of the savings strategies that will be promoted each day.

Monday February 22nd: Save Automatically
Tuesday February 23rd: Assess Your Savings
Wednesday February 24th: Save for Retirement
Thursday February 25th: Save for Emergencies
Friday February 26th: Saving at Tax Time
Saturday February 27th: Paying Off High Interest Debt

You can follow the conversation on Facebook or Twitter by looking up America Saves @AmericaSaves.  The official hashtag to follow is #ASW2016.  One of the cool things that is happening is the opportunity to win $500 toward your savings goal.  To enter just tell @AmericaSaves what you are saving for using a photo and #imsavingfor, more info can be found here http://ow.ly/Ywl6K .

                                                                  Things to Consider about Savings

Do You Have Enough Saved

Determine how much is enough. Make a plan to get more saved.  Then stick to that plan.

Finding Extra Money

Reduce  your current expenses.  Lots of people typically have at least one thing they are paying for and not using. You can also sale items no longer needed.  If possible look for additional income sources as well.

Make The Sacrifice

What can you go without?  It helps to figure out what is worth making a sacrifice for.  Once you have something worthy of saving for it helps you achieve your goal.

What Are You Saving For?

Consider all the areas where you need to be saving.  Some common things people save for include: debt, healthcare, retirement, education, and emergency fund.

Don’t Live as A Miser

Be frugal, but don’t overdo it.  If you overdo your savings you may deprive yourself of many things which you enjoy.  Depending on your financial situation, it could be appropriate to take an aggressive approach toward saving.  Ideally you want to find balance between your savings and your lifestyle.

Make Automation an Everyday Thing

If you save automatically you won't miss it.  The balance will continue to increase, and you won't feel the pressure of trying to save on a regular basis.  Automation can be done with a dollar amount or a percentage of earnings.  A benefit of automation is that it helps to ensure you will have funds available during an emergency.

It All Adds Up

The amount does not matter, so much as the habit of saving matters.  Small amounts will grow over time.  A good place to start is with your spare change.  It might surprise you just how much your spare change adds up to.  Use the momentum you get from saving small amounts to increase your savings rate.

Not Sure How Much to Save

This is common for a lot of people.  Ideally you should save as much as possible.  Consider how you live now and how you want to live in the future.  Try to consider how the amounts needed will adjust based on different life stages.It is a good idea to at least have enough to cover a few months of expenses in case you get in a bind.

Consider Using a Savings Chart

A savings chart can be a great idea, because it provides a specific dollar amount to save over time.  By using a savings chart it is easy to track the progress you make.  It gives you an expected outcome at the end of some period of time, like over the course of a year.  It is also easy to adjust the amount being saved depending on how much you can personally allocate toward your savings goals.

I watched an interesting movie the other day, titled The Big Short.  The movie was about the Housing Bubble that existed within the U.S. in the mid 2000s.  It takes a look at the landscape that was created by issuing sub prime loans, creating crafty financial products composed of underlying mortgage products, and the unraveling of it all.

The movie paints a vivid picture that shows just how bad things had to be for something no one thought was possible to happen, the housing market collapse.  People got lots of loans they could not afford, sometimes with nothing down.  Which means people bought more house than they could afford, then they got underwater so the house was worth less than they owed.  Lots of people ended up losing their homes.

Banks also created fancy investment products like Collateralized Mortgage Obligations (CMO’s).  A CMO is “A type of mortgage-backed security in which principal repayments are organized according to their maturities and into different classes based on risk. … Income received from the mortgages is passed to investors based on a predetermined set of rules, and investors receive money based on the specific slice of mortgages invested in (called a tranche)”.

The movie shows that after all the best mortgages started to dwindle in number, that subprime mortgages began to be included.  The real issue that came from having lower quality mortgages included in these new investments is that they were still being highly rated.  Investors look at ratings to make sound decisions, so if lots of those ratings are off investors are picking investments based off of bad information.

6 Key Takeaways from the Movie

1. No such thing as a safe investment.
2. Don’t go along with popular investing.
3. If an investment seems off it could be. 
4. If is sounds to complicated to invest in it is. 
5. People don't always learn from past mistakes. 
6. It is of vital importance to do your own research.  

7 Things to Consider with Your Portfolio

1. Investments can go down to zero. 
2. Look at what investments are composed of.
3. Do you know the top investments you have?
4 Is there overlap in your various investment accounts with the same investments?
5. Do you have too much exposure somewhere?
6. When you bet the whole farm you win big or lose big.
7. Too much company stock can be a bad thing, because if your company does bad so will your    investment. 

CMO Definition- Investopedia  http://www.investopedia.com/terms/c/cmo.asp#ixzz3zK2htzmj

So its the beginning of the year, which means its a good time to reflect on your financial outlook. Whether things went great or bad in 2015 the good news is that you have a year of data to take a look at.  In terms of saving, investing, planning, and executing on your plan how did you do?  If you nailed the execution of the financial plan you laid out, then kudos to you.  Also if you have know idea what a financial plan is, then its not to late.  No matter what happened last year everyone still has to work on being successful with their finances this year.

Take a look at what went well last year and what did not.  Has there been any significant changes in your financial picture that need to be addressed.  Some major changes include: job change, income fluctuation, relocation, health costs, and family additions.  Now given the changes that occurred you must consider how they will affect your finances.

In terms of spending, take a look at the purchases you made to see if you need to cut back in some areas or increase in others.  If saving money is a priority look at what your expenses are to determine what you could reasonably save.  Debt can hinder financial progress so look for ways to lower debts so that funds can be allocated to other financial priorities.  Investing is great in the long run because of the potential returns offered, so consider what you can reasonably invest.

Reviewing your investment performance from last year will tell you an interesting story.  Take a look at the performance to see what investments worked well for you.  Most investors have a mix of investments or asset allocation that will work best for them given the priorities and things they want to accomplish financially.  Review your investments to see if your asset allocation shifted during the year and needs to be addressed.

Now with all this new found knowledge you must take action.  The first thing to do is to determine what your financial priorities are.  Then you must determine what your commitment to each priority will be.  For instance, how much will go to debt, savings, investing, education, emergency fund, future projects, etc.

Lastly you must consider the professional help that may be available to you.  Your bank, place where you invest and job may offer tools that help you to accomplish your financial goals.  Some benefits of speaking to your bank may be getting access to special rates or free financial coaching.  Talking to the place you invest may reveal educational opportunities or insights into your accounts.  Speaking to your job may make you aware of certain workplace benefits you are missing out on that could save you hundreds, maybe even thousands of dollars. 

  • So you have that amazing career, the one that you have worked tirelessly for. Great, but what about your finances.  Many professionals experience a sort of tunnel vision in climbing the corporate ladder, so much so that they neglect to properly invest.  You have a 401k, awesome, but what about
     your health, insurance, and other miscellaneous needs.  Speaking of 401k, are you even sure that you are on track to reach a comfortable retirement.

    Many professionals make a substantial salary, without having
    adequate savings or investments.  The point of growing in your professional life should not simply be to make more in terms of income, it should be to maximize the income you make regardless of what it is.  Recently I became aware of a story circulating the internet about a guy named Mr. Earl, who works
    as a parking attendant.  According to the story Mr. Earl has never earned over $12 dollars an hour, but has managed to amass a net worth of over $500,000. If someone with limited income is able to build their net worth, then what is your excuse.  Link to the story: https://www.youtube.com/watch?v=smPWDGT-VFs.

    Success with your finances really comes down to having a plan.  The same diligence that you place into growing professionally can be applied to how you manage your finances.  With so many resources available to make you more informed about your finances you are bound to find something that works.  Try looking at a book on personal finance, participating in a webinar, taking a financial challenge or using an app to stay on track.  If you have no idea where to start, seeking the help of a professional like a financial planner can be beneficial. Below are nine things for professionals to consider related to their finances.
    1. Do you have an emergency fund?  Not having an emergency fund can put a serious damper on your finances.  Professionals tend to have money tied up in investment accounts or other assets that are not easy to liquidate.  So when an emergency happens if you have to tap into invested assets its like taking a double hit.
    2. How are you managing debt?  Debt is something that can deteriorate potential profit from investing and sap potential savings.  Also carrying too much debt can be damaging psychologically to an individual as
      it begins to feel like an insurmountable hurdle.
    3. Have you talked to your 401k provider or broker?  Lots of planning conversations can be had free of charge.  Also speaking to someone at the place you invest allows you to be shown new tools that can help manage your finances.
    4. Are you taking advantage of a company match?  If you are not taking advantage of a company match then you are passing up free money.  By contributing an equal amount to what your company offers you effectively double your investment at half the cost to you.  By contributing more you essentially put more of
      your money to work, and give yourself a better chance of being successful in retirement.
    5. As your income rises how do you plan to use the increase in pay?  Most people who have pay increases over the years tend to elevate their lifestyles.  They put the extra money toward new homes, cars,  vacations, etc.  Nothing wrong with elevating your lifestyle, but as income rises so must the proportion of your money going toward things like saving, investing, and debt repayment. 
    6. If you have a spouse, ask yourself how their financial decisions affect you.  Some couples choose to plan separately and find success, but to do so you must know how your spouse manages their financial
      obligations.  When you come together and have open discussions about the finances it is easy to see if
      something is off and needs to be addressed.  When managing finances apart something can go for weeks,
      months or even longer before being detected.
    7. If you have children are you saving for their education?  The earlier you start the better your chances will be to hit those future college financing costs.  You should never prioritize your kids education over retirement needs, they can get scholarships, grants, and loans to cover expenses.  Starting early to address your children's future college financing costs can help ensure you will not have to prioritize their college costs over your retirement needs.  
    8. Make a list of your short term and long term financial goals and assess whether you are on track to meet them.  Most likely you have ideas of what you want to accomplish professionally, and you have probably written them down as well.  By writing something down it becomes real, and a reminder of what you intend to do.  The same diligence you take to hitting professional milestones can be applied to financial goals.
    9. What does your estate plan look like?  If you have no idea what an estate plan is then guess what you need to figure out.  You spend your whole life building assets and when the time comes they should be handled in the manner you intend.  Something as simple as updating beneficiaries on your accounts takes less than five minutes, but would save tons of time down the line.

    The other week I had the pleasure of attending a conference called FINCON.  At the conference there was a diverse group of companies and individuals focused on providing digital content related to finance and investing.  The thing that connected all attendees was that in their own way they were working to create something that would educate people or provide a solution to a personal finance issue.  With so many powerful takeaways I want to share some of the main ones that you can relate to your personal life.

    Its Ok to Have Made Mistakes

    Chances are that if you are of adult age you have made your share of financial mistakes.  Nobody likes making mistakes related to their personal finances, but the lessons you learn become critical to your growth.  If you are wise you learn from your mistakes or the mistakes of others and adopt better behavior.  The issue most people have with mistakes related to their finances is they dwell on it and allow them to consume them in pity, doubt, and stagnation.  By allowing yourself to face the reality of the mistakes and hurdles your must overcome you may begin to move past your mistakes.

    It Pays to Have a Plan

    With so many competing financial demands todays professional must prioritize their financial choices.  Part of prioritizing financial choices includes determining what are needs vs wants.  The costs of not having a plan really show up in the time, money and resources that you devote to certain goals.  Some things to consider when making your plan are timeframe, reason for setting up priority and risk if no action is taken.

    Financial Literacy Is Not a Luxury

    When it comes to investing and personal finance what you do not know can hurt you.  Mistakes can eat away at your savings, and take years to overcome.  Financial literacy must be made a priority.  Today too many resources exist to acquire knowledge.  Tons of financial bloggers are creating content everyday that relates to things in your life.  Also there are videos, books, webinars, and professionals to help.  For people who are able, seeking the help of a financial professional can make a world of difference.  Some people may look at the costs of working with someone like a financial planner as an expenses, but it should really be treated as an investment.  Over time the money saved, the targeted advise, and objective look at your financial situation a planner provides will be worth the investment.

    Surround Yourself by People Focused on a Similar Mission

    Having a group of people around you who can relate to your situation is critical.  When you are going through financial obstacles sympathy does not help, but empathy can move you forward.  Consider you have a goal to save more or pay down debt, but all your friends are compulsive spenders.  The association with so many people who are operating counter to your goals will become a challenge for you to be successful.  On the other hand if you associate with people also looking to save or payoff debt then you can share best practices or hold one another accountable.

    Celebrate Your Milestones

    To often people get so focused on the big picture that they forget about all the little pictures.  Lets say you are swamped in debt, with credit card debt, a mortgage, car note and student loan payments.  You can get so focused on the total debt load that you forget to celebrate small milestones like paying off a loan or an outstanding balance.  That's a big mistake, you want to acknowledge each milestone you pass as it helps to build momentum toward your end result.

    Do you have an emergency fund? If so how long is it expected to last? This is important because you never know what unexpected circumstances can pop up.  A flat tire or blown water heater out the blue can wreck havoc on your finances.  Once you begin investing some investments will have fees associated with taking funds out early.  So it is best practice not to view your invested funds as readily available cash.  

    How much can you comfortably afford to put in investments?  Take a realistic look at your income and expenses to determine what your disposable income is.  From the amount of disposable income pick a reasonable amount to invest.

    How much money are you comfortable losing?  Really consider this question.  Investing involves lots of different risks.  It is likely you will lose some money investing, especially at the beginning.  So if based on your comfort you would be ok losing $2,500, do not go and invest $5,000.  You have to be conscious at all times that the money you put into an investment can drastically lose value.

    You may get the highest return by paying off debt.  If you are in debt you would have to make a substantial amount on your investments for it to be worth not paying off your debt sooner.  Lets say you have a credit card, which most likely you do, and that card has a high revolving balance.  At what point does it make sense to put money into investing as opposed to paying down the card sooner.  I looked at bankrate.com to see what the average rate was for a low interest credit card, and that rate was 11.62%.  So if your investment will give you a return of 8.5% you would achieve a higher return by paying off the debt.  However, if your investment were to provide a 15% return then its worth it because you have enough to pay the debt, and money left over.

    Are you contributing to a 401k or workplace retirement plan?  If you are not contributing to a retirement account what is holding you back?  Putting money in your 401k or workplace account has a lot of advantages.  In general the money goes in pretax so it does lower your current income.  You can also make larger contributions to these tax advantaged accounts.  Which means that you pay taxes on contributions and earnings when you withdraw the money.  Some employers even offer matching contributions to workplace plans, which equates to free money for you.

    Are you taking advantage of the company match?  If you do not take advantage of the company match you are hurting your chances of being successful in retirement.  Putting money into a workplace plan like a 401k is one of the best moves you can make as an investor.  The money comes straight out of your check so you do not have time to miss it.  I have seen some companies offer company matches as high as 7%, and it could be higher at other companies.  Of course you can go above the company match, but just by doing the full match you are doubling your investment amount at half the cost to you.

    Be aware of low cost trading.  It is good to have access to cheaper trades, but if used wrong can erode profits from excess trades.  Lots of new investors forget to factor in the cost of commissions when making decisions on what to buy or sale.  Where the loss can really show up is if the investment has gone down in value since purchase, it gets further lowered by the cost of trading (commission paid).

    Investing purpose, and what you hope to accomplish as an investor.  By having a goal in mind it is more likely that you will accomplish it, and it lets you know if your plan is on track.  Examples of investment purpose include: saving for retirement, saving for education, or generating a higher return than leaving money in cash.  

    Are you prepared to be consistent in your efforts.  When you start to invest its like you enter in a sort of relationship that must be nurtured.  Your investments will take time, money, and consideration from you to grow.

    Think before accepting random specific advise.  Sometimes people genuinely mean to be helpful when they offer advise.  But you must take specific advice into consideration based on how it will apply to you.

    Understand that you can take on more than enough risk and less than enough risk.  As an investor it is important to get a grasp of what your risk tolerance will be.  By risk tolerance I mean you willingness to accept certain levels of risk in order to generate a return.  The higher the risk the greater the potential return.  If you take on very little risk you run into a situation where your investments may have limited growth, and by taking on too much risk you run the chance of losing more than you may be comfortable with.

    Knowing what you know about yourself do you trust yourself to manage your money?  Seriously though, you know you.  You know your shortcomings with money, your ability to plan, and whether you have an interest in being a master in the realm of investing.  Based on what you know, do you trust yourself to manage your money.  If the answer is no, it is ok to seek help.

    Ask Questions
    Never underestimate the importance of asking questions, especially when it comes to  investing.  To often people do not take time to be curious about the ins and outs of their financial decisions.  Countless people throw money into investments and accounts without knowing if those actions are in their best interest.  Even if the questions being asked are posed to yourself, answers must be achieved.  Some things to consider when setting funds aside to invest include: what is the purpose for these funds, what is the timeframe for investing, how would you feel if you lost the majority of these funds, what is your expected outcome, and is this decision in your best interests.

    Develop A Plan
    The stock market and world of investing can be unforgiving for the unprepared.  It is never a good idea to just simply invest money without having a plan for the funds to be maximized.  When it comes to the world of investing if done wrong you could lose your life savings in a matter of moments.  The idea is not to focus on potential losses, but on having a plan in place to mitigate losses.  Prudent investors are actually able to benefit when investments in the market begin to plunge, its a concept known as buy low sell high.  However people who have not put a plan in place tend to panic when certain declines or market events ensue.  The beautiful part about having a plan is that what you are doing will generally be correct unless your goals have changed.
    You can have the best, and I do mean best laid plan for your situation but without follow-through it means nothing.  The reason people go to Financial Advisors and Investment Planners is to get help putting a plan in place.  That professional will ask probing questions into your situation, gain an understanding of your goals and obstacles, and craft a plan suited to your needs.  What is shocking is the number of people who will let a well laid
    plan sit idle.  You may achieve some semblance of success with your investing, but if it is not tied to a well executed plan you simply have the appearance of success.
    Ask For Help
    One of the best things you can do as an investor is to seek help.  Even the best investors rely on some form of help, so be open to receiving help in whatever medium suits your needs.  Many investors stumble with making appropriate investment decisions because they do not realize how much of a resource their broker can be.  Your broker can be either the firm or the individual you invest with, and by checking with them it helps you to make more informed choices.  Resources that are typically available through brokers include: articles, videos, seminars, and one on one guidance.

    Protecting your assets is one of the greatest things that you can do as an investor.  It does you a great disservice to build wealth and have it taken away due to fraudulent activity. There are many dangers lurking out there and unfortunately too many stories of investors failing prey to fraud.  I do not want you to become one of those victims, which is why we are covering some of the details you should know in safeguarding your assets.

    The Risks

    Embezzlement- When someone takes the assets that you entrust to them and use them for an unintended purpose.

    Securities Fraud- Could involve providing false information, withholding key information, offering bad advice, and offering or acting on inside information.

    Churning- Excessive trading by a broker in a client's account largely to generate commissions.

    Phishing- Attempts to get individuals to reveal personal information through fake websites or deceptive emails.

    Identity Theft- Someone stealing your personal details in order to access your personal accounts or setup accounts in your name.

    Giving Account Access

    Be careful who you give access to your account, and when you do provide access know what the individual is allowed to do. The other day I was in DC and I had a conversation with a gentleman who said his wife had taken over 800k from his retirement account.  My first thought was about how horrible that was for her to take the money out of his account that way.  Then the investment professional kicks in and gets me to thinking, had the wife been provided with some special access to the account.  It could be that she fraudulently accessed his retirement account, that there may have been collusion with the firm/individual releasing the funds, that the company did not follow protocols for the transaction or that the man provided his wife with some specific access which allowed the transaction to proceed.

    Trading Authorization-  When the account owner grants individuals certain privileges on their account.

    Limited Trading Authority-  The ability to make general inquiries like account balances, place trades, but not receive disbursements.

    Full Trading Authority- Same as Limited Trading Authority and the individual can take disbursements.

    Power of Attorney- Gives the individual the ability to act on the account on behalf of its owner.  This individual can place trades, conduct money movement transactions, make account inquires, and may be able to update additional account details contingent upon rights designated by the agreement designating access.

    Multiple Account Owners- Some accounts provide multiple individuals with the same rights to take action on the account.  Some examples are trust accounts, and joint accounts.

    *Always be sure to carefully review the documents granting authorizations to see what privileges are granted, could also differ by firm.

    Knowing Your Broker

    It is very important to know about your broker; both the company and individual that you invest with.  A lot of people say to stick with people you know, but the person you know could still be a fraud.  Countless tales exist of people introducing friends and relatives to someone with an investment idea and then both parties later end up swindled.  Just take a look CNBC’s American Greed and you will see numerous tales of fraud being perpetuated.  One thing to always consider is that investing involves risk.  Anytime someone offers you an extremely high return or guarantees that you won't incur a loss red flags should go up.  A great resource for researching firms and investment professionals you deal with is BrokerCheck offered by FINRA, http://brokercheck.finra.org.

    Monitor Your Account Activity

    If you have any sort of investment account then you are required to receive certain account records on the account.  Some types of records include; statements, trade confirmations, tax forms, and account agreements.  Make sure to review these documents often.  A lot of times people are shocked to see certain activity take place in their accounts, monitoring the activity can insure you are more aware of what goes on.  Its a good idea to setup electronic delivery of documents, but only if you actually check the records.  By setting up the electronic delivery you stop paper records floating around that others could potentially intercept.  According to a study by Bankrate about the frequency with which individuals check bank and credit card records, 45 percent of individuals who check their accounts do so once a week or less; and a whopping 21 percent never check their accounts online.

    Company Safeguards

    The firm where you invest at should have some safeguards in place to protect your account, like a customer verification process.  Requiring an individual to setup a unique username and passcode helps to lessen the risk of others accessing your account.  Many firms are using a two step identification process, which in addition to your username and passcode requires you to enter a unique code that is sent to you.  Most likely your firm also has a dedicated set of protocols to help customers in the event that someone wrongfully accesses customers account and conducts unauthorized transactions.  Other security measures include session timeouts, account alerts, secure firewalls, and encryption. For information about the safeguards and policies of your broker check their website for their security information or give them a call to inquire. 

    Steps to Take

    *Regularly check account records.
    *Limit giving out your social security number (SSN).
    *Create a unique username.
    *Check for discrepancies with account records.
    *Consider getting online statements instead of paper documents. 
    *Make sure you have some sort of antivirus protection in place.
    *Be careful using wifi when accessing financial accounts.
    *Check to see if websites are secure before entering financial details.  Https is secure, http is not.
    *Be careful when clicking links from unknown sources.
    *Use social media smartly, consider the amount of information that you offer up when accessing and using various platforms.
    *Look for signs of phishing, which is emails looking for personal information.  If you receive an email that looks like it is from your broker wanting your personal information you can give them a call or stop by a location.

    Helpful Resources

    Millenials & Money


    There seems to be a lot of dialogue taking place about the millennial population.  Much can be said of this generation which is coming of age in a highly technological environment where there is more access to information and resources than ever before.  Lots of the talk about Millenials stems around their workplace habits and expectations.  Some of the chatter about Millenials always points toward their work ethic, how they are expecting to be rapidly promoted, and how they crave a better work/life balance.

    But what I am choosing to focus on today is not the workplace behaviors of Millenials, but their money habits.  While researching various topics related to investing and personal finance I seem to come across quite a bit regarding Millenials.  From the majority of the articles written there is this perception from studies, surveys, and other forms of research that Millenials are bad with money.  

    Several factors come into play when discussing the money management habits of todays Millenials.  Notable factors affecting finances of Millenials are large loan balances, credit card debt, rising rents, and and an uncertain job market.  These factors do not affect all individuals in the same way, but they can impact the way one chooses to manage their finances.  

    Some Millenials opt to continue to live with family or take on roommates to lower the burden of certain living expenses.  One study showed that nearly 70% of students who graduated from a four year college did so with debt, which led to 23% of parents with a child who attended college paying off the kids student loans.  With so many competing demands tugging at their pocket books it is easy to see how some young people are struggling financially.  According to one survey the average young person was shown to be responsible in just one of the following categories: on time debt payments, budgeting within their means, and saving for retirement.

    One major reason why individuals struggle with their money decisions is because they lack knowledge of proper behaviors.  Think about all the places where the average person is learning sound money behaviors and it is bound to be a small list.  Good budgeting, saving, and investing habits are rarely discussed in schools, homes, and places of work.  This leaves individuals to fend for themselves and sort through the plethora of bad financial choices one can make.  A recent San Diego State University study showed that young Americans had trouble answering three basic questions designed to test financial knowledge.  The questions are included below for reference.

    (1) Do you think that the following statement is true or false? Buying a single company stock usually provides a safer return than a stock mutual fund.

    (2) Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow: More than $102, exactly $102, or less than $102?

    (3) Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, would you be able to buy more than, exactly the same as, or less than today with the money in this account?

    To contrast the recent findings of some of the statistics levied upon the Milllenial generation I looked back at a few articles from previous years.  One article touted the Millenial population as being super savers, saying 70% of Millenials had started saving for retirement at a young age of 22.  This number is a great improvement on the ages of the preceding generations when it comes to retirement savings; the average Boomer began at age 35 vs the Gen Xer who began at 27.  Beginning to save early for retirement is a good thing, for several reasons.  The compounding of money, availability of a company match, and a rising income will all help propel an early retirement saver to meet their goals.

    Even though getting an early start is important, another factor will also play a huge part in whether or not an investor is successful, that  factor is what you invest in.  According to one statistic I came access only 26% of adults under 30 mentioned owing stock.  That low stock ownership percentage is troubling, especially because the younger you are the more stock exposure you should have.  A long time horizon and being able to recover 
    from shifts in value should make stock ownership very attractive to young investors.  Another factor that could contribute to the low levels of stock ownership could simply be a lack of funds to invest.