Many mainstream media organizations during the previous decade have portrayed nothing but doom and gloom for the financial future of millennials. It is agreed millennials will need to deal with certain economic realities. Millennials need to realize making good decisions now can make financial lemonade out of financial lemons. Jacob Gottlieb is an investor in New York City. He has some valuable financial advice that will benefit millennials.
Purchase A Home Within Your Budget
It is important for millennials to realize home ownership is always better than not owning a house. Getting the most out of this situation will involve avoiding the trap of tying up too much capital with a single property. The golden rule is to never purchase a house that equals over 3.5 times your yearly gross earnings.
Save A Percentage Of Your Income
It is recommended millennials save approximately 15 percent of their monthly income. This is a very effective way to have long-term financial health. If a millennial can save 15 percent of their income on a monthly basis, they will soon have a substantial nest egg. At the very least, it is wise to have enough money saved to pay living expenses for six months.
Student Loan Debt
It is important to deal with any student loan debt as soon as possible. One of the most difficult things for millennials could be having graduated from college during the student loan bubble. College debt is not able to be eliminated in a bankruptcy. The Interest continues to accrue on any unpaid student loan. When a millennial is aggressive about paying off their student loans, they could save thousands of dollars.
It is recommended millennials start a retirement fund by the time they are 25. Nobody can predict when their productive work days will end. Should an employer provide a 401(k), it’s important they start investing in it as soon as possible. Depending on the retirement age and projected earnings for a particular profession, a Roth IRA may be a good option.
It’s important to try and pay expenses ahead of time. Missing payments or late fees can quickly add up to a lot of lost money. Having a history of paying bills late can also have a negative impact of a person’s credit score.
It is a good idea to be aggressive with seeking tax deductions. Many citizens in the United States fail to claim thousands of dollars in tax deductions every year. A qualified tax consultant can suggest many ways to decrease state and federal income tax payments.
Developing a passive income stream is always a benefit. Many successful individuals add to their incomes by being involved with a business that doesn’t require too much effort. Some invest in rental properties others invest in unimproved land and more.
One of the most effective ways for a millennial to improve their financial situation is by learning about finance. There are online classes, economic publications as well as financial blogs to help people learn about wealth accumulation. This information should be taken in small but regular amounts. It is a way to be prepared for retirement when that time arrives.
Jacob Gottlieb is the chief investment officer and managing partner of Visium Asset Management. The company was founded by Gottlieb in 2005. He graduated from Brown University magna cum laude with a BA in economics. Gottlieb also went to New York University Medical School and earned an M.D. In 2001, the Association for Investment Management and Research awarded Gottlieb a CFA charter. In 2010, the Professional Risk Managers’ International Association gave him his PRM designation.