Millennials typically get a bad rap. Ask any baby boomer and you will likely hear how this generation is lazy with no vision. I actually had that very conversation recently with a client that is in his late 70s and very much a traditionalist. While some millennials may fit that bill, I’m finding quite the opposite to be true. The millennials I work with are actually very driven. They’re asking all the right questions to garner as much knowledge as they can about financial issues in a way their parents just never did.
One of my all-time favorite quotes is the one about compound interest that’s attributed to Albert Einstien. “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it.” You will probably see that quote a million more times on my blog because it is one of the truest concepts ever! Sadly too many fail to understand and grasp it. Here’s an example to help you recognize the importance of compound interest if you don’t.
One thing is true of life…expect the unexpected. That’s why any financial guru around will stress the importance of having an emergency fund. If you’re confused on what exactly an emergency fund should be used for, I can tell you it’s not for that 65” TV you’ve been eyeing at Best Buy when yours bites the dust. While that may seem like a catastrophic event to some, it’s not exactly the type of crisis that you’ll want to dip your fingers into your cash stash for. An emergency fund, also known as a rainy day fund, is the money you save for those unforeseen circumstances you run into in life. Your budget is made up of this everyday expenses like groceries, housing, cars etc. Your emergency fund is for those things you don’t anticipate in your budget. So when life happens and it will, you need to have money somewhere that you can easily access to cover those unexpected expenses. This is NOT money you tie up in an investment. You’ve got to keep it fluid and available. You don’t want to count on credit cards or debt to get you through when your car breaks down or the air […]
The thought of being debt free sounds like a dream come true for most of us. Many folks are wrapped up in credit card debt, car payments, mortgage payments, etc. However, there’s one debt freeing yourself from could do more harm than good, from a mathematical standpoint. That is your mortgage debt. Honestly, it’s often not a good idea to pay it off or even pay extra on it before age 50.