A large number of financial forecasts made over the last decade suggest that the outlook for millennial’s is bleak. While there is evidence that millennial’s may face some financial obstacles specific to their generation, it is also true that sound money-making decisions can defeat these obstacles.
Jacob Gottlieb is a financial advisor that serves as the chief investment officer and a managing partner at Visium Asset Management. Gottlieb received a bachelor’s degree in economics from Brown University where he graduated Magna cum laude. He completed his education with a medical degree from the medical school at New York University.
Jacob Gottlieb took a moment to outline a few financial planning tips for the benefit of millennials.
Buy An Affordable House
Gottlieb explains that the benefits of owning your own home will in most cases outweigh any of the potential negatives. The key ingredient to this formula is to not commit too much of your money to the property. A good rule of thumb is to never purchase a home that costs more than two and a half times your annual gross income.
Fifteen Percent Of Your Income Should Be Saved
Long-term financial health is best safeguarded by the creation of a budget that is carefully followed. The millennial who commits 15 percent of their income to savings will begin to watch their nest egg grow in a short while. It is suggested that savings equal enough money to pay all financial obligations for six months.
Eliminate Student Debt
A major concern for millennial’s is student loan debt. Student loan debt can not be eliminated with a bankruptcy filing. Also, the interest accrued on this debt is never-ending. The millennial that takes an aggressive approach to student loan debt repayment can potentially realize savings in the tens of thousands.
Begin Funding Retirement Early In Life
No one possesses a crystal ball that will allow them to know the end of their productive work life. Because of this, you should begin investing in an employee sponsored 401k plan as early in life as possible. A Roth IRA may be more suitable to the needs of some individuals based on the type of work performed, earnings that are expected, and anticipated age of retirement.
Pay Monthly Bills Early
The fees associated with late and missed bill payments can add up to a hefty sum. This money would be better spent on a variety of things or added to savings. Late payments will also negatively affect your credit score and add to interest payments when borrowing money.
Master Tax Deductions
The United States allows for much money to be saved on taxes by the individual that masters the process. The majority of Americans cost themselves money every income tax season by not maximizing deductions. It may be a good idea to employ the services of a tax consultant to lower federal and state income taxes be exploiting allowable deductions.
Utilize Passive Income Streams
Successful people often add to their incomes with investments that don’t require physical effort from them. Popular investments include rental properties and unimproved land. Other citizens have benefitted financially from purchasing intellectual property rights and later collecting royalties.
Continue Your Financial Education
Your personal balance sheet will improve continuously along with an improved knowledge of financial matters. Financial blogs, publications on economics, and information dispersed by experts like Jacob Gottlieb can support efforts to develop a strategy to accumulate wealth. The millennial that takes a moment to learn a little bit about financial matters each week will have a powerful knowledge base with which to work in only a few months.