BY MIKE MCGILVARY
Like many of the younger professionals throughout our community, I am classified as a Millennial. I was first introduced to investing by my parents, who happen to be a part of the Baby Boomer generation. Like many Baby Boomers, they believe in the time value of money and making their hard-earned dollars work for them. My parents even helped me establish a Roth IRA when I turned 18 years old. I consider myself very privileged to have had them instill their opinion of the importance of investing in me as a teenager.
Their opinions had such a profound impact on me, I decided to major in finance at East Carolina University and make it a personal goal to become a successful financial services professional. Since entering the financial services industry, I have not only made it my goal to provide investment services to our community, but also to assist my fellow peer group with their investment goals and questions. I consider it a very rewarding part of my career to have the opportunity to serve my demographic. For the Millennials who are considering investing a portion of their earnings, it can be confusing. Where to start? What questions to ask? I have listed some considerations for my fellow Millennials to think about when it comes to getting started;
- Write down your short-term and longer-term goals. Do you want to pay down your student debt? Do you want to buy a home in the next few years? How much do you want in your emergency fund? Writing down what I want to accomplish has always helped me become more organized with my finances.
- Do you have a budget? In my experience, knowing what your discretionary income is can be a very important consideration when it comes to investing your money.
- Make a conscious effort to understand what benefits your employer offers. Many people joining the workforce for the first time get started with investing by joining their employer’s retirement plan. If your employer not only offers a plan, but also offers a matching contribution, strongly consider putting in at least the minimum percentage your employer is willing to match.
- Consider what kind of dollars you are contributing to the retirement plan. Some employer retirement plans will allow Pre-Tax, After-Tax and/or Roth dollar contributions.
- If you are a self-employed Millennial, congratulations! I applaud you for taking the step to become a business owner. Secondly, consider speaking with a Financial Services Professional and your Tax Professional about starting a retirement plan. As a business owner, you have options such as a SEP IRA or SIMPLE IRA that may be appropriate for you, and can help you start saving for your financial future.
- Even though you may be younger, not having all your funds in one stock/ bond/ mutual fund can help mitigate some of your risk when it comes to investing.
- If you are considering working with a Financial Services Professional, or if you already work with one, ask them how they are compensated.
Like many decisions, investing your money is one that should take many factors into consideration. No matter what age you are, I feel there is no one-size-fits-all investment solution. Millennials looking to invest or learn more about investing can start by taking into consideration their personal goals and by having a conversation with a financial services professional.
Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance, a registered investment advisor, Independent Advisor Alliance and Marzano Capital Group are separate entities from LPL Financial.