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#Adulting: 7 Things Every Millennial Should Know About Investing

Published April 26, 2017

It’s the biggest problem of our generation. We learned the Pythagorean theorem and about the genetics of organisms. We were taught how to make a volcano erupt and about the fall of the Roman empire. But in the 12 years of homework, pop quizzes, AP classes, and standardized tests, no one ever taught us how to #adult. Namely, how to manage our money and invest in our future.

We all know we should be investing but most of us have no clue where to start. Have no fear -- it’s never too late to start, and now is the perfect time to begin thinking about your future. Sure, it’s hard to put money aside when you live in one of the most expensive cities in the world, but it’s doable. We’ve put together a handy list of a few preliminary things you should know about investing so that you can start planning for your future today.
YOU DON’T HAVE TO GO IT ALONE: The thought of delving into investments may seem daunting, but you don’t have to figure it out on your own. Financial companies like us offer investment services with an array of financial investment options and personalized financial planning designed for your own needs. Meriwest Wealth Advisors are on hand to advise you on stocks, bonds, mutual funds, and private placements. You can be sure that your money is in good hands.

DIVERSIFY, DIVERSIFY, DIVERSIFY: You know what they say: don’t put all your eggs in one basket. This goes for investing, too. Make sure you’re spreading out your funds into multiple investments both in stocks and bonds. This will reduce your risk levels because you’re not relying on the success of one stock.

IRA’S R AWESOME: An IRA, or Individual Retirement Account, is a great choice for money you want to save for the long-term. It’s basically just a savings account that will hold your investments in assets such as stocks, bonds, and mutual funds. The best part about an IRA are the tax breaks, which can give you a big boost over the long term. For example, you might be able to take a tax deduction for money you contribute to a traditional IRA. And you might not have to pay any tax ever on earnings in a Roth IRA. On the other hand, you have to pay a penalty if you withdraw money from your IRA before you reach a certain age. Ask a professional advisor, like the folks here, to help you make the right choice.

DON’T OVERLOOK A 401K: Does your company offer a 401k? The biggest mistake a lot of millennials make is opting out of their 401k or not even knowing it’s an option. In a 401k, your employer takes a portion of your paycheck and puts it into a retirement fund for you. Contributions to the plans are tax-deductible. Even better, your employer may match some of your contributions.

INDEX FUNDS ARE YOUR FRIEND: An index fund attempts to match the performance of a collection of stocks or other securities. Instead of trying to pick the “winners” in the stock or bond market, they buy a basket of stocks and bonds that will mirror the performance of those markets as a whole. They generally have very low expenses--so you keep more of your returns.

AUTOMATIC INVESTMENT PLANS MAKE LIFE EASIER: An automatic investment plan takes some money -- as little as $50 a month -- from your bank account or paycheck and automatically puts it into a savings or investment account. This is great for spendthrifts or those of us who just can’t be bothered to think about saving (pretty much everybody). Your bank or your employer can help you set up your own automatic investment plan. Your future self will thank you.

BUDGETS AREN’T BORING: Review your card and bank statements for the past three months, and organize your spending by food, rent, transportation, clothing, travel (whatever you spend the most on). You’ll make amazing discoveries about where your money is going, and you’ll probably identify ways to cut back without ruining your cause. Spending too much on food? Cook dinner one more evening a week. Buying too many new pairs of shoes? Limit yourself each month and add that extra money to your investment account.

For more information on how we here at Meriwest can help you with your financial goals, stop by a branch or visit our site today.

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