Financial Planning for Young People – Video Outline
This is an important article not only for young people just starting out. It’s also for people like some of my clients. They have adult children and ask me to advise them as they start out.
Here’s my primer:
Hundreds of financial advice articles come out each week explaining to “millennials” how to plan their finances. Usually they list all of the new online investing help websites that have popped up over the past 5 years. And they explain how helpful they can be allocating your portfolio.
Case in point – this from Bloomberg on 7/13/15:
Nice article. But here’s the problem: portfolio allocation should not be the first priority for younger people. Or any generation when planning. Video (from my Chris Grande personal channel on Youtube):
Comprehensive Planning For Young People Too
My argument: young people planning their money need to focus on total comprehensive financial planning. Consider these thoughts about our parents and previous generations*:
- For many in prior generations, when and where to buy a house was the biggest financial decision they made.
- For others, where they worked, was most important.
- And for some, how much pension or Social Security benefit they built up turned out to have been most important.
- If there is a ~ 13% chance you die before age 65 (and SOA says there is) what do you have in place to protect loved ones?
- If there is double that chance that you get disabled (and there is) before 65, what are you doing now to make sure you can pay the bills for yourself and your family if you get disabled?
Predicting Your Financial Future vs Planning for It
Going forward, some or all of these may come into play in our lives in the near future. Being so, we need to think seriously about financial topics besides “the best way to allocate a 401k.” Financial Planning for young people needs to be more involved.
You need to ask yourself, which of the scenarios above will apply to you? How will your life turn out?
If, like a majority of us out there, you don’t know, then you need to draft and execute a COMPREHENSIVE FINANCIAL PLAN. A plan that covers your entire financial picture. Not just allocating your investments.
When you decide to look up a financial “advisor,” make sure they provide comprehensive wealth/planning advice. Even if you’re just starting out.
It would be a sad day if you worked hard, saved up and then saw your savings evaporate due to an “unexpected” event.
Have any questions? Looking for an advisor who has excellent technology in a client portal, who offers expert advice and keeps you accountable to your goals? Contact us here.
Thanks for reading!
*Source of mortality data: http://money.cnn.com/2005/09/13/pf/fears_dieyoung/