Best Personal Finance Advice for Millennials/Young People | Personal Finance & Lifestyle | Yakezie Forums

Anyone else have any financial advise to share with young people?

Probably just in a few lines, but if you have a specific article you want me to link to with your quote I would be happy to links there.

My advice would be pretty basic.

Live below your means

Avoid debt (Debt for a house is OK, but save 20% of the cost before purchase)

Save an emergency fund of 3-6 months worth of expenses

Live like a college student even after you get your first job and save.

Save up to the company match in your 401(k).

Invest in a Roth IRA up to the max.

Fill your 401(k) to the max.

Continue current lifestyle, even if you get a raise or two. Put money from raises into retirement savings.

Never try to time the Market. It is a fool's game, and you will eventually lose.

Investing means buy the appropriate mix of stocks and bonds for your age and need to take risk. You can afford more risk at a younger age. This is called setting your asset allocation. A good rule of thumb is to use your age as the percentage of bonds to own. The rest would be stock.

Treat your portfolio as one large pot across all accounts.

Automate savings as much as possible by having money taken from your paycheck and put into appropriate accounts before you can spend it.

Investment costs matter. You've heard of compound interest? Well investment costs are reverse compounding, they will take more and more money over time. So invest in very low-cost passive index funds.

Good index funds are Vanguard Total Stock Market, Vanguard Total International Market (ex-US), and Vanguard Total Bond Market. I like Vanguard because of their low investment costs. Make a 3-fund portfolio using these 3 funds and keep putting money into them, month after month, year after year. You will be very happy with the results 30 years from now.

Diversify your holdings. The 3 index funds mentioned will give maximum diversification.

Again, don't time the market. Stay the course and mostly leave your portfolio alone. Once a year you might look at it to check that the asset allocation has not gotten too far from the asset allocation that you want. Your portfolio's asset allocation may shift as stocks and bonds go up and down in value.

Hold tax inefficient investments, such as bonds, in tax sheltered accounts. Hold tax efficient investments, such as Total Stock Market, in either taxable or tax sheltered accounts.

Join the Bogleheads at bogleheads.org

We wrote a post recently about Millennials, mostly from the perspective of a generational study I reviewed in my current graduate program. The link is here: http://2-copper-coins.com/2013/08/07/financial-strengths-of-the-millennial-generation/

and while it isn't exactly financial advice, it does give a picture of what you're looking at when you say 'milennial' as well as some optimistic perspectives on a generation that has been negatively named 'the me me me' generation. 

Hope that's helpful!

Move back home with mom and dad (not that bad). You can't build wealth until your debts are gone. Pay off that car, pay off your student loans, credit cards, etc. I paid off my student loans and the weight that was lifted off of my shoulders was absolutely amazing. My credit also jumped a good 60 points too which sets you up in a better position for another financial matters. If you haven't started a family yet, save up for a nice but affordable condo or townhome. Refinance 3 or 4 years in if the interest rates are good, start saving and investing afterward. This can all be done within four years for most people, I would imagine. 

Also, for any debt, set up bi-montly payments for every two weeks. It will cut out a lot of the interest. (Of course, lenders aren't going to tell you that).