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The Millennial Problem AND Solution

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THE MILLENNIAL PROBLEM AND SOLUTION BY D O U G L A S A B O N E PA R T H , C F P ® 1


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THE MILLENNIAL PROBLEM 4 PART 1: THE LACK OF FINANCIAL LITERACY 4 PART 2: COST OF EDUCATION 6 PART 3: STUDENT LOANS 10 PART 4: THE LABOR ENVIRONMENT 14 THE MILLENNIAL SOLUTION 20 IDENTIFY AND PRIORITIZE YOUR GOALS 21 EDUCATE AND EMPOWER YOURSELF 24 CONSULT A TRUSTED FINANCIAL ADVISOR 26 CREATE A FINANCIAL PLAN 27 3


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THE MILLENNIAL PROBLEM PART 1: THE LACK OF FINANCIAL LITERACY If I was not the son of a financial advisor, I would have been financially illiterate. That’s the truth. No aspect of my people who were preyed upon by banks selling education provided me with the tools to make informed mortgages they could not afford before the housing financial decisions. There was not one formal lesson on bubble burst. Sure, the banks involved in predatory cash flow, debt, credit or investments; not even in my lending should not have been doing that in the first business school classes or in my wife’s law school studies place, but I wonder, would a person with solid financial did we learn about these things. From a personal finance knowledge have accepted terms to a loan that were too standpoint, everything I would have learned would have good to be true? In some ways, I believe that a financially been a reaction to life’s choppy waters — a correction educated public could have prevented a major economic to a mistake. That sounds like a bad setup for success, downturn. Of course, it’s not that simple, but the example right? I am willing to bet that many of you reading this are makes the point: a financially educated person makes shaking your head and uttering, “That’s me.” financially informed decisions. This is dangerous. If we’re simply reacting to our financial If there is any hope of fixing the types of financial issues environment, we are vulnerable to making financial Millennials and future generations face, financial literacy mistakes that we could wind up paying for (or repaying) 4 for the rest of our lives. Think about all of the vulnerable is where we must begin. I am looking at you, schools,


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universities, governments and parents. Let’s get serious about this stuff. Let’s teach personal finance in middle and high school classrooms. Let’s provide the building blocks needed for young adults to do the right thing when it comes to handling their money. While a societal problem of this magnitude takes time to improve, my goal is that The Millennial Problem and Solution can empower you today for a more financially sound future tomorrow. 5


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THE MILLENNIAL PROBLEM PART 2: COST OF EDUCATION My wife and I both took on a little student debt. Okay, 115% over the same period. This means that the cost of we took on a ton of student debt. Two graduate degrees education increased almost five times more than the cost in Manhattan worth of debt, to be exact. Now we have of just about everything else! The College Board states a mortgage-sized payment every month, none of which the average cost of tuition and fees for the 2014–2015 counts toward our home goal, a large portion of which school year was $31,231 at private colleges, $9,139 for goes toward interest alone. Sigh. If you thought you in-state residents at public colleges and $22,958 for were alone, you are not. Even young financial advisors out-of-state residents at public colleges. Some basic cannot always work around the unfortunate truth we are Google searching indicates that the average annual cost about to discuss. While Part 3 of The Millennial Problem for a graduate degree ranges from $30,000 to $40,000 is reserved for “Millennial Student Loans,” here in Part for both public and private universities. So, using the 2, we must first examine its precursor: the rising cost of numbers above, the average cost of a four-year college higher education. degree can run $84,500, and a two-to-three year graduate degree is around $70,000-$105,000. That’s According to a Forbes report, college tuition and fees some fancy learning. have increased by approximately 500% since 1985. If you think that’s nuts, guess what? It is, and here’s some perspective. The consumer price index (CPI) rose 6 Sources suggest that possible culprits for the increase include the need to pay higher salaries to professors,


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greater administrative costs, increased student generation to ours. Despite being considered one of enrollment, facility construction and development, the the most educated generations, Baby Boomers went availability of student loans and a widespread decrease to college when it was still considered a privilege. in government funding. Not everyone had that opportunity, and it was widely accepted that college — especially at four year private Now that we have some numbers involved, we can institutions — wasn’t for everyone. Nor did it need to be. reasonably conclude that educating yourself can be an The labor force (discussed in Part 4) was more welcoming expensive proposition. Yet, it seems to be a necessary to those who did not pursue higher education back then. one. In 2014, US News and World Report reported that college graduates earn an average estimated $17,500 Today, however, college education is perceived as a more per year than those with just a high school diploma. right. Sorry to those of you offended by that notion, but That’s another $525,000 over a 30-year career in today’s it’s true. Our generation views higher education as a dollars. Therefore, the current paradigm dictates that right. Boomers, don’t start ranting about “those entitled earning a college degree is an essential tool needed to Millennials” just yet, because the blame cannot be placed compete in today’s working world or, at the very least, entirely on our shoulders. The perception is widespread earn more money. In order to truly separate yourself through our country and its education system. In some from the crowd, you may even need to obtain a master’s circumstances, this message is meant to empower, such degree. The U.S. Census Bureau estimates that an as when President Obama says that everyone should individual earns approximately $400,000 more over a attend college. He has made this statement in support lifetime with a master’s degree. of proposed programming that would afford high school graduates two free years of community college. POTUS, Let’s dive a little deeper into the higher education however, is not the only one sending this message and paradigm, which has drastically shifted from our parents’ the incentive behind it may not be the same. These 7


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universities are businesses, many of which are privately rising cost of education. But until the paradigm shifts, this held. They are competing for our business as much as is the Millennial’s reality. My wife and I know it. We made any other brand or service, and that is apparent in the conscious decisions to live it. More critical than the cost factors above that are linked to the rising costs, such as alone, however, is that most young people are faced with raising salaries for the best professors and building the making this decision of the highest magnitude without newest and best facilities. But the entire enterprise fails being fully informed of the consequences. Without unless these institutions can make their programs seem pushing financial literacy, The Millennial Problem will affordable, even as they get more expensive. Four easy continue to spread to generations to follow and have installments of $27,000 — with financing available for all! long-term effects on our country’s economy as a whole. I am not writing this to crush dreams. Sure, everyone deserves a chance at excellence, and the statistics clearly show that earning power is generally higher with a college degree. But where the tipping point lies between the cost of a specific university’s designer degree and the actual return on investment is more complicated. It’s a personal question about one’s honest goals in life. Meaning, the prestige of a $200,000 liberal arts degree from your dream Baby Ivy may not keep your electricity on with a 5.25% interest rate. We will discuss goal-setting later on. I do believe there’s a fundamental problem with the 9


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THE MILLENNIAL PROBLEM PART 3: STUDENT LOANS According to Edvisors.com, the average debt per college The reason debt gets a bad rap is because we often see student in the Class of 2015 is approximately $35,051. the devastating consequences that come from utilizing That’s an increase of $2,000 per student from 2014. Wild, loans without being properly informed of how to analyze right? It takes many indebted students to amass $1.2 their risks. Let’s use an analogy: trillion in national student loan debt. Actually, it takes an entire generation to bust out that many zeros. financial illiteracy : loans :: burning match : gasoline Let it be known that I am not a person who thinks all loans are bad. That’s just silly. Utilizing credit and incurring firsthand the alarming number of Americans who fell debt greases the economic wheel. Banking systems victim to their own uninformed financial decisions, worldwide take on debt to keep the engines running. especially those decisions dealing with loans and Businesses, both large and small, use credit to facilitate managing debt. We also saw how bad our behavior can and expand their operations while individuals, like you be when we mix borrowing with a lack of understanding and me, rely on loans for financing major purchases like of the ramifications of incurring debt. Do you think homes, vehicles and, of course, higher education. Let’s predatory lenders took advantage of the financially give debt a round of applause! Kidding, but perhaps a informed? In many respects, they did not. The housing sophisticated golf clap? Sure. 10 Both are dangerous combinations. In 2008, we saw crisis looks much like what we see occurring with higher


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education. So let’s shift our focus back to student loans equipped to make an informed financial decision. Since with the help of an example. she will not be denied her right to attend her dream college, she takes out the loans and goes to college. Say hello to Jessica. Jessica is finishing up her last After four years of what can only be described as the semester of high school when she learns that she has BEST years of her life, Jessica graduates with her been offered admission to one of her top choices for college degree, an okay job opportunity and a whopping college. This college boasts one of the best programs $80,000 in student debt. for what she thinks she wants to do when she graduates. Jessica quickly and happily accepts the offer. On the So, what’s the problem here? The $80,000 in loans financial front, Jessica’s parents have saved some she borrowed for that degree, right? WRONG! The real money for her college education, and because Jessica problem is that no basic planning took place before is an above-average student, she is able to earn a she made the decision to finance her education. When small scholarship to supplement her parent’s support. did she consider that $80,000 in student debt would However, it is not enough to completely cover the cost of mean an $821/month payment using a standard 10-year attendance, including room, board and a modest lifestyle. repayment plan? Did she research the average starting In fact, Jessica was told by the college’s financial aid salary for her profession? What about estimating the cost office that she would need an additional $20,000/year to of living in the city and market she wanted to work in make attending her dream school a reality. They told her after graduation? Dare I suggest a basic understanding she should consider applying for student loans to make of taxes? Had Jessica been financially educated, there’s up the difference. Mom and Dad trust that their bright- a good chance she would have known what she was eyed scholar will make the best decision for herself. getting herself into before she decided to finance her education with $80,000 in student loans. Maybe she Unfortunately, as you might have guessed, Jessica is ill would have put together several possible budgets based 11


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on different outcomes. Because if you make $2,500/ the cost of education is out of control, but that doesn’t month after taxes and rent is $1,250/month, you’re going mean we can’t approach it in a way that still makes to be left with half your month’s take-home pay before financial sense. Love them or hate them, student loans that $821/month student loan payment is due. I can’t will remain a big part of the equation when it comes to help but wonder how Jessica feels about living on $429/ paying for college. But we must be that much smarter month in the big city and what she would have done and plan that much earlier so that we don’t end up differently if she thought it through to this extent. reacting to avoidable situations. This is where financial literacy comes in, because with knowledge, we can think I am not saying Jessica made a bad decision. But if about any decision in an objective light and stay focused Jessica thought about student loans in the context of her on the big picture. goals and did some planning upfront, she could have been more empowered for her post-collegiate launch into the “real world.” Equipped with the tools upfront, she probably could have been more confident in her daily financial decisions throughout college, as well, leaving more energy to spend on her studies (and fun). Lastly, should Jessica ever want to change direction in her career, she can adjust and get back on track more easily than had no planning taken place. Simply put, Jessica would have been in control. Student loans — like all loans — are just a tool, and a tool can be very helpful when you know how to use it. Yes, 13


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THE MILLENNIAL PROBLEM PART 4: THE LABOR ENVIRONMENT When I graduated college in 2007, the economy was in unemployment took hold, paying no mind to who you full throttle — or at least, it appeared to be. Jobs were were. For many Boomers, 30 years of loyal service to a abundant and few worried about their employment company bought many late in their career a severance prospects. Things were so good, in fact, that many of us package (if any), a pat on the back and a premature extended our academic careers and attended graduate retirement party. Meanwhile, entire recruitment classes programs. Statistics provided by the American Bar of Millennials were told that their job offers and prospects Association indicated that first-year enrollment for U.S. were no longer valid, as organizations across all industries law schools was at a record high beginning in 2003. were actively “cutting costs.” Cheery holiday parties and Unfortunately, we did not see the storm looming in the plump bonuses became urban legends. distance. After barely spending a year in our new careers or programs, we were quickly submerged into the deep- The recession further advanced something else that was end of an economic cycle. For those of us working, taking place in the U.S. job market. From 1997 to 2012, things looked grim. For others continuing our educational the labor environment shifted significantly. The illustration journeys, things looked the worst. on pages 16–17, provided by the U.S. Census Bureau, shows a dramatic decrease in manufacturing jobs over a The recession forever changed how the American public views jobs. We learned that life is fickle. Layoffs and 14 15-year period. This arguably made navigating the labor environment that much more difficult for Millennials.


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Even though we are considered one of the most skilled of reinventing what “journalism” meant to them. Young workforces by virtue of our expensive educations, budding journalists who could have secured full-time the decline in manufacturing jobs aided in an overall entry-level roles in the past now need to make names decrease in workforce participation. for themselves in other ways. With new media ruling the roost came new websites, blogs and video content Watching my friends and clients adapt to these new sources — along with entire digital departments of the economic realities was as eye opening as it was inspiring. preexisting behemoths. Journalists have adapted both by Some expressed their anger by taking to the streets — learning new trades in digital formats, and often choosing crying victim to corporate greed and fiscal irresponsibility to remain as freelancers, spreading their talents across of the highest order. That truly was eye opening, but I many platforms, enhancing their bargaining powers and will save my thoughts on that for another time. Others commoditizing their abilities in ways they once could not. snapped into survival mode and did whatever it took to Through the traditional print industry shaving its bottom stay on track — from assuming jobs they never imagined line, a new industry was born, and more professionals they would, to working extra hours without pay just to got used to the idea of going at it solo. stay on the payroll. Every industry saw the change, but here are just two examples. First, the media. The rise of digital media, which many will say was revving up long before the recession, has had a profound effect on traditional print journalism. Along with the physical size of newspapers and magazines, mastheads were sliced in half, leaving storied writers, editors and photographers with the task 15


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Employment from 1997 to 2012 20 18 THE CHANGING U.S. ECONOMY This graph provides findings from the 2012 Economic Census Advance Report, the first in a series of releases from the census. Future releases will focus on specific industries and America’s communities (including more than 5,000 small towns never before covered in the census). The Economic Census helps business and government measure past performance and plan for future growth. 16 16 Retail trade 14 Health care and social assistance 12 10 Accomodation and food services 8 Administrative and support and waste management and remediation services Finance and insurance Wholesale trade Construction Professional, scientific, and technical services 6 4 Other services (except public administration) Information Transportation and warehousing Management of companies and enterprises 2 Real estate and rental and leasing Arts, entertainment, and recreation Utilities Mining Educational services 0 1997 2002 2007 2012 Millions of Employees The Economic Census gives the nation a window to view change in the U.S. economy. For example, due to the substantial growth in Health Care and Social Assistance employment during the past 15 years, it is now the leading sector in employment. Taken every five years, the Economic Census gives an update on 1,000 industries for more than 15,000 communities across the country. Manufacturing


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While Manufacturing had the largest decrease in employment (-5.5 million, or -32.9%), average annual payroll per employee increased from $33,907 to $52,686. Employment in the Professional, Scientific, and Technical Services sector increased by 51.9% (or 2.8 million), and this sector had the largest increase in the number of establishments, up 233,145 (or 37.5%). Health Care and Social Assistance had the largest increase in employment, up 5.0 million, or 37.1%. 56.3% of this increase was from Ambulatory Health Care Services (which includes doctors offices). Employment in the Finance and Insurance sector increased by 6.5% (381,890), but revenue increased by 60.7% ($1.3 trillion) during this same period. Retail Trade employment increased slightly (up 5.3%, or 746,584), and this sector still has the most establishments in the U.S. (over 1 million). Mining had one of the largest percent increases in employment (up 77.5% to 903,641) as well as the largest percent increase in value of shipments (up 219.1% to $555.2 billion). Accommodation and Food Services employment increased by 27.3% (up 2.6 million), with Food Services and Drinking Places establishments making up 90.0% (2.3 million) of that increase. While Utilities employed only 655,358 persons in 2012, these employees had the highest average annual payroll per employee of any sector, $89,470. Source: 1997, 2002, 2007, and 2012 Economic Census. Data in this Infographic include only establishments with paid employees. All figures are in current dollars for the period shown, are not adjusted for inflation and do not reflect changes in prices. For information on how the Economic Census is conducted, see the Survey Methodology (http://www.census.gov/econ/census/ help/methodology_disclosure/). For other information on the Economic Census reports (including a Release Schedule and information on comparability), see business.census.gov (http://www.census.gov/econ/census/). 17


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Another great example is the legal field, my wife’s industry. Firms started utilizing more technology to condense its For decades, “Big Law Associate” was the Holy Grail of rooms full of underlings, contracting with vendors like an entry-level job for attorneys, coupling high salaries document review companies and others. Companies, with infinite hours of low-level billable work: document on the other hand, have beefed up their own internal review, legal research, legal redactions, etc. Firms recognizing value in could charge clients bringing some of the millions work back in house. for their departments, legal team’s efforts, Lawyers because clients were and continue to do willing to pay them so as their business and could afford to. As changes. the recession hit and lawyers mass layoffs began, choice. firms not only adapted Millennial had little cut associate class sizes Faced but also looked for changing more efficient ways to and all of the others, staff projects, bringing many with these industries Millennials better value to their clients and improving their profit margins. Partner-track associate opportunities have made and go our own ways. Whether that meant starting way for new “staff attorney” positions, which come with businesses, freelancing or engaging employers who a reduced salary and less commitments on both ends. 18 (including myself) decided to take the road less traveled aligned with our values, we decided to rely on ourselves


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more and the traditional corporate model less. Sure, receiving a pension and gold watch at retirement was long gone well before 2008, but the recession made it perfectly clear that our generation was going to have to go about things differently to achieve financial independence. Of course, there would be risks. But what seemed safe was no longer safe anymore. We might as well make our demands, set our own standards and redefine what success means to us, whether that means a better work-life balance or more creative freedoms. We are finding the silver lining as best we can. Part 4 completes The Millennial Problem. I believe that in order to solve a problem, you first have to understand it. The goal of The Millennial Problem was to inform and highlight how the lack of financial literacy, rising cost of education, acquisition of student debt and changing labor environment created a uniquely challenging financial landscape for our generation to wrestle with. However, there are steps we can take to get through it. That’s how I feel about financial planning. It provides us the tools we need to improve the likelihood of achieving our goals. 19


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THE MILLENNIAL SOLUTION Now that I’ve identified and explored the financial challenges we face as Millennials, we can start to discuss the tools that will help us navigate our lives so that we can reach our financial goals. What I am about to provide is not a silver bullet, because there’s no quick fix to becoming financially empowered. However, the following guidance could, at the very least, set you on the right path and, at the very most, change your life. Let’s put our problems behind us and focus on the solutions. 20


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IDENTIFY AND PRIORITIZE YOUR GOALS What do you want for yourself? Is it that stereotypical fact that your financial goals are yours. Don’t let anyone beautiful two-story house enclosed by a white picket tell you they are right or wrong. In fact, with the exception fence on a half-acre of land, or is it renting a larger of your significant other (who you should probably be apartment than your current one? It is filling either of sharing these things with), you don’t need to share them these homes with a loving family? Perhaps you want to with anyone if you don’t want to. It is called “personal pay off those student loans we’ve been going on and on finance” for a reason. about? For all I know, your goal could be to take a Virgin Galactic trip to outer space so that you can stare back The first step is often the hardest one to take. Defining down at this marvel we call earth. Whatever your goals your financial goals takes a great deal of direction, focus, may be, you must define them. Without measurable self-honesty and maturity. For many Millennials, this might goals, we cannot play the game. We cannot pass go and be the first time you have seriously contemplated these we cannot collect $200. questions, and that can be scary. Have no fear, though — it’s totally okay! You don’t need to have it all figured out. I cannot overstate the importance of this first step, which Most likely, your goals will change over time, and that’s also happens to be the very first step of the financial okay, too. planning process. Every comprehensive planner starts here, because without knowing what to aim for, how can If you don’t know what you’re aiming for, stop reading this anything be achieved? And you need to embrace the right now and grab something to write or type with. Think 21


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about and inscribe your financial goals. If you are having After you’ve identified your financial goals, you need to trouble, here are some common goals of Millennials I prioritize them. Let’s say that you have $1,000 to save work with: each month, and your goals are to build a cash reserve, pay off your student loans and buy a home. How would 1. Paying for your education / paying off you allocate the $1,000/month savings? your education 2. Starting an entrepreneurial business venture 3. Building a cash reserve / emergency fund 4. Buying an engagement ring / paying for a wedding 5. Purchasing a home 6. Starting a family 7. Reaching financial independence Now that you have listed your goals, start quantifying them by both value and time. For example, if you wish to buy a home, about how much will that home cost in the geographic area you’re considering, and when would you like to purchase it? Try to do this for each goal using your current lifestyle as a measuring stick. 22 Let’s assume that if you split the $1,000/month equally across all three of your goals, you would not achieve any of them in the time frames you’ve set. But if you temporarily sacrificed one of your goals by pushing it down the road a few more years, you would be able achieve the other two in a timely fashion. You get the picture here. Goal priority allows us to be honest with ourselves and determine where to put the first and last dollar of available savings.


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EDUCATE AND EMPOWER YOURSELF STARTING WITH CASH FLOW Once you’ve identified and prioritized your goals, you Note that cash flow and budgeting take time to master. need to educate and empower yourself with the basic Please don’t expect that just because you made a tenants of personal finance. This doesn’t mean you need beautiful line-by-line budget, you’re going to get it right to be as savvy as Warren Buffet or as passionate as your the first month you put it into play. It is going to take trusted bouffant-ed advisor, but you do need to have a discipline and practice to execute a sound budget over fundamental knowledge of personal finance so that you time. Remember, life is fickle and things come up. Let’s can use it to your advantage. be real too, we sometimes splurge when we shouldn’t. So, as a rule of thumb, as long as your budget averages First, embrace the cash flow. This is a way of tracking what close to your target over a trailing three-to-six-month you are earning and what you are spending. Creating a period, you should feel pretty good. budget illuminates what kind of lifestyle you are living and where potential savings can be found. For example, if a financial goal requires you to save $500/ month, and your personal finances are built, you should also have you end the month with only $250, you clearly have a basic understanding of debt, interest, risk, time value another $250 to try to pull together. Listing your monthly of money, investments, taxes and essential estate plan- expenses will assist you in pinpointing where sacrifices ning documents. Phew. You can learn more about these can be made next month in order to reach that $500 concepts by visiting the press page on my website, monthly savings goal. 24 While mastering cash flow is the foundation on which www.douglasboneparth.com. Additionally, Investope-


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dia.com is a great resource if you want to take a more being self-honest. Don’t be one of those people. Fight for definitional approach to these planning concepts, espe- your success and happiness. To quote Melissa McCarthy cially in the area of investments. in the movie Bridesmaids, “I don’t associate with people that blame the world for their problems. Because you’re Now that you’re educated, you need to be empowered. your problem, and you’re also your solution.” You might not think personal finance is the cat’s pajamas like I do, but if you are serious about achieving your own goals and securing the future of your dreams, then you better get pumped. Do you think your goals are just going to happen on their own? They won’t! You have to work really hard and smart to achieve them. I can’t promise you financial success. I can, however, guarantee that if you are disorganized, uneducated and disempowered with regard to your finances, you will severely delay your ability to accomplish great things in life. I can’t tell you how many people receive my advice but fail to run with it because they are too lazy to care, too busy complaining about their problems, or too paralyzed by the fear of 25


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CONSULT A TRUSTED FINANCIAL PROFESSIONAL One thing I love about our generation is that we are very over time called the financial planning process. They self-sufficient and capable of doing things ourselves. We are capable of focusing on all areas of personal finance, command technology and information better than any including cash management, insurance, investments, other. As I am writing this, financial technology is taking retirement, tax planning and estate planning. They are off. Tools for budgeting, investing and planning are being also fiduciaries, obligated to put your interests above all created to make your life easier to manage. This is a else. As biased as I am towards the type of professional good thing! But, if you’re already feeling overwhelmed, you should consider working with (ahem ahem), there or you’re simply the type of Millennial that prefers to are plenty of qualified professionals with a breadth of collaborate with a live human being to solve complex experience and knowledge who are capable of helping problems, then seeking out a reputable financial you. Credentials aside, whomever you choose to work professional is the right move for you. with, you have to make sure he or she is the right fit, because client-advisor relationships are built on trust, As a CERTIFIED FINANCIAL PLANNER™ and the CFP Board Ambassador for New York, I strongly advise consumers to work with certified professionals who have acquired one of the highest credentials in the field of personal finance. CFP® Professionals are capable of helping you plan for your financial goals by using a repeatable, systematic process that can be measured 26 and they can last for lifetimes.


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CREATE A FINANCIAL PLAN When it comes to financial planning and Millennials, I Planning-ready Millennials are those of us whose lives divide us into two groups: those who are not “planning are getting increasingly complex, due to things like ready” and those who are ready. multiplying responsibilities or decreased free time. They might have accumulated some assets and want There are many reasons that you might not be ready professional management over them. Life events such to pay for financial planning services. For example, as marriage, birth of a child, death of parent or a career life could be relatively simple at the moment and your transition typically lead people to this point. If you are responsibilities are few. Your focus could be limited to here, you may want to consider obtaining your first your education, health, job and/or paying your bills. If comprehensive financial plan. But what is a financial plan, this is you, perhaps your involvement with a financial anyway? professional and financial planning is as simple as one conversation. I’ve sat down with countless Millennials The financial plan hinges on the idea that those who who just needed the reassurance of hearing the very stuff write their goals down are more likely to achieve them. that you’re reading right now. I provide them with some Imagine for a second you are holding some darts, but the essential tools and articles that they can use to increase wall in front of you doesn’t have a dartboard hanging on it. their knowledge and organization. In doing so, they Well, if you throw those darts at the wall, you’re definitely become more confident and productive. Hopefully, they going to hit something, somewhere, but by no means a will also be willing to work with me when they are ready target. Think of a financial plan as your dartboard. It tells to engage in more comprehensive financial planning. you where should focus your time, energy and money so 27


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you can hit your targets: your financial goals. a subscription, which can be a more flexible option for many; however, I’d urge you to make sure that you are A financial plan is a written document containing a receiving a comprehensive planning document and not detailed analysis of your personal finances and your just ad hoc advice on a piecemeal basis. financial goals. It provides both observations and recommendations on how to increase the probability of achieving those goals. Whether it’s identifying saving opportunities, student loan repayment strategies, filling gaps in insurance coverage or starting the conversation on financial independence, a financial plan is your roadmap to navigating your financial life. Many financial advisors like me charge an annual fee for this service. The fee is typically based on the complexity of the client’s financial circumstances. However, the vast majority of Millennial’s financial plans aren’t complex for a seasoned professional. I can’t speak for everyone in the industry, but my annual financial plans typically start at $1,000, which entitles you to a written financial plan, quarterly service meetings and the opportunity to always communicate with me regarding your financial situation as it evolves. There are also many Millennial advisors out there who charge a monthly fee for their advice, like 29


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GET OUT THERE AND CRUSH IT Our problems are real. The financial realities we face as a generation are as challenging as they are unique. Yet, everything you’ve just read should help you lay the foundation for your personal financial life and get you moving in the right direction. If you’ve trapped yourself with feelings of hopelessness because of any number of wrong turns, now’s the time for you to realize that feeling bad for yourself will accomplish nothing. Picking yourself up and applying these proactive tools could change your life. Like I said, it’s going to take hard work to achieve your financial goals, but to quote President Theodore Roosevelt, “Nothing in the world is worth having or worth doing unless it means effort, pain and difficulty.” Now get out there and crush it! 30


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ABOUT THE AUTHOR @dougboneparth /dabcfp /douglasboneparth Douglas Boneparth grew up in the business, working in his father’s financial planning practice from an early age. This experience inspired him to become one of the youngest CERTIFIED FINANCIAL PLANNER™ professionals in the county at the age of 25. Douglas currently serves as the CFP Board Ambassador for New York, educating the public and the media about how CFP® professionals and financial planning can help people achieve their financial goals. While Douglas provides concierge wealth management and financial planning services to wealthy families and growing businesses, close to his heart are young professionals. With firsthand knowledge of the challenges they face, he equips his hardworking Millennial clients with the tools they need to approach today’s economic realities and succeed. Working with his peers has never been about account balances or selling financial products. It’s about investing in them today to build solid financial foundations for a lifetime. He has been a featured speaker at the NYU School of Law, NYU Stern School of Business, Fordham Law School and the New York City Bar Association. He is also active in w!se, a New York City organization that teaches financial life skills to high school students. Douglas has appeared on CNBC’s On The Money and Nightly Business Report, Good Morning America and Fox & Friends, as well as in The Wall Street Journal and U.S. News and World Report, among others. You can view his appearances and featured articles on his web site at www.douglasboneparth.com. Douglas received a Bachelor of Science degree from the University of Florida and an MBA from the NYU Stern School of Business, with concentrations in finance and management. Outside of the office, Douglas enjoys playing tennis and volleyball, keeping up with the latest in men’s fashion and watching Florida football with Heather, his wife and college sweetheart. Go Gators! Passionate about his message, Douglas also provides financial education and literacy seminars across New York City. 31


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Securities offered through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Advisory services offered through Life and Wealth Planning, LLC are separate and unrelated to Commonwealth. Fixed insurance products are offered through Life and Wealth Planning, LLC. One Penn Plaza, Suite 2109, New York, NY 10119 (212) 279-9121. 32


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