FAMILY TRADITION AND INVESTING
Let us take a look at investing by assimilating it to family tradition.
Based on the latest Global Investor Pulse Survey, 37% of millennials believed their parents imparted everything they need to know about personal finance or managing their money. Unfortunately, this generation is experiencing depleting investment balances and the aftermath of the last financial crisis.
Nevertheless, here’s how family tradition has taught everyone about investing.
Maximize and Maximize and Maximize
Ask every certified public accountant you know and they will tell you to max it out. Yes, it would be difficult to do it at first. But it pays off anyway. Save as much as you can the moment you start in your first job. This move is made easier with automatic savings.
Everyone, including you, began with a small paycheck (and perhaps a smaller abode). But this should not be an excuse not to contribute enough to your 401(k) and the like. Pensions are (sort of) a thing of the past. So having a retirement account is the next best thing here on earth. And if you take it for granted, it is like leaving free money on the table.
If you can’t pay for a particular item or service, don’t buy it. Do not purchase anything using a credit card if you do not have enough money to pay for it. Or if you have to, make sure to pay the bills in full and on time. That’s the very first step to remaining debt-free and maintaining a good credit score.
Buy, not Rent
Of if you rent, still, work on acquiring at least one property. This one is quite difficult to achieve. But with the right planning and sufficient amount of money, it can be attained. You should set aside a particular amount of your income to purchasing a property once your finances permit.
Do not put all of your eggs in one basket. Do not invest in the same asset classes. You can put some money on bonds, stocks, or options, depending on your financial goals. Invest in different types of companies as well to counter the losses and maximize profits.
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