Succeeding financially is simple, but it’s not easy.
On this episode of Your Money. Your Mission., we dive deep into how you can set yourself up for financial success early on and what mistakes you should avoid that many fall victim to.
Here are mistakes to avoid:
Not Having a Plan
They say that compound interest is the eighth wonder of the world. Those that understand this can benefit significantly; however, those that do not, pay for it. The good news for you is that young people have time on their side. You can take advantage of this by surrounding yourself with a trusted team of advisors and having a plan, even if you are just starting out. One of the main mistakes people make is simply not starting early. Even if it doesn’t seem like you are investing a lot, starting early yields massive returns down the road. When creating a team for yourself, look to have a banking relationship, a wealth advisor, and an insurance professional. These people will get to understand your goals and help get you there while minimizing the downside if unexpected life events happen!
Not Participating in Employer Match Programs
If money is free, you should take it, yet many people don’t fully max out employer match programs for their 401k, even if they have the opportunity. If you are lucky enough to have this opportunity, make sure to take advantage. As we said above, compound interest is the eighth wonder of the world, and the more you can invest monthly, the more benefits you will reap down the road!
Not Managing Risk
When you’re young, you feel invincible and like you have nothing to lose. That said, the average person experiences 60 different life transitions from cradle to grave–all of these are not positive events. Make sure you mitigate your downside and are properly insured to avoid catastrophe and have an emergency fund in place (we recommend at least 6-12 months of expenses). This can be tough when you are starting out but try and get there, as this will give you much better peace of mind and help you enjoy life as much as possible!
Thank you to our experienced advisor Tim Kiesling, VP Wealth Fiduciary Advisor for Johnson Financial Group.
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