The 20-30 Somethings Guide to Investing

Millennials have earned more degrees than any other generation according to Pew Research. How is it possible to have a formal education about history, science, and math, but not for investing for retirement?

Why aren’t we taught about money when that is something we use every single day?

Here’s a quick 20-30 somethings guide to investing.

I sat down with Travis Rinn, a software developer in Austin, to talk about why he made investing a priority in his twenties. Travis has seen first-hand how retirement savings is changing. His grandparents are in their nineties and have been collecting their pensions for almost thirty years now.  Now-a-days pension plans aren’t an option, unless you work for the government.

He said, “We’ll be forced to do things differently.”

20-30 Somethings Guide to Investing

Because our parents and grandparents worked for companies with pensions they never had to think about retirement savings. Investing isn’t something our parents taught us. “And they don’t teach this in high school,” said Travis.

Social Security is still in the picture.  The current benefits received on average is $1,369 a month.  As Travis said, “I am not counting on it. I’m responsible for my own retirement. And that will be true for everyone from now on.”

Even if Social Security is around when our generation retires, you won’t want to count on it.  The average person living solely off Social Security would receive an annual income of $16,428.

Thiis just above the poverty line.

It doesn’t make sense to pursue an education, work 30 plus years, and retire without any savings. Our generation has to make retirement savings a priority and more so than any other generation.

When you understand investing concepts like compound interest and the time value of money, there’s a significant advantage to investing in your twenties versus in your thirties.

 “When I graduated I was already thinking about retirement savings,” said Travis.

Travis recommends saving before you even receive your paycheck. With most employers you can setup your retirement savings to be automatically deducted from your pay. Before the money is in your bank account to spend on new gadgets, electronics, or eating out you know you’re putting money aside for your future first.

“The better I save now, the more options I have in the future,” Travis said.

One of Travis’ favorite quotes is from Calvin Coolidge, “There is no dignity quite so impressive, and no independence quite so important, as living within your means.”

With pension plans becoming a thing of the past our generation must form a new idea of living within your means. Living within your means is more than paying off your credit card, it is having the dignity and wisdom to actively set aside 10% or more of your take-home pay each month for your retirement.

To sum things up, Travis said, “Save now.”

Love Carly

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