It’s official. Millennials are too old to not think about retirement. I’m 30, and I know I’m not the oldest. 30 isn’t old (right? RIGHT?!?!) but it is old enough that you get no “he’ll figure it out” benefit of the doubt when you spend $1000 on a Carribbean booty cruise and then wonder where your car payment will come from.
Let me be 100% clear: I only advocate saving what you reasonably can. If you make $15,000 per year and just plain have nothing left to save after paying for rent and food and transportation and other basic needs, I totally understand. But if you make enough money to have something left over after all those basic needs are met, this is for you. I don’t claim to be an expert on this stuff, but I think I know enough to be pretty good for someone who would rather play computer games than read all those boring personal finance books and try to separate the useful advice from the scams designed to subliminally promote every stock in the author’s portfolio.
Now, I’m going to yell for a while.
1. No fancy shit – Get the Damn Index Fund and Go Home:
Maybe you saw some asshole with a book deal or 10 minutes on CNBC with some “secret method” for getting 50% yearly returns. Maybe you spent a weekend on Seeking Alpha and think you can crush the technical analysis or butterfly options game. Here’s the thing, one investor buying or selling at the right time usual means someone else bought or sold at the wrong time. And you’re up against banks and Wall Street firms with literally floors of incredibly smart guys and even smarter computers using algorithms that calculate 7000 potential trading scenarios in the time it takes you to put everything in that Excel sheet. Index funds are tied to market performance, meaning you can hitch a ride on Wall Street’s tail instead of becoming its lunch. No shame in admitting you can’t out-think a room-sized machine with a fiber-optic link to the NYSE trading floor.
2. Strike a Balance Between Saving and Paying Down Debt:
You will not likely get to 100% power on either debt elimination or aggressive saving anytime soon. But you have to do both at least to a degree. If you wait until everything is paid off until you start saving…you might actually just never save anything because mortgages and car payments have a way of sticking around. But if you don’t pay anything on your debt, that’s how you end up on one of those shows getting distracted by a fat lady while two dudes hook up your car to a tow truck.
3. It is NEVER Smart to Skip Health Insurance and Pay the Fine:
I swear to God, don’t make me tell you twice. There are plenty of problems with the options available to Americans without (or even with) employer-sponsored health insurance. Price is one of them. But paying the fine is plain stupid. ACA subsidies might make getting insurance cheaper than the fine. And if even the fine is cheaper, IT DOESN’T COVER ANYTHING. As long as ACA exists, even the worst insurance covers preventative care and even the most absurd deductibles should keep you from owing $30,000 for an appendectomy or childbirth.
4. Vote According to Where You Are, Not Where You Want to Be:
Voting is the opposite of wardrobe. All other issues aside, you can boil most politicians’ economic promises down to either a) “I will focus on making the wealthy wealthier and that will eventually be good for everyone (Trickle Down); or b) “I will focus on making everyone else wealthier and that will eventually be good for the rich”. As a general rule, whoever gets paid first gets the vast majority, and are sometimes the only ones paid at all. Be realistic about whether you’re actually wealthy right now and vote accordingly.
5. Credit Cards are for Two Things:
First thing they’re for: anything, IF you’re going to pay off your entire balance every month before interest gets charged.
Second thing: actual emergencies in which your life, job, or something of equivalent value will be lost if you don’t use the card.
6. No Matter How Much You Make, Remember You Are Paying For Medicare and Social Security RIGHT NOW:
Plenty of people will try to sell Millennials on accepting the “inevitability” that those awesome social programs keeping our grandparents alive are going away and there’s nothing we can do about it. You need to get them to accept the need to fuck directly off.
7. Develop Your Scam Spider Sense:
Every scammer wants to scam you. Most don’t hide it very well. Anyone who wants you to pay them through Western Union or Moneygram probably refers to you as “the mark”. Reputable colleges don’t spam ads all over Judge Judy and Judge Joe Mathis reruns. And reverse mortgages are a clever way to scam your grandparents out of their home by confusing them with piles of paperwork hiding the fact that even in the best case scenario you probably won’t be inheriting that house when they die.
Oh, and one more thing. Never get a payday loan and never rent-to-own. Those are scams, but they’re so awful I had to mention them twice.