If you’re one of the millions set to graduate from college or a grad school program in May, you don’t need me to tell you that there’s a long road ahead in these uncertain times.
As we settle into this new normal, it may be tempting to sit back and hold on to every penny you earn in the coming months – but doing so could cost you in the long run.
As someone who graduated from college during the crash of ’08 and Great Recession that followed, believe me – I know what you’re up against. This is why I’m here to tell you that there is one thing that you can start doing today to set yourself up for long-term financial success: pay yourself first.
Here’s how.
- Tempting though it might be to spend your graduation gift money on something fun in the short term, use those gifts to fund an investment account with My Accumulation Plan (MAP). You can start with as little as $5,000. By doing so now, in a down market, you’re giving yourself the powerful gift of time for your money to grow when the market rebounds. Your future self won’t be able to thank the 2020 version of you enough when you see the compounded growth of these funds over decades.
- When you start that first job, sit down with your very first paycheck and calculate how much of your take home pay you actually need to cover basic living expenses (based on your net pay after health insurance, company-matched 401k and taxes have been accounted for). Armed with those details, you’ll be able to identify how much you can afford to set up on a monthly auto-contribution to grow your MAP account more quickly. By getting in this habit of paying yourself first and auto-contributing to your growing investment portfolio, you won’t “feel” like you’re missing out on spending that money when it comes in.
While only you can make the decision to take control of your financial future, as a MAP account holder you’re never alone in that journey. You’ll receive the benefit of an advisor who creates a Wealth MAP for you and keeps you on track every year to make sure your journey is on the right path. Having this kind of wealth accumulation guide in place in the early years of your career can be invaluable to your long-term financial stability.
Still skeptical about embarking on an investment journey in this harsh economic climate? Investing in a down market may seem like a bad idea, but history has shown us that time is an incredible asset to have on your side when it comes to letting your money work for you through smart investments. And, fortunately, time is something you have plenty of as a new grad.
You may not get to walk across the stage wearing a cap and gown in front of hundreds this spring, but you are in a unique position to set yourself up to benefit – possibly more so than those who started investing in the bull market of recent years – from an economy that has the potential to recover and grow to new heights.
Building financial security is a journey. MAP makes it easy for you to start. Click here to take the first step.
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Want to do more to shore up your financial footing as you start your career? Download our New Grads: Start Here Guide.