Financial Tips for my 20-Something Year Old Self - Tip #2: Credit Cards are NOT Free Money!

Ok, this might be a tip more for my 18 year-old self, but the lesson followed me into my 20’s. “YOLO” and “FOMO” weren’t actual acronyms when I was in college, but I sure lived by those mantras, “You Only Live Once” and “Fear Of Missing Out.” When asked if I wanted to go shopping… Heck yeah! When asked if I wanted to go out for dinner…You betcha! When asked if I wanted to take a trip to NYC…DUH! All of these “Yes” answers led me to over-extending myself and spending money I didn’t have. The $500 worth of parking tickets I racked up in NYC certainly didn’t help! I maxed out a credit card in a span of 6 months and spent the next 4 years paying it off.

Financial Tips for my 20-Something Year Old Self - Tip #1: Save Early

Picture this, circa 2005 I’m 22-years old fresh out of college with the world ahead of me! I haven’t landed my dream job yet, but I’m working full-time as an assistant manager in a retail store and making okay money. I know this isn’t where I plan to end up, but it will do for now. STOP! Right then and there I wish I hadn’t just looked at that as a job to make money and get by. I was making enough to be saving, but I had a “spend what you make” mentality.

Disability Insurance

We’ve already established that your most valuable asset isn’t your house, car, or retirement account; it’s YOU and your ability to earn income. That is why it’s so important to protect that asset with disability insurance.

According to the Social Security Administration, the chance of becoming disabled before you retire is 1 in 4 - and for most people, disability will result in a lower living standard due to the loss of income. Having a disability insurance policy can replace lost earnings.

Deductibles vs Premiums

One of the biggest factors in choosing insurance, whether it’s auto, homeowners, or health insurance, is the cost. But the cost isn’t just the monthly premium you’re paying; it’s the entire out-of-pocket cost you will pay if you have a claim.

It’s easy to elect the least expensive premium plan because so many of us have the “it could probably never happen to me” mentality and paying less on a monthly basis is much more appealing. But consider why you’re buying insurance in the first place…or the peace of mind of knowing that even though it “probably” couldn’t happen, there’s a chance it will and you want to be covered.

Protecting Yourself with Insurance

When it comes to insurance, we’re used to insuring our cars and homes and other important tangible assets that we may not be able to afford to replace easily. But nothing is more important than your life and ability to earn a living. YOU are your greatest asset that you need to protect.

The ESG tipping point: Are we there yet?


Washington - During the course of the past few weeks, markets have been volatile, and across our industry many asset classes have experienced outflows. However, some environmental, social and governance (ESG) strategies have continued to experience net inflows. Observing this, many investment consultants and members of the media have been asking us, "Have we reached the tipping point for ESG investing?" Incongruously, we have also been asked if the pandemic will derail ESG momentum.

As we have said in the past, we believe a tipping point for investors has already been reached and we see ESG increasingly embedded in the corporate and public psyche. Even an event as tragic and massive as the pandemic will not derail this trend, for at least three important reasons:

The importance of simplifying accounts


There are many reasons you may have multiple investment and banking accounts.

  • Job changes resulted in multiple retirement plans located at different institutions
  • You started investing in companies or mutual funds by directly buying a small number of shares over a long period of time
  • A family member gifted shares of stock to you
  • A bank offered great rates on savings or loans that you just could not pass up
  • You don't trust the financial services industry, and decided to keep multiple accounts to decrease the risk of an institution going out of business or someone stealing your money

These all seemed like good ideas at the time, but there are many reasons you should simplify.

Sticking to Principles

Financial downturns are unpleasant for just about everyone. For investors, sticking to core principles can help.

A famous American football coach once said, “You don’t rise to the occasion, you sink to the level of your training.”The implication is that, in times of great stress, the most reliable recipe for success is sticking to a set of fundamental principles.

From February 20 to March 20, the S&P 500 Index returned –37.4%, with daily returns ranging from –12.0% to +9.4%. A drop of nearly 40% in the stock market combined with a spike in volatility can make many investors reconsider their investment approach. Some might suddenly find stock-picking approaches more alluring. After all, who has not heard the claim that a volatile market is precisely the environment in which many traditional active managers thrive? But is there any truth to this claim?

What is the Fed doing and what does it mean for fixed income?

What has the Fed done?
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity. In addition to lowering the Federal Funds rate to a range of 0-0.25%, the Federal Reserve has restarted its quantitative easing program (QE), expanding the mandate to include commercial mortgage backed securities (CMBS) and putting no limit on the size of asset purchases. The Fed has also restarted the term asset backed securities loan facility (TALF), included municipal bonds as eligible collateral at the Money Market Mutual Fund Liquidity Facility (MMLF) and Commercial Paper Funding Facility (CPFF), and created both the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCP).

No 401(k)? No Problem

Saving for retirement can be daunting, so it’s no surprise that employer-sponsored retirement plans can be a key stepping-stone into the world of investing—and to a healthy retirement nest egg. 

While that’s great for those with access to an employer-sponsored plan, such as a 401(k), 403(b) or 457 plan, those without access to a plan at work may find themselves struggling to figure out where to begin saving for the future. 

That’s particularly true for millennials. About 72 percent of non-investing millennials are employed full-time, but don’t have access to an employer-sponsored plan, or are not employed full-time, according to a recent study by the FINRA Investor Education Foundation and CFA Institute. That compares to just 21 percent of millennials currently investing with retirement-only accounts. 

But the lack of access to an employer-sponsored plan or to full-time employment doesn’t mean you can’t save for retirement. In fact, saving for the future can be one of the best ways to use your money, no matter your current employment status. 

“While employer-sponsored retirement plans are fantastic tools to help people save for retirement, there are plenty of options for those who don’t have access to one,” said Gerri Walsh, President of the FINRA Foundation.

Here’s a look at your options: