Saving money is difficult. Even saving 1% of your paycheck can be a challenge. However, this percentage can have a huge impact on your ability to retire or become debt-free.
For example, let’s say you are 25 years old, make $40,000 a year today, and never get a pay increase from that salary. 1% of that would be $400 a year / $33.33 a month / $7.69 a week. To save this amount it could mean eating out one less time a week, skipping buying a few articles of clothing a month, skipping one night on the town a month, or many other options.
So, instead of spending that one percent of your paycheck you invest the money in the stock market.
On average the stock market has a return of 8% per year, or 10% if you
reinvest the dividends. Dividends are a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves). Assuming you get a 10% return on your investment, by the time you are 65 the 1% you save monthly would be worth roughly $195,000. All from 1% of your paycheck. Continue reading Here’s What Saving 1% of Your Paycheck Could Do…
Warren Buffett is arguably the greatest investor of all time. One thing that separates Warren Buffet from others is his down to earth approach in life, investing, and business. He is full of great quotes that can relate to millennials. Below are 8 quotes by Warren Buffett that millennials should know and follow.
# 1 “Never ask a barber if you need a haircut.”
This might be my favorite Warren Buffett quote of all time. In this situation the barber will always say yes. Even if you just got a haircut 3 days ago. The barber only makes money when people get their haircut. It’s important to take what professionals say with a grain of salt in order to better understand how they are compensated, and how much that is effecting what they are saying. Continue reading 8 Things From Warren Buffett Young People Should Know
Investing in the stock market is an intimidating thing. Many millennials are told to start investing while they are young – this ensures your investments have time to grow over your lifetime. However, just getting started in investing can be extremely difficult.
There are multiple ways to start investing, such as opening/starting an IRA (individual retirement account), or joining your companies 401k/403b plan, but for the most freedom you will want to open a brokerage account. A brokerage account allows an investor to deposit funds with the brokerage and place investment orders with those funds. Continue reading How to Start Investing in the Stock Market
Tax return season is upon on, and this is good news for lots of Millennials. It’s great to get a lucrative return, but what to do with this large sum of money is another question. Below are 5 ways to use your tax return wisely.
#1 Pay off existing debt – highest interest first
If you have existing debt this is a good chance to pay off a huge chunk at once. Pay off whatever debt has the highest interest rate first, usually credit card debt would fit this. Paying off debt early will save you lots of money in the long run, as you will be paying mostly principal on the loan, not interest payments. Continue reading 5 Wise Ways to Use Your Tax Return
Tomorrow. Tomorrow is the worst day to start investing, let me explain.
One of my favorite quotes from Warren Buffet is “Never depend on a single income. Make investments to create a second source of income.” You want the money you are able to save to be put to work, ultimately increasing in value.
Continue reading The WORST Day for Millennials to Start Investing
It is no secret that when Millennials retire social security is either going to be entirely gone, or drastically different than it is today. This means individual retirement planning is more important than it has been for previous generations. Most companies offer a 401k as one of their benefits. In essence, a 401k plan is a retirement contribution plan where employees can make take a portion from their paycheck and put it in a retirement account on a pre-tax basis. I’m always surprised when I talk to people about their retirement plan, and they don’t understand some of the basic features of their 401k or 403b.
The biggest mistake millennials make when contributing to their 401k plan is NOT TAKING ADVANTAGE OF THEIR EMPLOYEE MATCH PROGRAM. The overwhelming majority of companies offer to match a certain percentage of what you put in. As of 2013, the most common matching program was 100% match for the first 6% you contribute. Meaning if you opt to have 6% of your pay into your 401k plan, the company will match that and add an additional 6% to your plan. Even if the company you work for is not as generous in this realm, another common standard is 50% match for the first 6% you contribute. Continue reading The WORST 401k mistake Millennials make